The city of Minneapolis is making $5 million in emergency assistance to low-income renters and small businesses in response to the coronavirus pandemic.
The funds will be primarily dedicated to renters earning well below the area median income (AMI) and business in areas of concentrated poverty.
“We wanted to make sure the money first was going to those who are struggling most,” Mayor Jacob Frey said.
The city will be providing about $2 million in emergency assistance to low-income households that have been economically impacted by the coronavirus pandemic. Households earning less than 30% AMI, about $27,000 annually for a family of three, will be eligible for $1,500 rental and utility bill relief. The payments will be made directly to landlords and companies, Frey said.
The benefits will be available to all residents, regardless of immigration status, a break from federal and state relief packages.
The mayor’s executive action, which does not require City Council approval, will also add an additional $1 million to the Stable Homes, Stable Schools program, which provides financial aid to families earning less than 50% of AMI, about $45,000 for a family of three. The program will be expanded to include families enrolled in all city schools.
To help people with mortgages, the city will put an additional $275,000 into the Minnesota Homeownership Center to provide free counseling services to residents. The Homeownership Center has advisors who help people negotiate with lenders for forbearance and mortgage repayment or forgiveness.
Minneapolis is also prepared to partner with nonprofits to spend up to $3 million of existing funds to buy up naturally occurring affordable housing if real estate speculation ramps up.
“We are concerned speculative purchasing will hurt NOAH stock in the city,” Frey said.
For small businesses, Frey’s action would extend $2.2 million in forgivable gap loans for companies with fewer than 20 employees that have annual revenues under $1 million and are located in impoverished areas or cultural districts. The forgivable loans will be available in $5,000 or $10,000 increments to be directed toward payroll, rent or accounts payable. The loans will be forgiven if the business is still operating in the city in a year.
Eligible businesses must be located in a cultural district, green zone or area-of-concentrated poverty (ACP50). In Southwest Minneapolis, such areas include the Whittier and Lyndale neighborhoods, parts of Lowry Hill East and portions of cultural corridors along 38th Street and Lake Street.
Business funding will largely come from the city’s Great Streets local business program. Housing funding mostly comes from block grants.
For businesses citywide, Frey’s action will lower the current 2% loan program to a 0% loan program. The city will match loans with private lenders for $50,000 or $75,000.
All told, these programs will likely help about 2,000 households and 200 businesses, the mayor said.
“These measures are not enough on their own,” Frey said. But he believes it’s a first step to help people “hold on” while state and federal relief comes down.