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KARE 11 Investigates: Low-income seniors rally against rent hikes

A large MN affordable housing developer is jacking up rents. KARE 11 Investigates finds its rent hikes are twice as high as similar units.

COON RAPIDS, Minn. — Outside the River North Apartments in Coon Rapids, senior citizens held signs that didn’t mince words, calling out the building’s developer for rent hikes that are forcing some to move.

“They’ll milk us for every cent they can get,” said organizer Jan Bragelman, a resident at the building.

The developer, Dominium, is based in Minnesota but boasts that it is one of the nation’s leading developers of affordable housing. The company uses federal tax credits to build.

This year, they are raising rents 12.5 percent at their Twin Cities-area properties – many of which are home to lower-income senior residents.

“They know we cannot absorb this rent increase,” Bragelman said.

Residents call for change in federal housing rules

She and the others picketing on a hot summer day vowed to keep putting pressure on Dominium and their elected leaders.

Credit: KARE 11
Jan Bragelman is one of the senior citizens protesting rent hikes by Dominium.

The residents are calling for changes to the federal Low Income Housing Tax Credit (LIHTC) program to protect renters on fixed incomes.

Under the LIHTC rules, Dominium sets rents based on a formula determined by the Area Median Income – or AMI.

Renters in the tax credit properties can typically only make 60 percent of an AMI, with developers forced to cap rents at 30 percent of that AMI limit.

The AMI is calculated every year, and each time it goes up, so can the rent. Though nothing in the program rules requires landlords to increase it.

This year in the metro, the AMI went up 12.5 percent, more than double the social security increase of 5.9 percent.

Credit: KARE 11
Picket signs denounced Dominium for raising rent too much for seniors on fixed incomes.

For some residents, that increase adds up to nearly $200 more per month.  

“We were forced to move,” said River North residents Mike and Gail Miller.

Dominium has said it is following the law with the rent hikes.

Dominium rent hikes more aggressive

But records reviewed by KARE 11 Investigates reveal that Dominium has been far more aggressive than other housing providers when it comes to rent increases.

KARE 11 obtained a Minnesota Housing Finance Agency analysis showing Dominium’s rent increases were on average twice as high as other senior housing over the past eight years.

Credit: KARE 11
A Minnesota Housing Finance Agency analysis shows higher rent increases by Dominium.

Coon Rapids City Councilor Kari Rehrauer attended the protest and said she was looking into ways local officials could help.

“To call it affordable feels like false advertising,” she said.

State governments administer the program and can add requirements before approving LIHTC credits,

However, the base rules for the tax credits are set by HUD and don’t make any distinction between low income housing for working people and those on fixed incomes as many senior citizens are.

Congressman Dean Phillips (D-MN) sent a letter to HUD asking the agency to investigate the issue and “look at changes that might better protect renters, especially those on fixed incomes.”

The seniors also met with Senator Amy Klobuchar (D-MN). 

Bragelman and a coalition of renters at Dominium apartments throughout the metro have vowed to keep fighting until the rules change and companies that seek tax cuts are held accountable.

“We’re putting politicians on notice – this is a voting year and us seniors are mad,” Bragelman said.

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