The Prior Lake City Council approved a $225,000 contribution in Local Affordable Housing Aid (LAHA) funds to Twin Cities Habitat for Humanity at their January 12 meeting, supporting the completion of an affordable townhome development near Ponds Park.

In 2023, the Minnesota Legislature created the state's first tax dedicated to affordable housing. The 0.25% Metro Area Sales and Use Tax for Housing provides LAHA funds to cities in the seven-county metro area with populations over 10,000. Prior Lake received $109,824.66 in 2024 and $266,897.98 in 2025, all of which must be used for affordable housing initiatives.

Habitat for Humanity is completing three four-unit townhome buildings on 170th Street SE. The first building was finished in 2024, the second was completed in 2025, and the third is expected to be built and available for sale in 2026. All units in the first two buildings have are sold and occupied.

The homes are sold to buyers earning 80% or less of the area median income, and the land beneath the townhomes is owned by the Scott County Community Development Agency land trust, making the project eligible for LAHA support.

Habitat has identified significant funding gaps as the project nears completion. A shortage of volunteers required the organization to hire additional contractors, creating an unanticipated construction and development shortfall of more than $1 million. Additional affordability challenges have also emerged, including higher-than-expected homeowner association fees—now about $400 per month—driven largely by increased insurance costs. These factors have resulted in an estimated $164,000 affordability gap.

"We really appreciate the support you have given us over these last few years," said Cecile Bedor, Chief Real Estate Officer Twin Cities Habitat for Humanity. "There's other ways one can spend these really finite LAHA dollars and this is really meaningful to us as it's a multi-year project and we've seen costs go up."

Following the contribution, Prior Lake’s LAHA fund balance will be $8,127.65. The city is expected to receive approximately $250,000 in additional LAHA funding from the state in 2026.