March 2018 Housing Update

Dan Gregory February 22, 2018

This is the March 2018 Housing Update where we share what’s going on in the world of affordable housing.

  1. As middle and high-end apartments are going up all around the Twin Cities, the Met Council wants to make sure there is affordable housing and is willing to foot the bill to make it happen.

The Metropolitan Council (the “regional governmental agency and metropolitan planning organization in Minnesota serving the Twin Cities seven-county metropolitan area,” if you’re unfamiliar), recently approved $5.2 million(+) for projects in four Twin Cities metro areas.

The plan for the money is a simple one: Clean up brownfield sites, develop affordable housing, and create “models of mixed-use and transit-oriented development, job growth and economic opportunity.”

  1. The City of St. Paul is offering rental rehabilitation loans for landlords to upgrade their rental properties.

Only owners of small rental properties, single-family, duplex, triplex, or fourplex buildings, are eligible for the loans. Landlords must agree to not raise rent more than 3 percent annually during the loan’s life.

Loans will be available to landlords with Class C and D properties, the lowest conditions within the city’s rankings. Those class requirements will be loosened in low-income, high-minority neighborhoods.

The original goal of the program was to help declining housing in areas of racially concentrated poverty, said city staff from the Department of Planning and Economic Development.

In a related story, CityLab reports that dilapidated rental housing are some of the biggest wasters of energy, leaving low income Americans saddled with high utility bills. Private and Public programs are doing what they can to rehab buildings to be more energy efficient when it comes to homes and public housing, but that leaves out one group; renters:

A growing network of programs, both private and public, is trying to correct the imbalance. Local housing authorities all over the country have upgraded their public housing units and designed affordable-housing tax credits that ensure a high degree of energy efficiency. Non-profits and utility companies are helping homeowners make upgrades to their homes by deferring upfront costs and using energy savings to pay down the debt.

But for all the good they do, many of these initiatives sideline a large and vulnerable group of low-income individuals: renters. The number of Americans who use HUD vouchers in the private market greatly outnumbers the public-housing population. And the number of urban renters is only increasing as home prices soar out of reach.

Renters are left out of the efficiency boom because they’re left to the whims of their landlords’ investment decisions. If a tenant pays their own utility bill, there isn’t much incentive for the landlord to make improvements. And renters are unlikely to make long-term efficiency improvements themselves, uncertain of whether they’ll be able to stay there long enough to reap the benefits.

  1. Do you know what an Unlawful Detainer is? It’s a legal term for when a landlord tries to evict someone.  Most of the time, these UDs are because of missed rent. The problem is that even when the back rent is paid, the records still remain and they have an effect on potential renters looking for housing in the Twin Cities.  Minnesota Public Radio did an indepth report on UDs and how they affect low income families in Minnesota.
  1. A heavily wooded property in Minnetonka is the site a new condo development with prices starting at $625,000.  Before it was slated for upscale housing, the property was slated for affordable homes. The Shelter Corporation pulled their plans in 2017 because the affordable housing tax credit market collapsed as a result of the 2016 elections and expected tax changes. Low-income tax credits is a way that affordable homes get built, and after 2016, the market went down by 20 percent.  Read Finance and Commerce to learn more.

  1. President Trump recently released his proposed budget. Curbed reports that at a time when affordable housing is scarce, the president’s budget seeks to reduce the federal role in providing affordable housing:

Trump’s budget request for the Department of Housing and Urban Development (HUD) eliminates two block grant programs in their entirety that state and local governments use to fund affordable housing and infrastructure projects. The Community Development Block Grant (CDBG) program allocates $3 billion annual to such projects, while the HOME Investment Partnerships program gives communities a little less than $1 billion annually.

The administration’s rationale for cutting these programs is that they’ve “failed to demonstrate effectiveness,” while also making a vague reference to wanting to give more authority to state and local governments “that are better equipped to respond to local conditions.” In fact, these programs allocate funds to state and local governments to use as they see fit given local conditions anyway.

In related news, the Trump Administration is looking at work requirements  for some public housing tenants and rising rents for others.

  1. 1968 marks the fiftieth anniversary of the Fair Housing Act, which banned discrimination in housing.  But the law didn’t end racial discrimination in housing.  The Center for Investigative Journalism looked into how African Americans are treated when it comes to housing and the result is not good. You can read and listen to the story Kept Out which is featured on public radio’s Reveal.
  1. California has a housing problem. How do you solve it?  Two ideas: the first is using cryptocurrency like Bitcoin.  Another idea is loosening zone restrictions.
  1. We believe that all people have a home.  Canada is moving in the direction of making housing a human right.

That’s it for the March Housing update. If you have a news story to share, please send it to Dennis Sanders. We will take a look and it might show up on an upcoming housing update.  See you next month.