Jun. 7—CLOQUET — The city is establishing a housing trust that will allow the city to use state funding to provide affordable housing in the face of a

county-wide housing shortage.

The Cloquet City Council voted unanimously Tuesday, June 4, to pass an ordinance establishing the Cloquet Housing Trust Fund. It will allow the city to pool Statewide Affordable Housing Aid into a trust fund and contribute any additional funds to the trust.

The Minnesota Legislature established Statewide Affordable Housing Aid in 2023 to assist local governments in providing affordable access to housing. The purpose of the aid is to assist cities in helping families from losing housing and to help those experiencing homelessness find housing.

The city received $64,810 in aid last year and is set to receive the same amount again this year. Funds from the program must be spent on qualifying projects after four years of receiving aid, however, funds will be considered spent if they are sent to a local housing trust fund. This would allow the city to maintain its aid money after the spending deadline.

The city may use the money to fund emergency rental assistance; financial support to nonprofit affordable housing providers; financing; and construction, acquisition, rehabilitation, demolition and removal of structures to provide affordable housing.

“It could be in the construction of a particular rental property, it can be the construction of the house,” Holly Hansen, community development director for the Cloquet Economic Development Authority, said.

The state is appropriating $4.5 million to cities with populations higher than 10,000 located outside the Twin Cities metro. The amount each city receives is determined by its cost-burdened households, which the program defines as when rent or homeownership exceeds 30% or more of household income.

Statewide Affordable Housing Aid will also be distributed to counties and tribal nations. In 2024, Carlton County will receive $111,092 from the program and the Fond du Lac Band of Lake Superior Chippewa will receive $385,714.

The ordinance comes at the request of the Cloquet Economic Development Authority, which has prioritized finding solutions to affordable housing. The EDA is conducting a housing study that aims to provide a better understanding of the city’s housing situation.

The city has already made moves to address the shortage of available housing, such as its plans to

renovate the Solem Hotel.