Montage (Nye's redevelopment) - 116 E Hennepin Avenue

[EOst]

The 'artist' part of it is a joke if you actually look at the requirements. You can basket weave in your free time or whittle and never sell a single piece of art and still qualify.

I actually know a couple people who live in "artist loft" buildings, including one couple moving into the A Mill. All of them are serious artists (though often working other jobs). Those requirements are set low, but subsequent stages of selection weed out most people who aren't "artist loft" people, with everything that entails. To be quite honest, calling them "affordable housing" in any real sense is so misleading that it seems almost in bad faith.

If you are so very confident in your assertion that building tons of new units will eventually reduce prices, instead of feeding into a feedback loop (desirable neighborhood + new residents and nice building == more desirable), can you name a single neighborhood in the US that proves your point? Even one? I've never had anyone answer this question to my satisfaction, and the most obvious examples (Manhattan-ward fringes of Brooklyn, southern Somerville in MA, Capitol Hill in Seattle, etc.) seem to demonstrate exactly the opposite, i.e. rent increases only accelerating with new development.

[RailBaronYarr]

I'd just like to point out that these bigtime developers moving into the huge tower and six-stick apartment markets (like Lennar) are likely getting similar returns to the rest of their business. In 2013 and 14, net profits after income & taxes at Lennar were 9%. 2012 was a bit higher because they wrote down a boatload of losses. But most large developers, ones either responsible to Wall Street (the horror!) or private owners, aren't getting much better than 6-9% returns on an average project.

These are the same companies who build modest to McMansion-y houses out on whatever land is the latest fringe of the metro. It would stand to reason, then, that smaller developers or individuals might be willing to accept slightly smaller returns (in the 5-6% range) for much cheaper, smaller infill projects. Maybe mid-sized, local developers would re-learn to churn out modest-sized apartments at reasonable rents (not those terrible super wealthy folks). But, since we zone it all out (yes also in existing 'burbs), the big firms build cookie cutter homes and apartments on fallow land at modest ROIs, and have recently realized the shift in urban preference and build towers on select sites.

I don't really think the notion of induced demand from development having nearly (or more) upward effect on area prices as new supply does downward has much to it. None of the research I've read supports that. And yeah, supply isn't *everything* when considering all the other things we need to consider. But that's like saying that since the CPP will likely only prevent 0.1 deg C warming that it's bad policy.

We need to get comfortable with the notion that in desirable neighborhoods (based on centrality, proximity to natural features, transit, etc), new market-rate construction may not ever filter as much as we'd like (though it still does!). And that housing affordable to middle- and modest-income families may have to be further away (from transit, from shops, from the core, whatever). That's fine if we have a strong vision to build public housing and provide vouchers (while requiring all landlords to accept them!) in the hot areas as well and make sure to allocate it to people who need it most.

Bringing this back to Nyes, the tower would have fit in well with the neighborhood but ultimately I agree it wasn't worth the fight with the church nor the risk to a true historic structure. A six story building is better than a parking lot by far, and the net difference in total supply to the neighborhood (when factoring how pro-development NIEBNA has been for other sites and likely will continue to be) is marginal.

[mplsjaromir]

My objective is try and intervene such that people whose hobby it is to actively cheer on high-profile projects like this one might think about using a tad more of their free time to actively cheer on public intervention that would make the housing market more equitable. Sorry if interrupted your "wow this building is tall, hooray!!"//"curse those NIMBYs, don't they want a city?!" mindless, politics-free circle jerk.

This is the best idea affordable housing advocates can imagine? Anonymously antagonizing a small group of people with a idiosyncratic hobby? The affordable housing movement is in more trouble than I could have imagined...

[LakeCharles]

My objective is try and intervene such that people whose hobby it is to actively cheer on high-profile projects like this one might think about using a tad more of their free time to actively cheer on public intervention that would make the housing market more equitable. Sorry if interrupted your "wow this building is tall, hooray!!"//"curse those NIMBYs, don't they want a city?!" mindless, politics-free circle jerk.

But how does stopping (or poo-pooing, or whatever you are doing) the old development help affordable housing get built?

You started with this:

I think this is way better. It's better for the street, more sustainable, more likely (over the long term) to function as a normal building for people outside of the wealthy elite. Whereas the original plan signified exclusivity, intended to be a permanent fortification of wealth and privilege, via its street-dominating height.

and matt replied with this:

How is this new proposal less bourgeois and more accessible? The new one will have less than half the units of the tower proposal. Thus it reasons that, over the long run and across the entire neighborhood, the decision to build less units will cause rents to be higher than they'd otherwise be.

Which I think has merit. How is a smaller luxury building any less exclusive than a larger one? On it's face it seems literally more exclusive, since there are fewer spots to go around. Yes, I agree the street-presence is better, but that is just the sort of "urbanist" argument that you have lambasted here. But I guess I don't get the jump that a small building of luxury condos allows the creation of affordable housing elsewhere in the neighborhood while a tall building of luxury apartments necessarily precludes the building of affordable housing anywhere.

[trigonalmayhem]

The 'artist' part of it is a joke if you actually look at the requirements. You can basket weave in your free time or whittle and never sell a single piece of art and still qualify.

I actually know a couple people who live in "artist loft" buildings, including one couple moving into the A Mill. All of them are serious artists (though often working other jobs). Those requirements are set low, but subsequent stages of selection weed out most people who aren't "artist loft" people, with everything that entails. To be quite honest, calling them "affordable housing" in any real sense is so misleading that it seems almost in bad faith.

If you are so very confident in your assertion that building tons of new units will eventually reduce prices, instead of feeding into a feedback loop (desirable neighborhood + new residents and nice building == more desirable), can you name a single neighborhood in the US that proves your point? Even one? I've never had anyone answer this question to my satisfaction, and the most obvious examples (Manhattan-ward fringes of Brooklyn, southern Somerville in MA, Capitol Hill in Seattle, etc.) seem to demonstrate exactly the opposite, i.e. rent increases only accelerating with new development.

You're focusing on local bubbles and ignoring the fact the places those people flocking to the desirable neighborhood aren't living in will now remain cheaper. It's basically focusing the rent increases in one place instead of spreading them all over the market. I don't think the kind of speculation going on in Somerville is good, but it's directly tied to a future infrastructure investment in the green line extension because Boston has a ton of pent up demand for transit improvements that haven't been met. But that doesn't mean Roxbury or Dorchester are going to magically see the same level of price inflation. In fact theirs is probably slowing down a little (but of course still growing because they have a housing supply issue too).

[EOst]

You're focusing on local bubbles and ignoring the fact the places those people flocking to the desirable neighborhood aren't living in will now remain cheaper. It's basically focusing the rent increases in one place instead of spreading them all over the market. I don't think the kind of speculation going on in Somerville is good, but it's directly tied to a future infrastructure investment in the green line extension because Boston has a ton of pent up demand for transit improvements that haven't been met. But that doesn't mean Roxbury or Dorchester are going to magically see the same level of price inflation. In fact theirs is probably slowing down a little (but of course still growing because they have a housing supply issue too).

But:
1) Modest rent increases everywhere are probably better than massive rent increases in a few places, in terms of potential for displacement, and;
2) You're really just dodging the question; where has there been this kind of "bubble" neighborhood where the massive price increases haven't spilled over to successive neighborhoods? Think the creeping gentrification along Division in Chicago, now all the way out to Logan Square and beyond.

[beige_box]

LakeCharles, it looks like you've only read my very first and very last comments. Basically, after initially being excited to see this project scaled down, I realized that's exactly the reaction developers had hoped for, and that there's no way I'm going to be tricked into cheerleading any of these upscale projects, no matter the scale, so long as displacement concerns aren't front-and-center in a much broader policy discussion. None of these development proposals should be discussed in a vacuum.

[trigonalmayhem]

You're focusing on local bubbles and ignoring the fact the places those people flocking to the desirable neighborhood aren't living in will now remain cheaper. It's basically focusing the rent increases in one place instead of spreading them all over the market. I don't think the kind of speculation going on in Somerville is good, but it's directly tied to a future infrastructure investment in the green line extension because Boston has a ton of pent up demand for transit improvements that haven't been met. But that doesn't mean Roxbury or Dorchester are going to magically see the same level of price inflation. In fact theirs is probably slowing down a little (but of course still growing because they have a housing supply issue too).

But:
1) Modest rent increases everywhere are probably better than massive rent increases in a few places, in terms of potential for displacement, and;
2) You're really just dodging the question; where has there been this kind of "bubble" neighborhood where the massive price increases haven't spilled over to successive neighborhoods? Think the creeping gentrification along Division in Chicago, now all the way out to Logan Square and beyond.

I think a lot of people conflate gentrification with increasing rent because of inadequate housing supply. They're very similar and difficult to tell apart sometimes, but if you have a high local vacancy rate and above average prices it's probably gentrification. If your vacancy rate is below market average it's pretty tough to make a call either way. Pretty much every thriving city in America is a decade or more behind in terms of urban multifamily housing stock. So much of the new housing units have been going to the suburban fringe for so long there's a huge backlog of supply so trying to pretend urban markets are anywhere close to behaving well is silly. You'd need to add tens of thousands of units in most places to get to a point where you might be able to actually do anything about prices and local gentrification. Stopping every large development that might add a couple hundred units is going to make sure we never see that point.

Also for a specific example, the gentrification of downtown and loring park made a hard stop at Stevens square. They fixed up some of those buildings and made them condos but it never happened.

[trigonalmayhem]

LakeCharles, it looks like you've only read my very first and very last comments. Basically, after initially being excited to see this project scaled down, I realized that's exactly the reaction developers had hoped for, and that there's no way I'm going to be tricked into cheerleading any of these upscale projects, no matter the scale, so long as displacement concerns aren't front-and-center in a much broader policy discussion. None of these development proposals should be discussed in a vacuum.

No one is being displaced. It's a parking lot and a crappy bar that wasn't doing enough business to stay open. This is like me using a city council meeting to make a point about whaling. Boo whaling, why isn't the Minneapolis city council solving whaling right now?

[LakeCharles]

I've never had anyone answer this question to my satisfaction, and the most obvious examples (Manhattan-ward fringes of Brooklyn, southern Somerville in MA, Capitol Hill in Seattle, etc.) seem to demonstrate exactly the opposite, i.e. rent increases only accelerating with new development.

I do not have an answer to your question, nor do I know if there is such a case. But I have two thoughts on it. One, it's very tough to know as we have almost no real-world examples of this. In Brooklyn, Capitol Hill and Division in Chicago at least (no idea about Somerville) there actually hasn't been much building at all. Demand has surged, supply has increased a bit, and then it keeps going. A fight is put up for every building. Which is maybe good, maybe bad, I dunno. But it's not exactly a situation where supply went up to meet demand and then demand just kept rising. Moreso that supply eked up a little but nowhere near meeting demand, all while demand kept rising.

Second, I recalled this article from June: http://gothamist.com/2015/06/11/brookly ... orever.php Which basically argues that Brooklyn prices were just depressed and now are rebounding. And they say that rent is high because people can't afford to buy: "What's happened since then is different and, in a city of renters, arguably much worse: A more restricted, much more expensive sales market is forcing high earners to keep on renting, putting upward pressure on rents across the city." Which I know you might dispute, but just a quote anyway.

[mplsjaromir]

I've never had anyone answer this question to my satisfaction, and the most obvious examples (Manhattan-ward fringes of Brooklyn, southern Somerville in MA, Capitol Hill in Seattle, etc.) seem to demonstrate exactly the opposite, i.e. rent increases only accelerating with new development.

Tokyo, Japan, Taipei, Taiwan. Unless Asian cities don't count or something.

[beige_box]

I've never had anyone answer this question to my satisfaction, and the most obvious examples (Manhattan-ward fringes of Brooklyn, southern Somerville in MA, Capitol Hill in Seattle, etc.) seem to demonstrate exactly the opposite, i.e. rent increases only accelerating with new development.

Tokyo, Japan, Taipei, Taiwan. Unless Asian cities don't count or something.

I'm no expert but it seems safe to say that social, political and economic forces are different enough in America that deploying the Williamsburg model on Minneapolis and expecting it to work out like post-war Tokyo (instead of like 2010s Brooklyn) is a bit of a pipe-dream. Do you have any concrete ideas that would help steer Minneapolis in a Tokyo-ward direction that go beyond "take the developers' promises at face value and hope for the best"?

[twincitizen]

If there's a silver lining in this project dropping ~110 units, it's that it makes completion of the 4* other tower proposals in this area more likely, by way of this project not meeting as much demand. I know I'm not alone here in having been skeptical that all 1,000+ units proposed around here would actually get built.

*4 towers = Alatus tower, Mortenson US Bank site, Superior Plating I and Superior Plating II.
Beyond those you've got 700 Central, "Corner Apartments" and probably at least one other unbuilt project in the area I can't think of right now.

Let's all join together and hope every single of those projects is significantly underway in the next 1-3 years.

[mplsjaromir]

I've never had anyone answer this question to my satisfaction, and the most obvious examples (Manhattan-ward fringes of Brooklyn, southern Somerville in MA, Capitol Hill in Seattle, etc.) seem to demonstrate exactly the opposite, i.e. rent increases only accelerating with new development.

Tokyo, Japan, Taipei, Taiwan. Unless Asian cities don't count or something.

I'm no expert but it seems safe to say that social, political and economic forces are different enough in America that deploying the Williamsburg model on Minneapolis and expecting it to work out like post-war Tokyo (instead of like 2010s Brooklyn) is a bit of a pipe-dream. Do you have any concrete ideas that would help steer Minneapolis in a Tokyo-ward direction that go beyond "take the developers' promises at face value and hope for the best"?

My first suggestion would be to not try and save old buildings. Most of Europe and North America put a great premium on old buildings. Saving the building Nye's is in should not be of concern. Don't tear down old buildings and replace them with nothing, but if someone comes around and wants to replace a building that utilizes the land better, let them.

Secondly get rid of exclusionary zoning. Basically go with what Japan does for zoning. It is a simple hierarchical system that discourages non optimal land use.

http://www.mlit.go.jp/common/000234477.pdf

I'm not sure what you mean by the Williamsburg model, but I presume you mean small increases in overall housing stock coupled with sky rocketing demand. That is a bad model, use the Tokyo model of new housing stock increases, roughly corresponding to increases in demand.

It's ironic that you lambaste UrbanMSP users for not challenging the status quo and not moving the conversation to a new paradigm, but when presented with information that contradicts your narrative you reach for the politically impossible crutch.

[trigonalmayhem]

If there's a silver lining in this project dropping ~110 units, it's that it makes completion of the 4* other tower proposals in this area more likely, by way of this project not meeting as much demand. I know I'm not alone here in having been skeptical that all 1,000+ units proposed around here would actually get built.

*4 towers = Alatus tower, Mortenson US Bank site, Superior Plating I and Superior Plating II.
Beyond those you've got 700 Central, "Corner Apartments" and probably at least one other unbuilt project in the area I can't think of right now.

Let's all join together and hope every single of those projects is significantly underway in the next 1-3 years.

I'll drink to that.

[Brenns]

To anyone pointing in the direction of the Artist lofts for affordable housing, I suggest you look at the income requirements - the cap on income for a single person renting a ~$950/mo unit I believe is around 38K. I appreciate this project, but this model is NOT a panacea for any kind of widespread affordable/public housing shortages. It is a niche project that is marginally helpful for a small number of people.

Further, can I just state for the record that this talk of "not trying to save historic buildings" is absolutely terrifying? We are nowhere NEAR the density where this even needs to be considered. Can we agree on having historic and new coexisting peacefully? There are plenty of old, shoddy buildings in this city to tear down and replace and empty lots to fill. China is tearing down ancient villages and constructing high rises for people who don't exist yet in order to keep their economy afloat - not exactly a good example to aspire to.

[FISHMANPET]

The 'artist' part of it is a joke if you actually look at the requirements. You can basket weave in your free time or whittle and never sell a single piece of art and still qualify.

I actually know a couple people who live in "artist loft" buildings, including one couple moving into the A Mill. All of them are serious artists (though often working other jobs). Those requirements are set low, but subsequent stages of selection weed out most people who aren't "artist loft" people, with everything that entails. To be quite honest, calling them "affordable housing" in any real sense is so misleading that it seems almost in bad faith.

If you are so very confident in your assertion that building tons of new units will eventually reduce prices, instead of feeding into a feedback loop (desirable neighborhood + new residents and nice building == more desirable), can you name a single neighborhood in the US that proves your point? Even one? I've never had anyone answer this question to my satisfaction, and the most obvious examples (Manhattan-ward fringes of Brooklyn, southern Somerville in MA, Capitol Hill in Seattle, etc.) seem to demonstrate exactly the opposite, i.e. rent increases only accelerating with new development.

Are we assuming that there is infinite pent up demand for luxury housing in any particular area of this city? Because that's the only way the induced demand theory plays out. If we keep building and building an infinite number of people will appear and the housing will never filter down.

I would say also as a counterpoint to show me an example where supply was restricted and prices did not raise or did not raise very much or even fell without an intense drop in demand (aka Detroit doesn't count). Show me the in demand area that kept rents low by limiting supply.

But anyway here's five examples, one of them Chicago: http://danielkayhertz.com/2015/02/20/wh ... ents-down/
Here's another example, literally right down the street:https://twitter.com/evanrobertsnz/statu ... 8290358273
Houston: http://blog.chron.com/primeproperty/201 ... complexes/
Some Anecodtal information from our very own Nick related the Dinkytown/Como area: https://forum.streets.mn/viewtopic.php?f=20& ... 160#p30347

An interesting thought on spillover and how prevent luxury development in once place can spill over into to others causing displacement: https://twitter.com/jbouie/status/577842254276087808

Also I'll add that I agree that there aren't two firm camps with two distinct ideas, there's a broad spectrum. So let me lay out what I believe. I believe that we need more housing, at any and all levels. I don't think that private developers will exclusively meet that need, and I don't think that public housing can exclusively meet that need. I think we need all of the above. I think the rich are going to do whatever they want. If they want a place they'll outbid you and renovate to be whatever they want. We can't keep the rich out. They're coming for your homes. So let's build them homes, to keep them out of our own. I think that the only possibly feasible long term solution to the problem of housing prices is an increase in supply. I think we're in a sad situation now where we haven't been building enough the last few decades so we have nothing filtering down right now.

Now all that being said, I am concerned with the construction cost of new housing. As Alex says, successful developers are making a modest 9% return. I don't think that's at all unreasonable. If that's all they're making on new development, then we shouldn't be shocked that they're only building luxury, anything else won't pay the bills. So I want housing to be cheaper to build. I'm interested in parking minimums, because structured parking is a significant cost in new apartment construction. I'm interested in technologies that make taller buildings more affordable (going above 6 stories requires moving to steel and concrete construction, which significantly increases the cost of new construction). I'm interested in restrictive zoning and lengthy approval process that ensure that only wealthy developers can take on the risk of new construction. I'm interested in housing being cheaper to build so that profit can be made building more affordable housing (as long as it's still safe, I'm not going to advocate throwing out building codes). I'm interested in making easy for small local developers to build small projects in their communities.

To summarize, I think we need more housing built by a variety of parties (large national developers, local residents, governments, non-profits, etc) to keep prices affordable for all.

[trigonalmayhem]

Those income to rent figures are straight out of the section 42 rule book (so to speak). The income cap is a percentage of area median income and the amount they're allowed to charge in rent is a percentage of that income cap. It may not seem like a particularly good deal to you but it's the standard for subsidized middle income housing. The particular numbers maybe need revising but they weren't arrived at randomly. They're also limited in how much they're allowed to hike your rent year over year and have to reverify your income every year so if you get a better job and can afford more you don't get to keep that affordable unit to yourself and it goes back on the market for someone else in need.

Source: I lived in section 42 housing for several years.

[trigonalmayhem]

And I just want to add that Peter summed up exactly how I feel without all my vitriol and abrasiveness.

[mplsjaromir]

To anyone pointing in the direction of the Artist lofts for affordable housing, I suggest you look at the income requirements - the cap on income for a single person renting a ~$950/mo unit I believe is around 38K. I appreciate this project, but this model is NOT a panacea for any kind of widespread affordable/public housing shortages. It is a niche project that is marginally helpful for a small number of people.

Further, can I just state for the record that this talk of "not trying to save historic buildings" is absolutely terrifying? We are nowhere NEAR the density where this even needs to be considered. Can we agree on having historic and new coexisting peacefully? There are plenty of old, shoddy buildings in this city to tear down and replace and empty lots to fill. China is tearing down ancient villages and constructing high rises for people who don't exist yet in order to keep their economy afloat - not exactly a good example to aspire to.

What density is it okay to replace buildings? It's almost impossible in Manhattan and Paris to replace buildings, so I think your answer is likely ∞ per sq/km

Americans for whatever reason think they have some type of moral authority over the Chinese. As if the United States isn't some violent, brutal, commandeering, history erasing, polluting hegemonic state.