CPED Approaches & Initiatives for Affordable Housing Public - - PowerPoint PPT Presentation

CITY OF MINNEAPOLIS

CPED Approaches & Initiatives for Affordable Housing

Public Health Advisory Committee

July 25, 2017

Agenda

• Housing trends and policy implications
• Affordable housing resources
• Project examples
• City housing strategies
• Discussion

Minneapolis Population

100,000 200,000 300,000 400,000 500,000 600,000 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040

Total Population for Minneapolis, 1920-2010; Projected Population for Minneapolis, 2020-2040 Historical High: 521,718

Source: U.S. Census Bureau, Metropolitan Council

Population by Race

• The city’s population of Color has grown at a faster rate than the population

as a whole

• In 1990, around 2 in 10 residents indicated a race other than White, non-
• Hispanic. As of 2010 this number had increased to 4 in 10, and is projected to

grow

368,383 382,618 382,578 82,974 143,538 151,928 1990 2000 2010 Total population Of Color

Total Population and Population of Color, Minneapolis 2000 - 2010 Source: U.S. Census Bureau, Decennial Census

Minneapolis and Regional Demographics

Minneapolis Region Population 412,517 3,005,419 Median Household Income $50,767 $85,800 % of households at or below poverty 22.6% 11.1%

5

75.2% 24.8%

Twin Cities

White, non- Latino People of color 61.0% 39.0%

Minneapolis

White, non- Latino People of color

Household Income

• Household income in Minneapolis is slightly down from 2000, and unchanged from 2005-2009
• Since 2005-2009, Asian and White non-Hispanic households saw statistically significant increases

in income

• Income for Black households saw real decreases of nearly 20% across the two five-year time

periods

$52,205 $50,767 $34,834 $19,500 $34,828 $21,847 $30,890 $43,194 $58,058 $62,230 $44,469 $36,022 2000 2005-2009 2010-2014 MPLS Black or African American American Indian Asian White NH Hispanic

Median Household Income for Selected Racial Groups Minneapolis 2000-2014 (2014 inflation-adjusted dollars) Source: U.S. Census Bureau, American Community Survey 5-year estimates

Shifts in Owner/Renter Status

• Across 1970-1990, renters represented a slight majority of occupied housing units
• Across 2000-2009, owners represented the majority of occupied housing units,

reversing a decades-long trend

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

growing faster than owner households

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

Homeownership Gap

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59.3% 75.6% 23.7% 37.8% 35.6% 37.8%

Minneapolis Twin Cities Share of White, non-Latino households who own their home Share of households of color who

• wn their own home

Homeonership Gap 180% likelihood of a white applicant being approved for a mortgage compared with a person of color

Changes in Household Incomes and Costs

• Owner households as a group are largely better off than in 2000, with

increasing incomes and stabilized housing costs

• Compared with those who were renting in 2000, today’s renters face

reduced incomes and increasing rents

Source: U.S. Census Bureau, American Community Survey 1-year estimates

11%

• 14%

0% 11%

Owner Renter

Income Housing Costs % Change in Median Income and Median Housing Costs by Owner/Renter Status, Minneapolis, 2000 - 2014

Cost Burdened Households

• A household is:
• Cost burdened if 30% or more of household income is spent on

housing.

• Severely cost burdened if 50% or more of household income is spent
• n housing.
• 37% of all MPLS households are cost-burdened
• Renters represented about 3 out of 4 cost burdened and

severely cost burdened households

• 74% of today’s MPLS renters at 50% of AMI are cost-

burdened

• up from 64% in 2000.

Source: U.S. Census Bureau, American Community Survey 1-year estimates

Affordability of Housing Units

• Despite the City producing or preserving 8,900 housing units affordable at 50% of AMI, units

affordable at that income level have decreased dramatically.

• There were around 8,000 fewer rental units affordable at 50% of AMI across 2009-2013

compared with 2000.

• Met Council estimates that by 2014 this loss grew to 11,500 rentals affordable at 50% of

AMI.

Source: U.S. Census Bureau/HUD; Comprehensive Housing Affordability Strategy 2009-2013 5-year estimates, Metropolitan Council Housing Affordability Estimates, 2014

50% 38% 50% 62% 2000 2009-2013

Unaffordable at 50% of AMI Affordable at 50% of AMI Share of Housing Stock (Owner & Renter) Affordable at 50% of AMI Decreased affordability

About 171,660 total housing units

50% of AMI for a family of four was $45,300 in 2015

About 168,700 total housing units

Vacancy Rate by Rent and Average Rent in Twin Cities Region

12

Tightening Rental Market

• Average per-unit sales price increased 56% compared with

2006-2010 in the Twin Cities

• $88,000 per unit in 2015
• Average rent has increased 5% in the Twin Cities
• 2009: $1,002 (2015 dollars)
• 2015: $1,046
• Median Twin Cities renter can afford around $910 per month
• Median MPLS renter can afford around $765 per month
• In Minneapolis alone, there were 355 apartment property

sales that included 10,512 units from 2010 to 2015

• 40% of all metro
• 57% of rental units sold are in racially diverse areas
• 47% of rental units sold were located in moderate income areas

Sources: MN Housing Partnership analysis of Marquette Advisors Rent and Vacancy Data; Costar Multifamily Property Sales Data; American Community Survey 5-year Estimates

Average Home Prices

14

Community Name 2014 Average Home Sale Price 2016 YTD Average Home Sale Price Projected 2016 Mortgage Payment* % change in sale price 2014 - 2016 City of Minneapolis $205,000 $230,000 $ 1,027.89 12% Near North $101,000 $134,000 $ 598.85 33% Camden $101,250 $136,400 $ 609.58 35% Phillips $115,000 $157,000 $ 701.64 37% Powderhorn $168,000 $199,900 $ 893.37 19% Northeast $179,500 $220,000 $ 983.19 23% Longfellow $196,250 $230,000 $ 1,027.89 17% University $226,000 $240,950 $ 1,076.82 7% Nokomis $222,375 $245,600 $ 1,097.60 10% Central $321,000 $300,000 $ 1,340.72

• 7%

Calhoun-Isle $318,500 $343,000 $ 1,532.89 8% Southwest $323,500 $353,419 $ 1,579.45 9%

Accessibility to 30-80% AMI households* Most Moderate Least

• Income level directly impacts where households are most able to purchase homes
• Higher cost areas require long term affordability assistance to be accessible
• Lower cost areas require development assistance and may be naturally affordable

Source: MLS data, December 18, 2016 *Assumes FHA terms: 3.75% interest rate, 97% loan to value, 30 year fixed rate mortgage with annual cost of $2,500 for property taxes and insurance.

Recap

• Minneapolis will have more people and households in

the coming decades

• There are sustained racial disparities in all aspects of

housing

• The number of housing units affordable to lower

income residents is decreasing

• Renter households are growing faster than owner

households, and face tougher economic realities with higher costs and lower incomes

• A tightening rental market is one of many factors

contributing to reduced affordability and limited fair housing choice

Key Policy Implications

• Affordable housing resources
• Affordable Housing Trust Fund
• Family Housing Initiative
• Mixed income housing
• Incentives for more affordable housing in primarily market rate

developments

• Preservation of affordable housing
• City’s NOAH Preservation Fund
• Notice Provisions
• Longer term affordability
• Homeownership capacity building
• Fair housing choice

City Affordable Housing Resources

• Affordable Housing Trust Fund - $8.5 million
• Family Housing Initiative - $1 million
• Naturally Occurring Affordable Housing (NOAH)

Preservation - $1.5 million

• Higher Density Housing Acquisition - $400,000
• Homeownership Development - $1.5 million
• Homeownership Assistance - $1.6 million
• Homelessness initiatives - $1 million

Total - $15.5 million

Lake Street Station

• 64 affordable senior units
• Transit-oriented development
• Unique design – fit between a busy shopping

center and the Lake Street LRT station

Franklin Gateway (The Rose)

• Mix of long-term homeless, tax credit, and

market rate units

• High performance design, efficient energy use,

healthy building materials

• National awards for environmentally

sustainable living for low income households

Commons at Penn

• 47 affordable 1BR-3BR units
• Will soon house Wirth Cooperative Grocery
• Area is a food desert according to USDA
• The developer - Devean George - grew up a mile

from the project

• Financed 105 sustainable, green, new

construction homes in North Minneapolis

• Program started in 2012
• Most affordable new construction home
• pportunities in the City of Minneapolis
• average GHN sale price: $184,000
• average city-wide sale price: $566,000
• Designed to build developer capacity to

meet green certification requirements

• 49 homes sold / 56 under construction
• Households served primarily represent

underserved populations in region:

• 61% households of color
• Average household income $48,700,

which is 56% of area median income

City of Minneapolis Housing Strategies

• Infill development
• Minneapolis Homes
• Mixed-income strategy
• Naturally Occurring Affordable Housing

(NOAH)

• Analysis of Impediments

Infill Development

23

• Almost 400 lots located in

North Minneapolis

• Concentration due to 2011

tornado and historic foreclosure and disinvestment trends

• South Minneapolis and

Northeast Minneapolis lots in high demand

• Future strategy to preserve

affordability in Northeast and South Minneapolis and encourage development in North Minneapolis

24

• Rebranding of single family housing strategies
• BUY
• Purchase move-in ready home
• Down-payment assistance available
• BUILD or REHAB
• Opportunity to purchase city-owned vacant lots or buildings
• Required long-term affordability in Northeast and South

MPLS

• Mechanical & Environmental requirements (ventilation,

lead paint, asbestos, radon, mold)

Mixed Income Strategy - Multifamily

• Affordable Housing Trust Fund, Low Income Housing Tax

Credits (LIHTC), Tax Exempt Bonds: new requirement to meet Minnesota Green Communities standards

• Design for resident health; active design inside and outside
• Compact, connected, proximate to serves
• Low/No VOC materials, paints, adhesives; no formaldehyde, mold

prevention

• Ventilation, water drainage, mold prevention, radon mitigation,

integrated pest management, lead risk assessment

• Resident manual with green/healthy activities
• Higher Density Housing Corridor Program: acquire,

assemble sites for higher density affordable housing

• Collaboration with MPHA

Naturally Occurring Affordable Housing (NOAH) Strategy

• Investment Policy change 2016: Allows City investment

in mortgage backed securities issued by Freddie Mac where underlying mortgages are for Minneapolis NOAH properties.

• NOAH Preservation Fund: $1.5 million to assist non-

profit housing providers acquire and preserve NOAH properties

• Changes to the Affordable Housing Trust Fund and other

city policies to support preservation

• Development of new strategies for “distressed” NOAH

Analysis of Impediments to Affirmatively Furthering Fair Housing Addendum

• Resolution of fair housing complaint
• Significant community engagement
• Recommends two-pronged approach:
• Expand affordable housing in areas of opportunity
• Coordinated strategy to create investments “in place” (e.g.

infrastructure, economic development)

• 54 recommendations to address impediments

Planning for the future

The Minneapolis 2040 Comprehensive plan covers fifteen policy topics:

• Land Use
• Complete Livable and Resilient Communities
• Housing
• Transportation
• Urban Design and Development
• Environmental Systems
• Public Health
• Parks & Open Space
• Heritage Preservation
• Arts and Culture
• Economic Development and Competiveness
• Public Services and Facilities
• Human Capital, Engagement, and Education
• Technology and Innovation
• Governance, Intergovernmental Relations and Partnerships

Go to Minneapolis2040.com for more information

• Minneapolis 2040

Planning for the future

Desired Pilot Outcomes

• Replicable, multi-faceted community health and

well-ness “hubs” that connect a community’s built environment and physical assets with economic, social and human capital strategies for residents.

• Elevated understanding of and investment in

culturally-relevant and community-driven health practices that work in the lowest-income communities with the highest health and social inequities.

• Strong measurement that assembles evidence of

the impact of community development investments on neighborhood health and wellbeing—a shared under-standing for what works and what matters most.

• LISC Health-Community Development Pilot

Questions and Discussion