CITY OF MINNEAPOLIS 4d Affordable Housing Incentive Program 2018-2019 Results Dean Porter-Nelson, AICP Housing Stability Specialist, Minneapolis CPED 1
Overview • 4d Program Background • 4d 2018-2019 Results • 4d Energy Efficiency and Solar Results 2
4d Program Requirements • 10 year affordability declaration stating: • >20% of units remain affordable to households making 60% of Area Median Income (AMI) • Rent increases on tenants limited to <6% annually. Larger increases up to 60% AMI cap permitted at unit turnover only. • Eligibility guidelines • Tier 1 or 2 rental license & no outstanding orders or revocations • 2+ units in building or on the tax parcel • Benefits for property owners • 10 year eligibility for State’s “LIRC” program, reducing property tax liability by 40%, applicable to affordable units only • Targeted energy efficiency, solar funding • $100/unit grant & assistance with admin. Costs • Ongoing compliance • Report rents & tenant incomes to City • Submit LIRC/4d renewal paperwork Minnesota Housing status 3
4d 2018 – 2019 Results 4
Number & size of 4d units (2018 – 2019) • 770 total units enrolled to date • Mix of unit sizes including 214 units with 2+ bedrooms Unit Type 2018 2019 Total % of total Studio 49 61 110 14% 1 BR 127 319 446 58% 2 BR 33 122 155 20% 3 BR 0 45 45 6% 4 BR 0 11 11 1% 5 BR 0 1 1 0% 6 BR 0 2 2 0% Total # of Units 209 561 770 Total # of 242 820 1,062 Bedrooms 5
Location of Units by Ward (2018-19) • At least 1 property in each City Council Ward • Wards 4, 5, 10 had highest unit totals 6
Number of Units by Neighborhood (2018-19) • 38 neighborhoods (46% of all neighborhoods) had at least 1 property • Whittier, Folwell, Marcy Holmes, Eliot Park had over 60 units • 2-4 unit eligibility helped spread affordable units across multiple neighborhoods 7
Median rents, 4d units (2019) • Typical 4d unit is 15-25% below 60% AMI rents • Tenants protected by 6% cap on rent increases Unit Size Current median rent 60% AMI rent % below max Studio $750 $991 24.3% 1 BR $845 $1,062 20.4% 2 BR $950 $1,273 25.4% 3 BR $1,250 $1,471 15.0% 4 BR $1,400 $1,641 14.7% 5 BR $1,275 $1,811 29.6% 6 BR N/A N/A N/A 8
4d application statistics (2019) • Applications for 996 units • 56% were enrolled in the 4d program for 10 years • 41% of units not enrolled due to property owner withdrawing or not completing enrollment paperwork • Vast majority of completed applications (97% of units) met housing quality minimum requirements Application Status Total Units % of total Property enrolled in the program 561 56% Property owner withdrew/did not 406 41% complete enrollment Application denied – Tier 3 license or 29 3% open housing violations Total 996 9
4d property owner statistics (2018-2019) • 51 unique property owners • 8 in 2018: 26 units average per owner • 43 in 2019: 13 units average per owner • 129 buildings total • 17 enrolled in 2018, 12 units average size • 112 enrolled in 2019, 5 units average size. • 74 2-4 unit properties with 168 units total (30% of 2019 unit count) • 38 5+ unit properties with 393 units total (70% of 2019 unit count) 10
4d Energy Efficiency & Solar 4d Energy Efficiency 2018 2019 # projects proposed/complete 3 13 Cumulative investment anticipated $106,817 $267,701 City cost share invested $66,111 $221,241 Annual energy savings (Million BTUs) 854 1,260 4d Solar Energy 2018 2019 # projects proposed 2 Cumulative investment anticipated $219,835 City solar cost share $28,584 kWh anticipated production NA 66.5 Annual energy savings (Million BTUs) NA 278 11
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Questions? Dean Porter-Nelson Housing Stability Specialist City of Minneapolis - CPED dean.porter-nelson@minneapolismn.gov (612) 673-5237 Beth Barron, owner - 2715 Humboldt Ave S is able to keep rents low thanks to reduced taxes and 90% cost share on a new boiler, water heater, and wall insulation 13
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