Housing Update- February 2018
Here are some highlights of housing news taking place recently.
- A new year means new mayors for both Minneapolis and St. Paul, as well as new council members. The Minneapolis City Council has dove right into the issue with the creation of a Housing Policy and Development Committee, which is tasked with oversight on current and future affordable housing policies. Minneapolis’ new mayor Jacob Frey, is also leading the charge towards providing more affordable housing in the state’s largest city.
Across the river in St. Paul, Melvin Carter, the new mayor of the state capital, includes affordable housing among the many issues he wants to tackle. In addition, the old St. Paul Pioneer Press building is being converted to affordable housing after initial plans to convert it to more luxury apartments.
- The Twin Cities didn’t make it on the shortlist of cities where Amazon will place its second headquarters. The Minnesota Daily thinks that there is a blessing in not getting picked:
“The benefits of hosting the new headquarters are plentiful and undeniable. Thousands of high paying jobs and an initial $5 billion investment is hard to refuse. Yet having to provide incentives as high as $7 billion in order to win the bid is a legislative and political burden; one the state might not have been able to match. Additionally, housing has been a point of contention in the Twin Cities because of rapid growth. Affordable housing and gentrification were a hot button issue in the municipal elections during the fall, and the problems facing the city in this regard would rapidly grow if Amazon touched down in Minnesota.”
- Minnesota and the Twin Cities in particular, have had a reputation for good government, good lives and overall friendliness as a 2015 Atlantic article noted. But the truth is far darker. Next City magazine shows that racial history of Minneapolis is a history of restrictive covenants telling owners which group of people are banned from buying a house. That racist history has is still making an impact decades after the practices were banned:
“Minneapolis has traditionally regarded itself as a “model metropolis,” Delegard says: a relatively affordable place with world-class parks, a strong economy and a tradition of volunteerism. But, as Delegard says and as Politico detailed last year, the city also has some of the worst racial disparities in the nation. The goal of Delegard’s project is to confront the grand narrative of the Twin Cities head on, and reveal the racist underpinnings of what many Minneapolitans believe to be a city that was never segregated in the way cities in the South were.”
- In a related story, the Department of Housing and Urban Development under President Obama created a rule the required communities to deal with racial disparities in housing. Under President Trump, those rules are now being delayed:
“HUD established the Affirmatively Furthering Fair Housing final rule in 2015, fulfilling an unmet mandate of the Fair Housing Act of 1968. That groundbreaking civil rights law, which forbids racial discrimination in housing, also requires local governments to work to desegregate their communities. However, the provision of the law that called on policymakers to “affirmatively further” fair housing has always proven tricky to implement or enforce.
Forward momentum on housing desegregation finally arrived in 2015, when the U.S. Supreme Court ruled that the Fair Housing Act prohibited policies that negatively affect protected minority groups, even without an explicit statutory intent to do. The Obama administration followed this “disparate impact” decision with the AFFH rule: a directive to any community receiving block-grant funding from HUD to complete a comprehensive Assessment of Fair Housing.
The notice delivered by HUD Secretary Ben Carson, which will appear in the Federal Register on Friday, does not revise AFFH or change the Assessment of Fair Housing requirement. But it gives participating jurisdictions—about 1,200 total—until October 31, 2020, or after to submit their assessments.”
- Homelessness and affordable housing are issues that affect the suburbs as much as the core cities. In December, Southwest News Media did a series of stories on poverty in the Southwest suburbs. It included Beacon’s efforts in Scott and Carver Counties with Families Moving Forward-Southwest. Meanwhile, the suburb of Golden Valley is working to an affordable housing including protecting low-income renters. In New Hope, Aeon, an affordable housing non profit is purchasing two apartment properties that will provide more affordable housing in the Hennepin County suburb.
- The tax overhaul bill passed in December and was signed into law by President Trump. The overhaul lowered the corporate tax rates from 35 percent to 21 percent. While the lower rate brings the United States in line with other countries, it will have an impact on building affordable housing. The 1986 tax overhaul created a special tax credit that was able to encourage the private market to build affordable housing. The lower tax means the value of the credits is now lowered. The New York Times explains this in detail:
Programs to build subsidized rental housing date back to the Great Depression, and were greatly expanded during President Lyndon B. Johnson’s “war on poverty.” Support for these programs started to wane under President Richard Nixon, and they were vastly scaled back under President Ronald Reagan.
But unlike public housing programs, which tended to expand under Democratic administrations and shrink under Republican ones, tax credits proved enduring and politically popular.
Conservatives saw the approach as a tax break and a way to use private markets to solve public problems. Liberals saw it as a way to direct federal money to local communities. Since 1987, it has funded construction and rehabilitation of about 30 percent of the nation’s 10 million affordable units, which are defined as units that people making 60 percent or less of a city’s median income could afford.
“It’s the most successful social program that nobody has heard of,” said David Erickson, director of community development at the Federal Reserve Bank of San Francisco and the author of “The Housing Policy Revolution.”
- A Bipartisan group of mayors are going to Capitol Hill ask Congress to maintain funding for Affordable Housing and offering new opportunities. Citylab reports:
The mayors of Los Angeles, Oakland, Denver, Phoenix, and other cities spoke alongside leaders from Airbnb and Sutter Health about efforts to drive more affordable housing in urban, suburban, and rural communities. The coalition has emphasized public–private partnerships (such as the John and Jill Ker Conway Residence) as a way to build new and more deeply affordable housing.
Mayors & CEOs for U.S Housing Investment has proposed several strategies to advance the interests of America’s most vulnerable populations. One set of objectives is straightforward: Put pressure on the Department of Housing and Urban Development and members of Congress to resist budget cuts for existing programs that are essential to building and maintaining affordable housing. These include Community Development Block Grants, Section 8 housing vouchers, and other critical programs in the Trump administration’s crosshairs.
This is the Housing update for February. See you next month.