Dialogue reveals numerous housing challenges for Central MN
Stakeholders from central Minnesota gathered in St. Cloud this week to discuss the region’s affordable housing needs. Workforce housing, single family home rehab, the preservation of naturally occurring affordable housing, and worries over rising construction costs appeared as common themes throughout the discourse. Minnesota Housing Finance Agency, Greater Minnesota Housing Fund, and USDA Rural Development hosted the discussion and listened to concerns presented by local housing leaders.
In recent years, Minnesota Housing, USDA and GMHF have hosted similar community dialogues across the state to inform and engage community leaders on their housing needs. The event in St. Cloud was one in a series of these dialogues with others to be scheduled later in the year.
John Patterson of Minnesota Housing kicked off dialogue by presenting on the housing trends in central Minnesota’s Stearns, Benton, Sherburne and Wright counties. Minnesota Housing’s research indicates a rise in homeownership, but also greater homeowner cost burden since 2000. Patterson noted that monthly homeowner costs have increased by as much as $287 in the St. Cloud area while homeowner household income remains stagnant since 2000. Minnesota Housing also reports that St. Cloud area renters are feeling the squeeze as 50% of renters are paying more than 30% of their income on rent therefore making them cost- burdened. Monthly rents have increased as much as $177 since 2000 and renter income has decreased in Benton, Sherburne, Stearns, and Wright counties. These trends coupled with an aging population and a increasingly more diverse demographic underscore an urgent need for more affordable housing options in the St. Cloud area.
Megan Carr of Sand Companies and Greg Simones of Minnwest Bank, expressed concerns on multifamily development in central Minnesota. Carr and Simones both shared that central Minnesota development projects frequently underscore on Minnesota Housings’ competitive Request for Proposals (RFP) process. Low scores often translate into no funding reward from Minnesota Housing which means many multifamily developments cannot progress in central Minnesota. Carr suggested that development projects in the Metro frequently score higher because of a willingness in Metro communities to contribute to affordable housing. Attendees noted that nimbyism is pervasive in central Minnesota with many local governments reluctant to finance affordable housing from local sources. Both Carr and Simones also pointed towards the RFP timeline as problematic. By the time funding awards are made in October construction season has concluded which means another 6 months until construction can begin. In that time gap, development cost estimates fluctuate which then jeopardizes the project’s financing and raises costs.
Lisa Marvin of Essence Property Management raised concerns on workforce housing and the preservation of naturally occurring affordable housing. During discussion Marvin informed Minnesota housing officials that individuals at 61% Area Median Income (AMI) and above can rarely find affordable units. Most units that are funded by Housing Tax Credits can only serve renters with incomes below 60% AMI. This leaves many working families with few affordable options as their incomes are too high for the more deeply subsidized units. Marvin additionally addressed naturally occurring affordable housing and the lack of incentives to preserve these units. Naturally occurring affordable housing represents unsubsidized units that are low on amenities and make up the older portion of the areas’ housing stock. In a tight rental market like in St. Cloud rents are rising on naturally affordable units which then stretch the resources of low-income renters. Marvin asked Minnesota Housing representatives if anything could be done to keep these units affordable.
Participants in the dialogue also expressed concerns on the need for more single family rehabilitation. Many homeowners in central Minnesota who lost jobs, assets, etc. during the recession deferred maintenance on their homes. Many homeowners still lack the ability to keep up with needed with many homes failing inspections. Prospective buyers shy away from properties with sizeable maintenance backlogs meaning that the need for single family rehab is huge. Many of the resources that could aid in single family rehabilitation such as USDA’s 502 mortgage purchase remain obscure with other resources like Community Development Block Grant (CDBG) being viewed as suspicious. John Reis of the United Way and Deanna Hemmesch of Central Minnesota Housing Partnership called for stronger partnerships across sectors that would be accountable to a shared housing agenda. Both, Ries and Hemmesch lamented that too often these coalition forming conversations occur with little follow-up afterwards.
Numerous participants in the discussion shared experiences of community resistance to affordable housing projects. Many times when a developers proposes an affordable housing development to a local government entity current residents express fears that “the wrong type of people” will then move into the area, lower property values, and create problems for local municipalities. Attendees of the dialogue universally agreed that such stigma on affordable housing is false, and that efforts need to be made to combat NIMBYism (Not in My Back Yard).