Hi everyone. Thanks for joining. We will get going here at 11:30a. Right now, weigh-in on our first poll question and introduce yourself by submitting a comment.
Welcome to a conversation this morning on affordable housing central Minnesota. Ground Level is happy to host this in conjunction with the “Resilient Region” project involving a number of agencies and hundreds of residents trying to develop a plan for the future in Crow Wing, Cass, Wadena, Todd and Morrison counties.
From USDA's perspective, preservation of existing affordable housing is of paramount importance. Owners that use USDA financing are subject to restrictions that spell out how long the building must be maintained as affordable housing – sometimes 20 years, sometimes for the life of the loan. We have 45 properties (838 apartments) in Region 5. About 45% are—or soon will be—free of those restrictions and at risk of going to market-rate rents. Finding funds for rehab & other physical maintenance is also a problem. It’s important that we get community input on which buildings are a priority to preserve as affordable housing.
I’m Dave Peters, and I direct MPR News’ Ground Level project exploring community issues in Minnesota. Helping direct traffic is Michael Olson, the brains behind the increasing number of these chats that MPR is doing.
Hi everyone. I’m Michael Olson, editor of Minnesota Today from MPR News. Thanks for joining the chat. A point on chat etiquette.
If you are asking a question, or directing a comment to someone specific place a “@” before their name. Example: “@Deanna how many affordable housing units are needed in central Minnesota?”
Deb, thanks for starting things going. Just by way of introduction, Deb Parker is deputy state director for the U.S. Department of Agriculture’s Minnesota rural development office. Welcome, Deb.
I should have introduced myself first! I'm Deb Parker, Deputy State Director of USDA Rural Development in Minnesota. Our agency provides funding for affordable housing apartment buildings, and we also make direct and guaranteed loans for low to moderate income homeowners.
Also joining us is Deanna Hemmesch, community development director for the Central Minnesota Housing Partnership based in St. Cloud. Welcome Deanna.
No problem, Deb. We're nothing if not informal here.
Let me ask you both, Deb and Deanna, to start by giving a sense of significance to this. How do you know this is a problem that needs attention in central Minnesota?
@ Michael and Dave. There are many different needs for affordable housing for Single Family as well as Multifamily. In many of our affordable rentals we have a waiting list of people wanting to rent an affordable apartment. Others need down payment assistance to assist them getting into the housing.
@Dave & Michael. USDA has one of the largest portfolios of affordable rental housing in Minnesota. We have 45 properties in region five, with 838 apartments. Loss of these units would have a substantial impact on the region.
So there seems to be demand when these units are available. What about measures of how much people spend on housing? How many people are spending more than 30 percent of their income on housing?
@Michael. Unfortunately, Congress has cut funding for our Direct loan program that would serve the lowest income buyers. The region needs other funders to support homeownership.
@Deb -- What are the possibilities there? Are we talking about local government? Nonprofits? Private companies?
By the way, any of the people tuned in, feel welcome to ask or comment anytime.
Funding for development and preservation of affordable housing has been cut and is very competative. As for how many people pay more than 30% of their income - I do not have statistics on that at this time.
@Dave - anybody and everybody, Dave. Organizations like CMHP, local lenders
I think the U of M had numbers that said 45 percent of low-income people were paying more than 30 percent of their income. That sound right?
@ Dave, I would say that sounds correct. The number is a lot higher than we would like to see.
@Dave. That sounds about right. There is real debate about how to allocate resources to serve this population -- new units or homeownership opportunities vs. preservation of exisitng rental properties & keeping our low income borrowers in their homes.
@Deb - Interesting. I think the U of M also said as many as one out of three housing units in central Minnesota is vacant. Does that point to a solution or is there too much fixing up that needs to be done?
From what we're hearing in our regional housing dialogues (held with MN Housing Finance Agency and Greater Minnesota Housing Fund), preservation of existing, affordable rental properties is a huge concern.
@Dave - Average vacancy rates mask community by community variations. Among our portfolio in Region 5, the vacancy rate is 7%.
I agree with Deb. Because resources are becoming more limited it is hard to determine which should be the priority, creating new affordable units or preserving existing.
Is one or the other less expensive? Do those two alternatives target different groups of people?
Initial poll feedback leans towards "No" on additional government spending on affordable housing. For those of you who say "No" it would be great to hear why you feel that way.
@Deanna. USDA & other funders in Greater Minnesta are working on building a common understanding of the factors that would make a property a preservation priority. This includes things like financial viability -- low vacancy rates indicate good demand. How many units are in the building, and how many have 2 or more bedrooms? 2 BR units are in greater demand.
Preservation in my opinion (especially RD 515 projects) is very needed because they serve the very low income households and provide rental assistance (in most cases). new construction may be more expensive - but increases the number of needed units.
@Pam thanks for joining. How difficult was it to get a loan for your project?
Is Pam's solution one that could be make to work for more people?
@Pam. I think for a lot of reasons, preservation & rehab of current housing stock is key. In some cases, it's less expensive to tear down old housing and build new in its place.
@Pam and Dave. What we at USDA need is input from individual communities. Where is preservation important? Where does demand exceed available units or homes available?
So, if I am a community leader and know there are some fixer uppers in my town, can I come to USDA and get help fixing them up?
@ Deanna. At USDA, we are trying to figure out where our subsidized rental units are NOT needed because market rents in the are are very low. If we let those properties "age out" of our program, we would have resources to devote to communities in greater need.
Rick Podvin commented on the Ground Level page: "The private sector will be part of the solution if they can see a way to make an honest dollar while making housing as affordable as the fair market allows." Can that be made to work?
@ Dave re: fixer-upper. We do have home repair loans, mostly availabe to very low income seniors & home conditions that needs of a health and safety nature. Other organizations have funds available that may be more flexible.
@ Deb, That would be good to have additional resources available to properties within region 5..