EXCERPT: “A new Minneapolis City Council committee will focus on boosting the city’s affordable housing stock. The formation of a new Housing Policy and Development committee was announced last week with the approval of other standing committees and new council leadership. The HPD committee will have primary oversight on current and future affordable housing policies. ‘I think there is a real need for public housing to especially serve the lowest income folks and the people without any income in the city,’ said Ward 2 City Council member Cam Gordon, who chairs the new committee.” FULLSTORY: http://bit.ly/2DIKMJk
EXCERPT: “There is not enough affordable housing in Minnesota. Adults in our study most often reported losing their housing because they could not afford their rent or mortgage (36 percent), and 22 percent reported that there was no housing available that they could afford.At the time of the study, fair market rent (determined annually by the federal government) averaged $796 per month for a one-bedroom apartment in the Twin Cities and $558 per month in Greater Minnesota. Both of these numbers exceed the $550 median monthly income among homeless adults.” FULLSTORY: http://bit.ly/2ClKc2u
EXCERPT: “The Simmons family’s last home had holes in the floor and their pipes often would freeze and sometimes burst because it got so cold inside in the winter. Kelsey and Donald Simmons covered the holes with two-by-fours and made other improvisations they could afford on a tight budget. But they realized it wouldn’t be long before their mobile home built in 1972 would be no longer be inhabitable. In November they moved into a newer, warm trailer with solid floors thanks to a partnership between the city of Mankato, Minnesota Valley Action Council and three mobile home parks, with support from a state grant.” FULLSTORY: http://bit.ly/2Blszj3
Minneapolis – The Minnesota Multi-Housing Association is introducing a framework to preserve and develop affordable rental housing throughout Minnesota.
Today, the organization released strategies that will be key to reaching those optimistic, yet achievable goals. These strategies are meant as a framework for a discussion to improve affordable housing in Minnesota.
The framework has three key goals:
- Protecting Residents
- Preserving Naturally Occurring Affordable Housing (NOAH)
- Producing More Multifamily Housing
Protecting Residents
Eviction is a worst-case scenario for everyone involved. For landlords, it’s a costly and time-consuming process, as is finding and screening new tenants to replace those lost. It’s costly for government agencies and private organizations who step in to help the displaced residents. And, above all, it’s costly to those who find themselves in need of shelter. Reasonable efforts to keep residents in their homes benefit all of the parties.
Short-term strategies
- Streamline approval of county Emergency Assistance funds
- Continue best practices adoption by housing assistance programs
- Housing counselor/resident education training
- Voluntary pre-eviction mediation
- Expand resident rental assistance at the local level
Mid-term strategies
- Develop pilot project for household financial emergency stabilization funds
- Resident relocation, including time and/or assistance, under certain limited circumstances
Long-term strategies
- More economic development and stimulus leading to better paying jobs, including affordable education opportunities and workforce readiness training, with a focus on the housing sector
- New pathways and incentives for affordable home ownership
Preserving Naturally-Occurring Affordable Housing (NOAH)*
One of the most cost effective means of providing affordable multifamily housing is through the preservation of existing naturally-occurring affordable housing stock. This also helps to stabilize residents of communities who are at the greatest risk of dislocation.
Short-term strategies
- Expand use of 4d tax classification with reasonable regulations
- Low cost debt and/or equity sources for loans and grants for rehab, only for preserving affordable housing
- Streamline approval of non-conforming units
- Expand 40% rebate programs for energy upgrades
- Funding for NOAH acquisitions by mission-driven partners (Greater MN Housing Fund – NOAH Impact Fund)
Mid-term strategy
- Reduced utility rates
Long-term strategy
- Equal property tax treatment for homeowners and rental housing residents
Producing More Multifamily Housing
Changing demographics and the strong economy have created an unprecedented demand for rental housing. Meeting this increased demand for housing has put a tremendous strain on the market. While there are numerous high-end units being built, due to a number of factors including the high construction costs and regulatory burdens, there has been insufficient production of new, affordable units. This imbalance between supply and demand has been felt most by lower income populations seeking a place to live. An increase in the supply of housing units is one component of solving this problem, and is a critical element in meeting housing needs.
Short & mid-term strategies
- Promote lower-cost design and construction of apartments by shortening the funding and approval process and reducing costs and fees
- Expand use of 4d tax classification for new unsubsidized affordable housing
Long-term strategies
- Sales tax exemption for new affordable and rehab construction materials
- Dedicated state funding source for affordable housing
- Homegrown Fund initiative for metro-wide affordable housing funding via sales tax (Minnesota Housing Partnership Proposal)
*The contractual agreements for NOAH and “tax credit-free” or “government grant-free” new construction of affordable housing would have time frames commensurate with the level of government support and would be annually self-certified, but subject to audit and claw backs for violations. Limited compliance activity is essential to incentivize market-rate housing providers’ participation.
As an observation, subsidized affordable housing would also benefit from all the aforementioned strategies to lower the cost of construction.