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In Alexandria, federal and local policy decisions make homeownership possible • Minnesota Reformer [1]

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Date: 2025-08-07

ALEXANDRIA — Brittany Johnson is preparing to move her three children from their two-bedroom apartment to a brand-new four bedroom home with big windows, bordered by shade trees.

Johnson is a single mother who works two jobs to support her children, including a 5-year-old daughter with complex medical needs who underwent a heart transplant as an infant.

She’s becoming a homeowner thanks to Habitat for Humanity of Douglas County and a complex web of local and federal programs that are facilitating the construction of 42 new affordable homes in Alexandria.

Minnesota is facing a housing shortage, and the resulting higher housing costs are harming low-income residents the most. One in four Douglas County residents spend more than 30% of their income on housing, meaning they are “cost-burdened” by their rent or mortgage, said Lori Anderson, executive director of Habitat for Humanity of Douglas County.

Johnson’s new home is in a new neighborhood called Summer Meadows, the first affordable housing development in Alexandria since 2002. She opened her door on Thursday to U.S. Sen. Tina Smith, who toured the neighborhood to see the impact of federal funding on affordable housing.

Developers seeking to build new affordable housing projects often face obstacles to construction. Like market-rate developers, local zoning laws that heavily restrict multifamily developments or require certain lot or square footage can drive up the price of the home, pricing out the prospective buyers.

Summer Meadows was initially zoned for 25 homes but Alexandria made an exception to allow 42 homes to be built, which helped the project pencil out. Smith has worked to encourage cities to allow more multifamily developments and smaller, affordable homes.

And financing affordable projects is also a challenge, requiring a mix of private and government-backed loans, tax credits and other sources — a complex, interconnected web that can fall apart if a project is delayed or if one funding source falls through.

Key funding for Summer Meadows comes from the U.S. Department of Agriculture loans and a local tax increment financing district.

USDA’s Rural Development division awarded Habitat a $1.6 million site loan to finance the development of the lots. The USDA is also providing qualified homebuyers with subsidized loans.

“It allows us to keep our monthly mortgage at an affordable rate so we can avidly enjoy our lives in a safe, stable and affordable home,” Johnson said.

The Alexandria City Council designated the neighborhood as a tax increment financing district, which will direct the residents’ property taxes back to Habitat for Humanity. Habitat for Humanity paid for the neighborhood’s streets, sewer, water, sidewalks and infrastructure; the organization will recoup its costs via homeowners’ property taxes.

Smith is a lead author of the bipartisan Rural Housing Service Reform Act, which was included in a housing package that unanimously passed the Senate Committee on Banking, Housing, and Urban Affairs on July 29. Smith’s bill would make several technical changes to the USDA programs that support housing development to streamline and speed up the process.

“Even though it’s hard to spot the bipartisanship in Washington right now, I do really believe that there is a bipartisan interest and concern and desire to take action around how to address this housing supply and housing affordability crisis,” Smith said.

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[1] Url: https://minnesotareformer.com/2025/08/07/federal-and-local-policy-decisions-make-homeownership-possible/

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