EXCERPT: “Multifamily rents in the U.S. rose slightly in April, although the rate of growth fell below the long-term average, according to data compiled in the most recent survey of 121 markets by Yardi ® Matrix. Average U.S. rents rose $3 during the month to $1,314, an increase of 2% but well below the 5.5% growth rate of a year ago and the lowest year-over- year percentage increase since April 2011. The figures are expected, the report says, “given the rapid increase in supply and the inevitable return to growth that is more in line with income gains.” According to the report, “Rents have (in most metros and most segments) far exceeded the rate of income growth in recent years, when the number of renters increased rapidly while supply nosedived in the wake of the last recession. Now rents are peaking and have become difficult to afford for the average resident in many metros, while supply is at cyclical peaks.” Three California real estate markets led year-over- year rent growth in April: Sacramento, the Inland Empire and Los Angeles. Others in the top five were Minnesota’s Twin Cities and Seattle.” FULL STORY: http://bit.ly/2pNUjK8
Despite thoughtful and vocal opposition, the Minneapolis City Council failed to listen to residents, property owners and managers, who argued a new ordiance would add more regulation to Minneapolis rental housing likely adding to higher rents in a stable rental market.
The Minnesota Multi-Housing Association believes the ordinance, which mandates more inspections for apartments and longer wait times, could actually lead to fewer rental units that qualify for Section 8 subsidies and increased rents across the board because property managers believe the Minneapolis Public Housing current beauracracy makes the proposal unworkable.
Without warning, election year politics led to councilmembers Elizabeth Glidden, Abdi Warsame and Lisa Goodman expediting an ordinance first introduced two years earlier that would require all landlords in Minneapolis to accept government vouchers like those provided by the federal Section 8 program.
MHA launched a campaign opposing the ordinance as Minnesotans for Sensible Housing Policy which included online and social media ads, newspaper ads, and a website calling on the likely increase in rents once the ordinance is imposed.
Incoming Multi Housing Association President Cecil Smith told MinnPost forcing participation in voucher programs would increase rents throughout Minneapolis.
“First, because of the rules involved in complying with the voucher program — landlords have to leave apartments unrented while waiting for inspections required before tenants using vouchers can move in — adds costs that landlords will want to recover in rents.
The second reason is because of the rent standards used by housing agencies to decide how much they will pay in vouchers. Landlords with rents near the rent ceiling might simply raise rents so as to exceed the standard and simply avoid the regulations. “The program is so broken that there’s an incentive for owners to price their apartments above the fair-market standard,” he said.
Those factors could lead to what the association dubbed “coastal rents,” akin to those in cities like San Francisco and New York.”
The Multi-Housing Association took out a full-page ad in the Star Tribune ahead of a planned public meeting. It said, in part:
“We know from the most highly regulated apartment markets in the country – New York and San Francisco – that more mandates mean higher rents and longer wait times to find an apartment.
In Minneapolis, the Minneapolis Public Housing Authority needs reform. A recent report outlined significant and numerous changes that MPHA needs to undertake – however the City Council wants to add additional burdens and bureaucracy to an agency that is already challenged and overwhelmed.
Meanwhile, Met Council and other local affordable housing agencies administer the same federal vouchers as the City of Minneapolis with less bureaucracy and without the mandates Minneapolis is proposing.
One recent study indicates that 84 percent of Minneapolis apartments are within $50 per month of being priced outside of participating in the program. More bureaucracy and mandates = coastal rents.”
At a public hearing March 22nd reported on by Minnesota Public Radio, Councilmember Glidden said, “If I go on Craigslist right now, I can promise you I will find multiple listings that say ‘No Section 8.’ That’s what we hope will change.” An assertion supported by testimony from tenants like Tracey Clark, a full-time college student and part-time mental health specialist who said, “I’ve been hung up on when I ask if people will take Section 8.”
MPR reported the council also heard from property owners.
The Hornig Companies owns and manages around 2,000 apartments in Minneapolis, and has some Section 8 tenants. Bernadette Hornig fears Glidden’s proposal will mean higher business expenses.
“I just don’t think this is the solution to the problem that they’re trying to address,” Hornig said. “I think it shows a pattern of mandates by the city of Minneapolis that make it really hard as a small business owner to conduct our business on a daily basis.”
Property manager Jennifer Spadine agrees. Her company, Guardian Properties, manages about 100 Minneapolis rentals and also accepts Section 8. But Spadine says taking on additional voucher holders will mean more bureaucracy.
“There’s inspections, there’s delays in the inspections, and delays in the service between us and the program, which causes loss of rent, and causes vacancy.”
Two days later, in a unanimous vote, the city council passed the ordinance. It will take effect in May of 2018. Multi-Housing Association President Cecil Smith told KSTP-TV, “the priority should have been reform of the housing choice voucher program.” The ordinance, he said, “could lower the opportunity for affordable housing in the city (and) exhilarate the gentrification of Minneapolis.”
Rent hikes are the result of tax increases and rising property values, say landlords according a new story in the Star Tribune. Adam Belz reports that new contemporary, luxury-style apartment units are being built by the thousands, and have had a major impact assessed values of other apartment buildings. Higher values, means migher taxes, and therefore higher rents
While Minneapolis’ market value of apartments has more than doubled since 2012, building owners can receive tax breaks should they provide affordable units or develop in a tax increment financing district. For those who do not fall in that category, tax bills have risen drastically.
To find an agreeable middle ground for both renters and landlords, city council members have been hard at work mulling solutions to the raising costs of apartments. Aside from section 8 housing, council members have suggested updating the zoning codes, which would allow for smaller apartment buildings that create healthy market competition and provide for better price control. If Minneapolis is to avoid a renter situation similar to New York or San Francisco, more construction must take place and vacancies must be higher.
The Minnesota Multi-Housing Association opposes all of the possible proposals.
Read more from Star Tribune here.
Minnesota is one of the most expensive locations for renters in the Midwest as we see increases in rent prices and decreases in median income since 2000. While data shows that minimum wage earners struggle to afford an unattainable rent; 14,000 men, women and children remain homeless in Minnesota.
To combat these harsh realities, Aeon was formed in 1986 by the Central Community Housing Trust to address the demolition of 350 units while the Minneapolis Convention Center was built. Almost 30 years later, Aeon helps to house 4,500 residents in 42 unique buildings including seniors, families and homeless.
With locations in the greater Minneapolis and St. Paul area, Aeon is fueled largely by donations, most of which come from their annual Beyond Bricks and Mortars breakfast fundraiser. Their 2016 edition of the fundraiser took in $538,883.
Read more about Aeon and their philanthropy at Southwest Journal here.
An ordinance was passed in West St. Paul during November that restricts where some disabled people who receive government rental assistance can live, barring them from zones that prospect apartments and townhouses in the future.
The Star Tribune reports that while disability advocates cite the ordinance as discriminatory and Dakota County officials say that the result severely restricts choice for the disabled; West St. Paul officials claim that police officers have been overburdened by calls from apartment complexes where those who qualify for support services live.
These residents might be mentally ill, physically or mentally disabled, recovering addicts or elderly according to Minnesota’s laws on financial assistance. Dakota County lists around 400 seniors and 100 disabled people that live in registered housing within West St. Paul.
City attorneys see the issue not as a restriction on civil liberties, but rather as a regulation on private business. With claims of misallocating police resources on one side and discrimination on the other, West St. Paul finds itself in a contentious debate.
Read more from the Star Tribune here.
$7.7 million in apartment and infrastructure developments are up for funding and a vote by the Metropolitan Council on Dec 14.
The Star Tribune reports on the vote, which decides if the Living Communities Demonstration Account (LCDA) grant recommendations for the developments to the Met Council will be approved. If approved, the grant recommendations would help to fund eight proposed private developments in the Twin Cities area.
With plans to develop four buildings in St. Paul, one in Bloomington, one in Hastings and two in Minneapolis; the proposed plans aim to bring 1,627 living units and 92 permanent jobs to the greater Twin Cities area.
Read more at The Star Tribune here.
The Hibbing Daily Tribune covers aging housing stock noting that 18 percent of St. Louis County residents living in poverty, affordable housing in northern Minnesota comes at the price of an aging infrastructure.
One growing issue is the aging population in St. Louis County that will inhabit 49 percent of its population at 65 years-old or older by 2030 — nearly twice that of the entire state. Aging populations tend to live in older mid-century homes that neglect improvements as incomes diminish with age. What results is that critical improvements are not made as houses age with the homeowner. Additionally, as older populations move on to assisted living situations, there are no available services to prepare older homes to be market-ready.
In all, aging homes and aging populations are leaving northern Minnesota counties like St. Louis County in an infrastructure crisis.
Read more at the Hibbing Daily Tribune here.
via MHA President Mary Rippe in the Star Tribune:
“The Met Council is working in partnership with property owners and residents in a program called the Community Choice Housing Assistance Program. The program will offer training and other services to both residents and property owners.
As with most regulated industries, the regulation of housing is complex, and the U.S. Department of Housing and Urban Development’s programs are even more complex than local initiatives.
There are 100,000 units of rental housing in the city of Minneapolis, with more apartments being built. The Glidden effort would make participation mandatory for all Minneapolis properties. It would create longer wait times for residents looking for housing by imposing onerous bureaucratic inspections on an already-stretched staff. And it would further concentrate housing disparities that the Met Council aims to disperse throughout its new initiative.” READ MORE: http://strib.mn/1UNV8Ha
EXCERPT: “The Metropolitan Council, which operates the largest housing and redevelopment authority in the state and has 6,300 housing voucher holders, launched its Community Choice program in December.
It’s aimed at families with children under the age of 10 that receive federal housing vouchers and want to move into “areas of opportunity” — places with good schools and lower poverty levels. The families spend 30 to 40 percent of their income on rent and use vouchers to cover the balance.
Excerpt from the Family Housing Fund Report: OWNERS/MANAGERS CREATING OPPORTUNITY:
Analysis of Owner/Manager Feedback
The owners/managers who participated in the interviews and focus groups expressed a deep desire to see the Housing Choice Voucher Program succeed. Many of them conveyed heartfelt accounts of having seen the program serve as a bridge out of poverty for working families. To enable the Housing Choice Voucher program to best serve families, families must have access to a variety of housing choices; in order to provide choice, owners of properties across the region must participate in the program. This research highlights three areas in which the Family Housing Fund and its partners can influence the number of owners that participate in the program:
Partnership: Above all else, PHAs must authentically partner with property owners/managers. PHA programing cannot succeed without the participation of property owners/managers throughout the region.
Discretionary Policies: While HUD sets most of the Housing Choice Voucher program requirements, PHAs have some discretion on local administration of the program. The data collected through the Owners/Managers Creating Opportunity project indicates that there are two areas of discretion that are particularly important to cultivating positive relationships with the landlords and creating choice for families.
Resident accountability: Owners/managers want to know that residents will be held accountable. Following best practices of agencies, like not paying out vouchers at a new unit until damages are paid to the previous owner/manager, will reassure those owners/managers that there are incentives for responsible resident behavior.
READ THE FULL REPORT: LINK
- Minnesota Public Radio: Developers see plenty of growth in senior housing market
- KAAL-TV: Sen. Smith Looks for Local Insight on Affordable Housing
- MinnPost: Minneapolis’ ‘inclusionary zoning’ policy takes shape, even as developers cry foul
- Minnesota Public Radio: Not enough affordable housing? What about ‘mobile’ homes?
- MinnPost: Affordable housing and the 2020 presidential election
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