Central Minnesota's housing squeeze

A discussion about possible solutions to central Minnesota's lack of affordable housing

Does anyone have a sense that housing affordability is more of a problem in some parts of central Minnesota than others? Brainerd? Todd County? Cass County?

by Dave Peters, MPR News 4/5/2012 4:59:38 PM
@ Dave re: private sector loans. I agree with Rick. The private sector is absolutley a player in affordable housing. We partner with private lenders in our guaranteed loan program. The lender makes the loan, we provide a guarantee. Our volume of guaranteed loans is up 40% compared to this point last year.

by Deborah Parker, USDA 4/5/2012 5:00:08 PM
CMHP partners with for profit developers to create affordable housing throughout our region. So, there are some private sector people that see the need and want to participate.

by Deanna Hemmesch, CMHP 4/5/2012 5:00:43 PM
Why do private lenders need help/guarantees?

by Dave Peters, MPR News 4/5/2012 5:01:50 PM
@ Dave. We have two properties in Baxter areas and we have a waiting list for those units.

by Deanna Hemmesch, CMHP 4/5/2012 5:02:02 PM
@Dave - When I look at the RD rental portfolio in the region, Todd county is an outlier. Higher vacancies & less subsidy. It makes me think that the market-rate rents are already pretty low.

by Deborah Parker, USDA 4/5/2012 5:02:32 PM
@Deanna -- Can you say more about the people who are on those waiting lists? Are we talking about older people, young single parents, who's in need?

by Dave Peters, MPR News 4/5/2012 5:03:31 PM
On the other hand Todd county is one of the poorest counties in MN. So, they need the additional subsidy and low rents to afford to rent the properties.

by Deanna Hemmesch, CMHP 4/5/2012 5:03:51 PM
@Deanna, indeed, Wadena County also has lower average housing costs but much higher poverty, so overall are still one of the worst for "affordable" housing.

by Pam M 4/5/2012 5:05:29 PM
@ Dave. We have a variety of people on the waiting list. Many of them are young families that need a 2 or 3 bedroom unit. Many are at that 50% area median income level.

by Deanna Hemmesch, CMHP 4/5/2012 5:05:41 PM
@Pam. Our vacancy rates in Wadena county are very low. there's demand there.

by Deborah Parker, USDA 4/5/2012 5:06:51 PM
Overall in Region 5, about 75 percent of renters receive either HUD Section 8 subsidy or RD Rental Assistance.

by Deborah Parker, USDA 4/5/2012 5:07:38 PM
One thing that interests me is people's changing expectations. We've been talking about money and vacancy rates. How big a factor is something like multi-generational living? Do we simply need to think differently about where the elderly live or where young adults live? Do families have a bigger obligation than we've thought?

by Dave Peters, MPR News 4/5/2012 5:08:18 PM
I should have said 75 percent of renters in RD-financed properties receive either a HUD or RD subsidy.

by Deborah Parker, USDA 4/5/2012 5:08:26 PM
Similarly, are expectations about owning vs renting changing the equation?

by Dave Peters, MPR News 4/5/2012 5:10:13 PM
We recently did a point in time count of unsheltered homeless in 14 counties in greater MN. One of the things that we found interesting is that the number of families doubled up (parents moving in with children or vise versa) due to foreclosures has doubled since last years count.

by Deanna Hemmesch, CMHP 4/5/2012 5:10:40 PM
@Deanna -- Interesting. So essentially family becomes the source of subsidy. I guess the question then becomes whether that's a good thing or a bad thing?

by Dave Peters, MPR News 4/5/2012 5:12:51 PM
@ Dave. One thing I've learned is that there is no single solution to providing sufficient affordable housing. Communities need to look in many directions -- families, in-home support services, etc.

by Deborah Parker, USDA 4/5/2012 5:12:54 PM
@ Dave. I think many people were very nervous about purchasing a house after the foreclosure issues. We had some low vacancy rates. However, we also provide a first time homebuyer class and we are starting to see a few more people attending those classes to get more information prior to purchasing.

by Deanna Hemmesch, CMHP 4/5/2012 5:13:10 PM
@ Dave & Deanna - we've certainly seen an uptick in home loans for which we provide a guarantee. These borrowers are closer to the moderate income level. I think the debate on rent vs. buy is most applicable to our lowest income residents.

by Deborah Parker, USDA 4/5/2012 5:15:23 PM
@Deb. The point about many solutions is a good one, I think. Who's in the best position to lead the way and find the solutions that are appropriate? Local elected officials? Non-profits? You folks at the federal level?

by Dave Peters, MPR News 4/5/2012 5:15:26 PM
@Dave. I would say it is good that family and friends have resources to fall back on as long as the relationships stay in strong. If they do not, the family gets kicked out and then where to they go if they don't have the credit history to rent or purchase another house.

by Deanna Hemmesch, CMHP 4/5/2012 5:15:57 PM
@Deb, I'm a little confused on the lending scenario, in the past USDA told me as the contractor to finance the land & construction, as USDA won't guarantee the loan/homebuyer, lenders I presented the USDA housing project to weren't comfortable floating a construction loan that USDA MAY NOT finalize/close homeowner after completion. Was this just a bump that you've worked out of the system?

by Alex Hering, Cygnet Mina... 4/5/2012 5:16:47 PM
@Dave. We at the federal level provide support. I think local governments, nonprofits, and community members need to drive the conversation on need & solutions.

by Deborah Parker, USDA 4/5/2012 5:16:51 PM
@Dave. Non-profits can play a lead role in this but their efforts need to be supported by local and state government.

by Deanna Hemmesch, CMHP 4/5/2012 5:17:55 PM
@Alex. I'm a little fuzzy on new construction vs. purchase of an existing home. If you contact me later, maybe I can get you more specific answers.

by Deborah Parker, USDA 4/5/2012 5:18:14 PM
@Dave & Deanna - what I love about the Region 5 work being done is that many different voices in the area are speaking up.

by Deborah Parker, USDA 4/5/2012 5:19:31 PM
@Deb. Moreso than elsewhere? Have any idea why that is?

by Dave Peters, MPR News 4/5/2012 5:20:22 PM
@Deborah Parker, USDA Thanks Deb.

by Alex Hering, Cygnet Mina... 4/5/2012 5:20:32 PM
@Deb. I agree. Having so many different people at the table does make it a very comprehensive planning process. Region 5's work on this is superb to other rural communities that are doing the same type of planning.

by Deanna Hemmesch, CMHP 4/5/2012 5:22:24 PM
@Dave. Yes, region 5 is incredibly active relative to other regions in the state in terms of planning. Their use of the HUD grant for this purpose is commendable.

by Deborah Parker, USDA 4/5/2012 5:22:37 PM
@Deb and @Deanna -- Given those last comments, I can imagine the answer to this, but as we wrap up the hour, are you optimistic or pessimistic? And if you say optimistic, my question is: really? in this economy?

by Dave Peters, MPR News 4/5/2012 5:24:12 PM
@Dave & Deanna. The long-term planning and understanding of the region's vision for itself is really important. But from our perspective at USDA -- we have some pretty immediate needs to talk specifics about preservation.

by Deborah Parker, USDA 4/5/2012 5:24:16 PM
Well, I'm pessimistic about availability of funding. I'm optimistic about communities & partners being revved up to work together.

by Deborah Parker, USDA 4/5/2012 5:25:40 PM
@Dave. I am going to say optimistic even in this economy. They are looking at ALL of the issues within the region and coming up with a plan that can be implemented with hard work and partnerships. New partnerships have already been created to help offset the costs of some development and rehabilitation projects. I hope the funding will also open more doors to federal funding.

by Deanna Hemmesch, CMHP 4/5/2012 5:26:44 PM
Good answers, both. With that, I'll draw the conversation to a close. Thanks, Deb and Deanna, for turning into our "guests" for this chat. Thanks, too, to those who were tuned in. I think we've at least sketched an outline of the question in central Minnesota.

by Dave Peters, MPR News 4/5/2012 5:29:35 PM
Thank you.

by Deanna Hemmesch, CMHP 4/5/2012 5:30:12 PM
To get broad support, the dialogue must move onward from needs/gaps/solutions and do a better job of communicating the value of affordable/work force/subsidized housing in communities. It must be perceived as not only the right thing to do but also the smart thing to do from an economic development standpoint.

by Rick Podvin 4/5/2012 5:30:59 PM
We'll keep this conversation archived on the Ground Level site. Just go to the "Central Minnesota: 2035" topic page at minnesota.publicradio.org

by Dave Peters, MPR News edited by Michael Olson, MPR News 4/5/2012 5:32:43 PM