How Minneapolis policy could boost affordable housing.
A new proposal rolled out by Minneapolis Mayor Jacob Frey on Monday could make the city an easier place to build affordable apartments and homes for lower-income residents.<br />Among the policy changes is a proposal to raise the city's $25,000-per-unit spending cap on affordable housing loans. That alone will help developers bring more units to market faster, said David Wellington, director of acquisitions and development for St. Paul-based Wellington Management. Wellington was present at a Monday press conference at which Frey detailed the affordable housing profile.<br />"That $25,000 cap per unit is a constriction," Wellington said in a separate interview. "It puts projects in jeopardy that could otherwise be built."<br />Building new homes is at the heart of the plan, which also includes rental subsidies, renter protections and a property tax discount to encourage the preservation of naturally occurring affordable housing. But much of the policy is aimed at getting more affordable homes on the market.<br />An affordable housing task force that wrote the policy is recommending Minneapolis budget $50 million in 2019 for its Affordable Housing Trust Fund Program. A portion would go toward housing development in the city. If approved, the amount is about four times the record allocation of $10.5 million, Frey said, although a final budget request has yet to be determined.<br />Minneapolis lost about 10,000 affordable housing units after the 2008 recession, Frey said, as incomes in the city failed to keep pace with rising rents. The city needs to start rebuilding that inventory, Frey at Monday's event, which was held at the Blue Line Flats in the city's Corcoran neighborhood. The 135-unit complex, at 2340 E. 32ndSt., is 300 feet from the Lake Street Midtown Station on the Blue Line light rail transit route.<br />More money will help, he said. "We know that will take more funding and I intend to make a historic investment in our affordable housing fund," Frey said.<br />The announcement comes after months of public meetings and work by an affordable housing task force to come up with what Frey called an "aggressive and ambitious" proposal.<br />In addition to the increased funding, Frey said he wants to "double or triple" the number of vacant city-owned lots made available annually for housing construction. The city currently makes about 30 lots available per year, he said. The city has more than 400 lots in its inventory, according to Frey's office.<br />The increase in the affordable loan cap, in particular, would allow the city to give developers more money toward affordable units, which Frey said would encourage housing projects affordable to families earning as little as 30 percent of the area median income of $94,300 for a family four. The affordable housing task force has not yet determined what the new loan cap should be.<br />Most affordable units are built for people earning 50 percent to 60 percent of the area median income, he said.<br />The additional funding could bring more units to market faster, said Wellington, whose company has developed about 50 units of affordable housing annually for each of the past five years, he said. Frey's proposal could help triple that number to 150 units.<br />Resources for the new affordable housing policy proposal would be "broad-based," Frey said, explaining that money would come from the general fund, existing pools of money in the city, and from state and federal sources.<br />Although much of the proposal centers on rental housing, it is also designed to boost home ownership in the city, said Peter McLaughlin, a Hennepin County commissioner and a co-chair of the affordable housing taskforce.<br />"The last recession shot us back about 20 years in many neighborhoods for home ownership," McLaughlin said.<br />About 47 percent of the city's residents live in homes they own, according to the most recent figures from the U.S. Census Bureau.<br />[divider]Related:<br /> Experts Forum: What's next in affordable housing?<br />[divider]<br />Like this article? Gain access to all of our great content with a month-to-month subscription.Start your subscription here.<br />
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|Publication:||Finance and Commerce|
|Date:||May 15, 2018|
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