Rochester Approves Millions in Funding for New Housing

Rochester, MN (KROC-AM News)- The Rochester City Council approved a multi-million dollar subsidy for a new housing development on Monday.

Read More: $4 Million Housing Project Subsidy Before Rochester City Council

The subsidy will go towards lowering the prices of just over 200 new houses that are set to be built in northwest Rochester.

The Prairie Ridge Development, which is being built by North Rock Real Estate, meets the criteria for the public subsidy by including a portion of the planned housing units with prices considered affordable to households earning 115% of the area median income, the agenda item says.

The new development is located along Valley High Dr. and 50th Ave. Northwest.

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City officials say the subsidy will lead to 40 of the new homes being priced between $368,000 and $422,000. The remaining homes in the development would be priced at between $426,000 and $479,000.

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Councilmembers unanimously approved a $4 million subsidy to lower the cost of the new homes. The funding for the subsidy will come from money raised by the city’s half-cent sales tax, which voters approved extending last year.

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Under the terms of the public subsidy arrangement, the 40 housing units deemed to be "Economic Vitality Affordable Units" would have restricted covenants that would ensure the house, if it were to be resold within 10 years, would be offered at a price relative to the original sale price.

City leaders say the goal of the subsidy is to open up more affordable homes by lowering the threshold for current homeowners looking to upgrade their homes.

The agreement with the developer also requires the project to be completed by November 2027, with the option to extend an additional year.