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Needed: A balanced approach to affordable housing

There need not be a conflict between the development of affordable housing in the suburbs and the placement of those projects in our core neighborhoods.

In his March 5 article, MinnPost’s Peter Callaghan previews a report, prepared by the University of Minnesota’s Institute on Metropolitan Opportunity, that examines segregated living patterns in the Twin Cities. The report, entitled “Why Are the Twin Cities So Segregated?” [PDF], compares patterns here with those in Denver and Portland and concludes that our area is considerably more segregated than the metropolitan regions encompassing those two western cities.

Jim Roth

The institute’s director, Myron Orfield, the report’s lead author, places the blame for the Twin Cities poor showing, at least in part, on public policies which he says concentrate affordable housing in the region’s central cities and certain first ring suburbs

Orfield calls for a more sustained effort to disperse affordable housing throughout the metropolitan region. As an association of nonprofit organizations, the Metropolitan Consortium of Community Developers is in full agreement with him on the need for more affordable housing in the suburbs. However, we part company with him when he objects to the placement of these developments in our inner-city neighborhoods.

Revitalizing challenged neighborhoods

Over the years, affordable housing has been stigmatized by the image of massive deteriorating public housing blocks. But our members are not building that type of housing. Their architecturally enhanced low-rise buildings look no different from nearby market-rate developments. They provide work-force housing for a mix of incomes on sites that have easy access to public transportation, employment and community services. Most important, they help revitalize challenged neighborhoods by replacing blighted properties with attractive, well-designed housing that helps build confidence in the neighborhoods in which they are located.

Hope Community’s South Quarter Development is a good case in point. This 20-year-long effort has transformed an abandoned intersection that once cast a shadow of blight and crime over the surrounding neighborhood. Today, the South Quarter provides a welcoming gateway to the Phillips community. The final phase of the South Quarter is now under construction on the northwest corner of Franklin and Portland. Known as the Rose, it will provide 90 units of mixed-income housing just minutes away from downtown Minneapolis, this region’s major employment center.

Needless conflict over suburbs, core cities

Across town, in North Minneapolis, the West Broadway Crescent will provide 54 units of mixed-income housing for families with incomes up to 60 percent of area median. This work-force development is just a few blocks away from another key jobs site, North Memorial Hospital. West Broadway Crescent will not lead to a concentration of poverty in North Minneapolis. Rather, it will attract families with diverse incomes to the Near North Community. This work-force development will bring new residents with incomes in the $40,000 to $50,000 range to a community where the median income is now $32,000 a year.

For too long, a controversy has raged in the Twin Cities, pitting the housing needs of the central cities against those in the region’s outlying communities. But there need not be a conflict between the development of affordable housing in the suburbs and the placement of those projects in our core neighborhoods. We can and should provide both. In fact, we need a balanced approach to affordable housing that maximizes housing opportunities throughout our seven-county region. That balanced approach represents the best way forward for this metropolitan region. 

Jim Roth is the Executive Director of the Metropolitan Consortium of Community Developers.

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Comments (7)

  1. Submitted by Monica Millsap on 03/24/2015 - 10:22 am.

    “[W]e need a balanced approach to affordable housing that maximizes housing opportunities throughout our seven-county region.” That couldn’t be more true. And I wish that when we looked at central cities, we would also consider what a balance of affordable housing means. Much of the focus of building affordable housing focuses on central city neighborhoods that already are affordable. Yet, many neighborhoods within the central cities continue to be out of reach for low and middle class families. Neighborhoods like Macalester Groveland and Highland Park in Saint Paul have a great need for affordable housing both for low and middle class families and students.

    • Submitted by Dennis Tester on 03/24/2015 - 11:01 am.

      Affordable

      All the houses in Macalester Groveland and Highland Park are affordable by someone or they wouldn’t be occupied. What you’re referring to is government-subsidized housing.

      • Submitted by Monica Millsap on 03/24/2015 - 01:35 pm.

        You may think that government subsidized housing is the only way to create housing that is affordable to lower incomes. I’m looking at it more from a perspective of government interference with the market. I would like to believe that if we let the market build where the demand is, and allow the market to create a larger housing supply, then housing would likely be cheaper overall, thus affordable to a larger share of home buyers or apartment renters. City governments create restrictions on the market through ordinances that dictate usage of current housing stock (like can a student rent it or not), ordinances that dictate what a property owner can do (like tear down and re-build a different type of housing or use of accessory dwelling units), or dictate through subsidies where they want developers to build. If the city government is already going to interfere that much, then they might as well spread out the housing supplies throughout the city. If the market were to build where there was demand, they would instead likely build in places like Highland Park or Mac-Groveland, and naturally lower housing costs through increased supply. It is also possible that some developers might choose to develop in areas with less demand and build up an area (outside of a great deal of government subsidies or governmental developer contracts). An example of this would be Mai Village buying their business years ago, which opened up the area to investments from other entrepreneurs, who invested not just in business development but buying housing in the neighborhood, allowing Frogtown to grow.

        • Submitted by Dennis Tester on 03/24/2015 - 03:50 pm.

          As a property owner

          in Mac-Groveland, I’m not interested in the housing stock in the neighborhood being cheaper, driving my property value down. I want my investment to increase in value, not decrease, which the “affordable housing” folks don’t seem to understand.

          • Submitted by Rose Teng on 03/25/2015 - 09:43 am.

            Affordable Housing Driving Down Property Values is a Myth

            A long standing myth has been that affordable housing drives down property values in a neighborhood, but many research studies have concluded that this is not the case. When we are discussing quality affordable housing, like the type built by non-profit community developers, studies from cities across the nation, including NYC, Portland, and Seattle, have found that these types of developments (such as those built using federal Low Income Housing Tax Credits) have resulted in an increase in market prices of nearby homes in surrounding neighborhoods. This report is on the older side but includes research completed right here in Minneapolis and talks about the benefits of affordable housing developments–one of which is that property values go UP rather than down. http://www.cura.umn.edu/publications/catalog/h1016

          • Submitted by Monica Millsap on 03/31/2015 - 07:57 am.

            Well, I myself am a property owner too. I, too, would like to see rising property values. But, I have yet to find government regulation helpful in my property values, but I hope the government continues to help you in Mac Groveland.

  2. Submitted by Jim Gabler on 03/30/2015 - 04:38 pm.

    Affordable Housing Explained Relative To Market Housing

    All levels of government, depending on their adopted policies, “interfere” in every form of commerce and housing is no exception. Sometimes it’s misguided and sometimes it is not.The central issue is the degree, amount, implementation and effectiveness of those policies. The basics of housing, both affordable and so-called market-rate, are pretty straightforward, however most folks aren’t aware of them:

    1. All housing is subsidized in one or two ways: a) Directly (by cash appropriations); or b) Indirectly (by tax code deductions, credits, etc.); or both.

    2. The last time I saw numbers on this, roughly 80% of all housing subsidies go to market-rate housing and about 20% to affordable housing. This is because almost all indirect subsidies (which are in a far greater amount and much more politically expedient to argue for) go to market-rate housing, i.e. mortgage interest deductions, capital gains exemptions upon sale (up to $500,000 for a married couple), homestead real estate tax breaks, etc.

    3. Affordable housing can extend to a wide variety of incomes – everything from 0% (say, homeless) to about 115% of the Area median income – and populations, including seniors, chronic inebriates, employer-sponsored workforce housing, homeless, youth, homeless adult singles and homeless families, the physically and mentally handicapped, and simply normal families who are income eligible, but need help. Most of us are familiar with Public Housing, but there are many more types of affordable housing now in existence with many different levels of affordability. Historically, Public Housing (of which, incidentally, both Mpls. and St. Paul have 2 of the top in the Nation) was the first and only affordable government housing program for years until the ’60’s. Now it’s still a critical component of affordable housing, but making up much, much less of the total affordable units.

    4. Beginning in the 1980’s, the major affordable housing programs got gutted and and so the Federal financial programs are now more numerous, but smaller, much underfunded, fractured. and very difficult to work with.

    5. Myron Orfield, in his arguments about the need for better dispersal of affordable housing, has ;provided a marvelous opportunity to discuss many of our failings. He is correct on many issues, makes critical points on school districts, etc. and, however, is not so correct on others, especially the role of non-profit housing providers and non-profit community developers.

    But I believe the central point Myron misses is the role of Federal programs in housing and how we’ve now had to deal with many years of dysfunction and under-funding, their regulations and delivery.Simply put, if we had the old Project-Based Section 8 Program and only allowed 20% of (most, not so much in smaller, homeless, or special needs situations) an apartment’s units to be eligible for that program, the Metro Area would be in much better shape. Myron admitted as much in part of his report, I believe, likely without fully understanding the background of the funding programs, when he discussed how the Met Council and everyone succeeded in dispersing affordable housing better in the late ’70’s. Well, surprise, we then had a central Federal affordable housing program that worked.

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