$4.4 Million Rochester Subsidy Targets Construction of New Homes

Rochester, MN (KROC-AM News) - The Rochester City Council is being asked to make another multi-million-dollar contribution to support the development of new homes in the city.

The City Council agenda for its regular meeting on Monday includes a proposal to approve awarding nearly $4.4 million through the city's Home Ownership Creation Program to subsidize the creation of 219 homes in the planned Westbury Development in northwest Rochester. The development by Bigelow Homes is planned for a parcel of land between 50th Avenue and 60th Avenue north of Valleyhigh Road Northwest.

The developer has proposed that 100 of the 219 homes planned at the site will be priced between $350,000 and $380,000, and the remainder of the homes will be priced below $500,000. According to city officials, that means 46% of the homes planned for the development will meet the Home Ownership Creation Program goal of building new homes affordable to households earning 115% of the area median income.

According to the City Council agenda item, the nearly $4.4 million contribution would provide a maximum reimbursement of $20,000 for each of the new homes built in the development. If the proposal is approved by the City Council, the developer would be required to complete the project by November 2029, with an option to extend the deadline for one year. It would also require a deed restriction on the subsidized homes that would restrict the resale price for seven years.

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READ MORE: Rochester Approves Millions in Funding for New Housing 

The Home Ownership Creation Program was created by the Rochester City Council last July using funds from the extension of the city sales tax that was approved by voters in 2023. The City Council previously approved a $4 million contribution to subsidize the development of just over 200 homes in the Prairie Ridge Development in the same area.