Low-Income Rental Classification (LIRC)
Cluster 1 Cluster 2 Cluster 3 Cluster 4 Cluster 5 Cluster 6
Qualifying Properties are at least 20% of total units in the rental property must be affordable (Section 8, LIHTC, USDA, Rent restrictions placed by state, local, or federal government at or below 60% AMI). For qualifying properties, the eligible units use the 4d(1) tax class rate of .25%. The lower tax class rate applies only to that portion of the rental property meeting all eligibility criteria. The regular rental class rate of 1.25% will apply to the remainder of the property.
Cities have created programs to make unsubsidized rental properties eligible for LIRC, see examples below for more information:
https://www.stpaul.gov/departments/planning-and-economic-development/housing/housing-trust-fund/4d#:~:text=The%204d%20Affordable%20Housing%20Incentive,one%2Dtime%20administrative%20grant%20assistance.
https://www2.minneapolismn.gov/government/programs-initiatives/housing-development-assistance/rental-property/4d/https://www.edinamn.gov/1797/For-Property-Owners#:~:text=5%2Dyear%20eligibility%20for%204d,taxes%20may%20be%20less%20significant.
https://www.stlouisparkmn.gov/government/departments-divisions/housing/property-owners/4d-affordable-housing-incentive-programhttps://www.goldenvalleymn.gov/192/4d-Affordable-Housing-Incentive-Program
Sources
Last updated: Nov. 8, 2024
Program details
City: Edina, Golden Valley, Minneapolis, Saint Paul, St. Louis Park
Program geography: State-wide
Entities involved: State Housing Finance Agency (HFA)
Market Category: Lower-Cost and Higher-Cost Market
Tool Category: Capital and Incentives for Responsible NOAH Owners
Tool Description: Tax Relief
Year started: 2005
Building type: Varies
Target tenants: at or below 60% AMI
Affordability restrictions: Yes. Varies, state program minimum: Reapplication to Minnesota Housing ($10 per 4d unit, max $150 per property) 3% limit on annual rent increases. 4d tax savings must be utilized for one or more of the following eligible use categories: property maintenance, property security, improvements to the property, rent stabilization, or increases to the property’s replacement reserve account. Single Family (1-Unit): All must be preserved at 50% AMI Duplex (2-units): 1 unit must be preserved at 50% AMI 3 or More units: at least 20% preserved at 50% AMI or at least 50% of units preserved at 60% AMI
Funding description: By June 1 of each levy year, the Housing Finance Agency must certify to the appropriate county or city assessors, the specific properties that are qualified under this section and the number of units in the building that qualify.
Funding sources: State Statute