The roofs are due, the reserve study says so, and the reserve fund is short by more than a special assessment can cover. Minnesota gives an association one more way to pay for it: a Housing Improvement Area. The city finances the work on the common elements, and the owners repay it over time through a fee on each unit, collected with the property taxes. This page explains what an HIA is, what the statute asks of the owners and of the city, how long cities can still create one, and where TruPoint fits.
What a Housing Improvement Area is
A Housing Improvement Area is a defined area a city sets up under Minnesota Statutes 428A.11 to 428A.21. Inside it, the city pays for improvements to the common elements, or the housing or economic development authority the city names in its ordinance does. The cost comes back through fees on the housing units in the area. The statute leaves the definition of "housing improvements" to the city's own ordinance. It names improvements to the common elements of a condominium or other common interest community as the kind it has in mind: roofs, siding, decks, roadways, walkways, the parts every owner shares.
The city can issue bonds to pay for the work once the construction contract is signed, repaid first from the fees (428A.16). The fee can be set on each unit's tax capacity, its square footage, or another basis the council finds more equitable (428A.14). It can be collected at the same time and in the same manner as the property taxes (428A.15, 428A.05).
What the law asks of the owners
An HIA starts with the owners. Owners of 50 percent or more of the housing units that would pay the fee petition the city for it (428A.12). After the city adopts the ordinance, owners of 45 percent or more of the units can file objections with the city clerk before the effective date and stop it. The same veto applies to the fee resolution (428A.18). Owners decide an HIA, so the board's job before the petition is to put the scope, the cost, the fee, and the term in front of them plainly.
What the city has to find
Before it adopts the ordinance, the city holds a public hearing, with notice published at least seven days before the hearing and mailed to each owner at least ten days before (428A.13). The ordinance has to find two things: that without the HIA the improvements could not be made by the association or the owners, and that the designation is needed to maintain and preserve the housing units. That first finding is why a city treats an HIA as the last way to pay, after the reserves and the association's own borrowing have been looked at. The city will want to see that record.
The financial plan and the fee
Before the fee resolution, the association gives the city a financial plan prepared by an independent third party acceptable to both (428A.14). The plan covers how the association will pay for maintenance and operation of the common elements going forward, with a long-range plan to carry out and pay for capital improvements. A current reserve study carries the capital side of that plan; the operating side comes from the association's budget. The fee is then set by city resolution after its own noticed hearing. The notice to each owner states the estimated cost of the improvements, the fee for that unit, the right to prepay, and how long the fee runs.
How long cities can still create one
Under 428A.21, establishing a new Housing Improvement Area after June 30, 2028 takes a special law from the legislature. Cities can set up new HIAs under the general law until then. A board weighing a large project in the next two years should find out early whether its city will do one, because the petition, the hearings, the ordinance, and the fee resolution each take their own time.
Where TruPoint fits
This is consulting, by the hour.
- Feasibility. Whether your association fits the statute's findings and your city's program, and whether an HIA is the right way to pay for this project, before anyone spends real money.
- The case to the city. Documenting the financing gap, assembling the application your city asks for, and lining the project scope up with what the council has to find.
- The petition. Owner communication and meeting support, so owners sign with the scope, the cost, the fee, and the term in front of them.
- The city process. Hearings, questions from staff and council, and follow-through to the ordinance and the fee resolution.
- The project. The written scope, three sealed bids opened together, and oversight through closeout.
For management companies: an HIA is project work TruPoint carries alongside you. Your team stays in front with the board.
Take the next step
The free Initial Property Review reads the reserve study and the project the board is weighing, and comes back with whether an HIA belongs on the list of ways to pay for it. If it does, consulting carries it from there.
Sources and further reading
- Minnesota Statutes, chapter 428A, Special Service Districts; Housing Improvement Areas: revisor.mn.gov/statutes/cite/428A (Opens in a new tab)
- 428A.11, definitions, including "housing improvement area," "housing improvements," and "implementing entity": 428A.11 (Opens in a new tab)
- 428A.12, the owner petition (50 percent or more of the housing units): 428A.12 (Opens in a new tab)
- 428A.13, the hearing, the ordinance, and the findings the city must make: 428A.13 (Opens in a new tab)
- 428A.14, the fee, the financial plan, and the notice to owners: 428A.14 (Opens in a new tab)
- 428A.15 and 428A.05, collection of the fee with the property taxes: 428A.15 (Opens in a new tab), 428A.05 (Opens in a new tab)
- 428A.16, bonds: 428A.16 (Opens in a new tab)
- 428A.18, the owners' veto (45 percent or more): 428A.18 (Opens in a new tab)
- 428A.21, the June 30, 2028 deadline for new areas under the general law: 428A.21 (Opens in a new tab)
