Rochester Approves $27 Million Bonds for 149-Unit Affordable Housing Complex

Key facts

• Rochester City Council approved $27.2 million in revenue bonds for the Commons at Bear Creek.
• The project will create 149 multi-family units on Fourth Street SE, near downtown.
• All units are for households earning 60% or less of area median income (AMI).
• At least three units will be affordable at 30% AMI, and 27 at 50% AMI.
• Developer Lincoln Avenue Communities seeks $1.4 million in tax-increment financing (TIF).
• Total project financing is estimated at $61 million.
• Planned unit mix: 41 one-bedroom, 77 two-bedroom, 31 three-bedroom apartments.
• Construction expected to break ground in early summer.

City Council Clears Financing Path for Affordable Housing Project

The Rochester City Council on Monday passed a resolution authorizing the issuance of nearly $27.2 million in revenue bonds to support the construction of the Commons at Bear Creek, a six-story, 149-unit affordable housing complex at 602 Fourth St. SE. The vote also set the stage for the creation of a tax-increment financing (TIF) district that would provide an additional $1.4 million in support. The bonds, allocated in January under state statute for qualified multi-family housing projects, allow the developer, Lincoln Avenue Communities, to borrow the funds. The city acts as the issuer but assumes no financial liability; the developer is responsible for all fees and debt payments. No city funds or assets are pledged.

Developer Details Income Restrictions and Rent Levels

All 149 units will be income-restricted, with rents set to be affordable for households earning up to 60% of the area median income (AMI). Sarah Robbins, an associate with Lincoln Avenue Communities, explained to neighbors during a 2025 presentation that for a single parent with children, this translates to an annual household income of $60,000 to $70,000 to qualify. “It really is true workforce housing,” she said. The development assistance agreement, to be reviewed by the council acting as the Rochester Economic Development Authority, requires deeper affordability for a subset of units. At least three apartments will be affordable at or below 30% AMI, cutting income requirements and rents roughly in half. Another 27 units will be priced for tenants earning up to 50% AMI. The agreement allows the developer to set rents for nearly a quarter of the units at levels affordable to households earning up to 70% AMI, a flexibility intended to maintain an average rental cost at 60% AMI while covering the building’s financial needs.

Project Design and Amenities Include Underground Parking

The planned complex will include 41 one-bedroom, 77 two-bedroom, and 31 three-bedroom apartments, along with one level of underground parking. Amenities are expected to feature a fitness room, club room, and secure bike storage. The building will sit just east of the bridge over Bear Creek, covering several existing lots between the creek and Fourth Street, offering residents walking-distance access to downtown Rochester.

Tax-Increment Financing to Bridge Funding Gap

The TIF district would allow the city to capture the increased property tax revenue generated by the development and return a portion to the developer annually for up to 19 years. This assistance is designed to help cover financing costs, thereby reducing the rent needed to service the project’s debt. The bonds and TIF support are part of the estimated $61 million total financing required for the project. The developer plans to break ground in early summer.

Context: Rochester’s Affordable Housing Needs

The Commons at Bear Creek is one of several initiatives addressing Rochester’s growing demand for affordable housing, particularly for workforce families. By targeting households earning up to 60% AMI, the project aims to serve teachers, healthcare workers, and other essential employees who are often priced out of the local market. The inclusion of units at 30% and 50% AMI ensures some apartments reach the most cost-burdened renters. The city’s use of revenue bonds and TIF reflects a common municipal strategy to leverage private development for public benefit without direct expenditure. The developer’s track record with similar projects in other states may influence the project’s timeline and execution.

Next Steps and Oversight

Following the council’s approval, Lincoln Avenue Communities will proceed with finalizing financing and securing permits. The TIF agreement will be formally considered at a future meeting of the Rochester Economic Development Authority. Construction is expected to begin in early summer, with completion anticipated within 18 to 24 months. The city will monitor compliance with income restrictions and affordability covenants through the life of the TIF district.

The bottom line

• Rochester City Council approved $27.2 million in revenue bonds for a 149-unit affordable housing project, with no city financial risk.
• All units are income-restricted to 60% AMI, with deeper affordability at 30% and 50% AMI for 30 units.
• Developer Lincoln Avenue Communities will receive up to $1.4 million in TIF support over 19 years.
• The project includes a mix of one-, two-, and three-bedroom apartments with underground parking and amenities.
• Construction is slated to start in early summer, addressing workforce housing needs near downtown Rochester.
• The financing structure leverages state bonds and local tax incentives to keep rents affordable without direct city spending.