Advance Notice of Sale Ordinance Economic Development & - - PowerPoint PPT Presentation

CITY OF MINNEAPOLIS

Advance Notice of Sale Ordinance

Economic Development & Regulatory Services Committee Meeting October 23, 2018

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Minneapolis is now a majority renter population; most people of color are renters while white residents are more likely to own instead of rent

• Renter occupied units have had the larger share since 2010, and renter households are growing faster

than owner households

• White households are the only households in which the majority are owner-occupied
• There are more than 85,000 renter households in Minneapolis – nearly 40,000 are headed by a person of

Color

83,408 82,579 80,777 78,944 74,047 88,529 2000 2007 2014 Owner HH Renter HH

47.4% Tenure (Owner/Renter Status) for Minneapolis, 2000-2014 52.3% Source: U.S. Census Bureau, American Community Survey 1-year estimates

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• Cost burdened households spend

30% or more of household income

• n housing.
• Severely burdened households

spend 50% or more of household income on housing.

• Renters represent about 3 out of 4

cost burdened and severely cost burdened households

• Of the 89,420 renter

households in Minneapolis, 50,000 earned less than 60% of AMI

• Cost burden falls

disproportionately on households of color, who are more likely to rent than white households

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Minneapolis renters spend a disproportionate amount on housing

• 45% of Black owners are cost burdened compared with 27% of White owners.
• About 1 in 2 American Indian households are cost burdened regardless of tenure.

Source: 2009-2013 HUD Comprehensive Housing Affordability Strategy estimates 45% 47% 31% 33% 32% 27% 59% 48% 52% 48% 48% 40% Black or African- American American Indian or Alaska Native

• ther (including

multiple races) Hispanic Asian White

Owner Renter

Share of racial group that is cost burdened by owner renter status Minneapolis, 2009-2013

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Cost-burdened households are disproportionately communities of color

Rental Housing Data: NOAH in Minneapolis

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• 95,000 rental units
• 29% are 1-3 units – limited market

data

• 71% are 4+ unit buildings – more

market data

• 4+ unit buildings
• About 15,000 units affordable to

households with incomes at or below 60% AMI

• Average building size = 17 units

(compared to 149 units in Class A)

• Increase in Sales
• 288 unit sales in 2010; 4,005 units

sold in 2017 (~8% of total units)

• Rents of sold units increased more

than rents of unsold units

NOAH Preservation Strategy

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• Incentives for existing NOAH owners
• 4d tax incentive pilot: ~40% reduction in property taxes
• Support acquisitions that preserve NOAH
• Minneapolis NOAH Preservation Fund: $3 million, 0%

interest deferred loan to non-profit buyers

• Small and Medium Multifamily acquisition pilot (SMMF

Pilot): $1.9M per year, partnership with TC Land Bank and Local Initiatives Support Corporation

• NOAH Investment Policy: partner w/Freddie Mac; city

purchases participation certificate bond, allowing NOAH buyers to get lower mortgage rate

• Support tenants
• Tenant hotline serving 3,000 renters annually
• Tenant Legal Services: legal partners provide tenant

representation in housing court

Adv dvance ce N Notice ce of Sal ale Or Ordinan ance ce

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• Supports NOAH Preservation Efforts
• Provides tenant protections after a

sale occurs

Adv dvance ce N Notice ce of Sal ale Or Ordinan ance ce

• Notice of Proposed Sale: Owners of NOAH

property are required to give notice to the City 60 days prior to making the property available for sale

• Notice required to be posted in the common areas of

building

• NOAH property:
• 5 or more units
• At least 20% of the units are affordable to households

with incomes at or below 60% of the Area Median Income ($56,880 for 4-person household)

• Goal: provide potential preservation buyers and

tenants information earlier in the process

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Adv dvance ce N Notice ce of Sal ale Or Ordinan ance ce

• Notice of Sale: New owners required to give notice

to all tenants of affordable units and the City within 30 days of sale informing tenants of tenant protections

• Tenant Protections:
• In place for 90-days after notice of sale given
• Eligibility for relocation assistance if new owner takes
• ne of the following actions:
• Terminates or does not renew lease without cause
• Increases rents
• Initiates re-screening
• Relocation assistance is 3 months rent

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Adv dvance ce N Notice ce of Sal ale Or Ordinan ance ce

• Exceptions
• Affordable housing building subject to federal, state or

local rent or income restrictions that continue to remain in effect after the sale

• Sale or transfer of an affordable housing building to a

new owner who participates in or commits to participate in the City’s 4d program

• The sale or transfer of an affordable housing building

through a 1031 exchange.

• Effective Date
• January 1, 2019

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