Subsidized and/or Affordable Housing

[Anondson]

On the term "subsidized" being a misnomer.

http://welcometoplace.tumblr.com/post/1 ... ed-housing

[Anondson]

"Affordable" housing is really expensive to build because we make it expensive.

http://www.twincities.com/localnews/ci_ ... y-endeavor

Very fascinating discussion on the matter. We need to get these cost-magnifiers under control.

[nate]

That article is a little bit all over the place.

The Hamline Station project referenced is only four stories. Two more could have been added while still being stick-built - why did that not happen? That would have at least lowered the per-unit cost. I would guess there were height or parking concerns voiced by neighborhood groups, but do not know for sure.

Multiple financing streams must be difficult to navigate. There should be a way to improve that process.

Are they really suggesting that energy-efficient appliances and code-compliant construction are what is breaking the bank? That seems specious, at best, to me.

I wonder if the quality of contractor is an issue on affordable projects. The Hamline Station project broke ground at the same time as the Vintage on Selby, (IIRC). One is topped off and cladding work is underway, the other is languishing at 2.5 stories. The Western Plaza project has been sitting with its building wrap exposed to the elements for two months now, with no sign of cladding in sight. Down the street, the Capitol offices grew like a weed. Time is money.

Personally I subscribe to the Jacobs opinion that the best long term way to provide affordable housing is to have a consistent growth in housing stock, allowing older buildings to be priced more cheaply. I wish there was more widespread acknowledgement of that idea.

[Anondson]

SLP city council votes to require any development that has city aid to offer affordable housing.

http://sailor.mnsun.com/2015/06/11/resi ... ncil-says/

There was complaint that such a policy would make any building be bigger. Fair point, maybe the best solution is to find ways to get the "missing middle" to get a seat at the development table.

[WHS]

That article is a little bit all over the place.

The Hamline Station project referenced is only four stories. Two more could have been added while still being stick-built - why did that not happen? That would have at least lowered the per-unit cost. I would guess there were height or parking concerns voiced by neighborhood groups, but do not know for sure.

Multiple financing streams must be difficult to navigate. There should be a way to improve that process.

Are they really suggesting that energy-efficient appliances and code-compliant construction are what is breaking the bank? That seems specious, at best, to me.

I wonder if the quality of contractor is an issue on affordable projects. The Hamline Station project broke ground at the same time as the Vintage on Selby, (IIRC). One is topped off and cladding work is underway, the other is languishing at 2.5 stories. The Western Plaza project has been sitting with its building wrap exposed to the elements for two months now, with no sign of cladding in sight. Down the street, the Capitol offices grew like a weed. Time is money.

Personally I subscribe to the Jacobs opinion that the best long term way to provide affordable housing is to have a consistent growth in housing stock, allowing older buildings to be priced more cheaply. I wish there was more widespread acknowledgement of that idea.

The Hamline project is a bit of an outlier, but you'd be hard-pressed to find a subsidized project in Minneapolis or Saint Paul with per-unit costs under 200k.

The heart of the issue is that there are just too many cooks in this kitchen, and a lot of them have an honest-to-god profit motive in the thing -- sometimes even the nonprofits. You've got the developer, the community partner organization, the contractors, the architects, the lawyers, the syndicators, the various for-profit tax credit investors, four or five different government agencies, and on and on... And the way government subsidies work ensures that the people behind a project have a complicated relationship with cost. It's not like a private development, where every dollar spent is a dollar lost. To the extent that project costs can be justified they're frequently eligible for subsidies, and then part of those subsidies end up in the pocket of the people working on the project. So while there is some incentive to lower costs, it's not really the same as purely private development.

One thing you see when you look around the region is that developments with relatively simple institutional backends -- for instance, when the Dakota County CDA just up and builds a project on its own -- end up costing a lot less. But there's a big affordable housing ecosystem in the central cities that the state feels the need to pump full of funding.

[RailBaronYarr]

Wasn't exactly sure where to put this, but here's p2 of a nice little series on housing affordability metrics. http://cityobservatory.org/residual-inc ... rdability/

[Anondson]

I thought of so many threads to post a link to this Letter to the Editor of the Sun Sailor...

"Letter: St. Louis Park affordable housing policy could lead to more urban-style buildings"

http://sailor.mnsun.com/2015/07/24/lett ... buildings/

I just don't even know where to start...

[min-chi-cbus]

That's pretty weak stuff

[mplsjaromir]

So to continue the conversation on affordable housing...some have suggested that there needs to be a radical increase to the amount of attention needs to be paid to affordable housing in Minneapolis. I have a few back of the napkin calculations so that the conversation can move beyond subjective observations.

The Minneapolis Public Housing Authority has an annual budget of around $103 million. Most of the money comes from the Federal government, the city contributes around $300K. The agency recoups about $18.5 million in rent from its tenants. So in its current iteration $84.5 million is needed for its operations and capital improvements. They provide housing for 21,000 people, 10,000 in units that they operate they remaining through Section 8 vouchers.

So for thought experiment the city dramatically upped its contribution to $84,200,000 essentially doubling its budget. Also lets assume that the organizations scales linearly and the amount of people that can be housed to doubled as well. So 20,000 housing units with 42,000 in total receiving direct benefit.

What would it take for the city to fund this? Well according to city budget documents to increase the city's tax levy 84,200,000 the average property owner would see and increase of 154% in property taxes paid to the city. So a typical Minneapolis homeowner pays on average $1259 per year to the city in property taxes ($2928 in total) that number would increase to $1939 per year (in theory $3607 in total). That would make Minneapolis by far the most heavily taxed municipality in the state.

In order for city by itself to double the affordable housing budget the average homeowner would see an increase of $679 per year on their tax bill or $55 bucks a month.

I haven't double checked my math, so please do so if you are inclined.

To me that seems to be political suicide in the near to mid term. I also doubt that would solve the long term problem either.

[mulad]

This post would be dramatically helped with a few links to sources. That strikes me as a low number for property tax revenue, but the only vague number I have in my head is the city's total budget.

How would/could this be affected by property tax sharing / Fiscal Disparities Program across the metro?

How about a tax when building undeveloped (never developed) parcels in the region? It would be a good way to tie this into a sprawl-reduction effort (but it would have to be counterbalanced in some way to avoid encouraging sprawl to get more revenue).

[mplsjaromir]

Link to where I got Minneapolis budget numbers:

http://www.ci.minneapolis.mn.us/www/gro ... 136969.pdf

For general fund numbers I looked at total size ($463m) and the property tax portion (34%).

Link to MPHA

http://www.mphaonline.org/

If anyone has an improved methodology it would great to see.

[Nick]

In the past couple months in conversation I've kind of wondered aloud that, like, if I magically had $10 billion dollars, I could probably think of a way to spend that on mass transit that would make sense and help lots and lots of people and be a great investment for a long time. I don't think I could do that with housing. We're trying to solve too many problems when we think about housing--I mean, what's the underlying issue? Is housing too expensive? Or do people not have enough money? I tend to think it's the latter. What's the solution to that? We can spend $10 billion dollars and build 50,000 public housing units at $200,000 a unit, but that will solve the problem for how long? Five years? You can move any of those variables 50% and you still get the same underlying issue. What are we trying to do here?

[trigonalmayhem]

It seems to me the only long term solutions are to either limit population growth (nope) or stop restricting high density housing construction because neighbors don't like it. Only one of these is really feasible but somehow seemingly reasonable people keep coming up with justifications for stopping it.

[Anondson]

This could go in so many threads...

Edina considering to allow developers to buy out of supplying affordable housing options in luxury developments.

http://www.startribune.com/edina-consid ... 330791281/

The money would go into a fund to provide affordable housing options somewhere else in the city. I can just imagine future fights over the city coming along and wanting to actually spend that pot of money for affordable housing in a neighborhood and the sorts of neighborhood fits over "changing the character", segregating lower incomes all in their corner.

I wonder if this could work out if developments along transit corridors are forbidden from buying out of the requirements for affordable housing, and in fact are allowed/encouraged/commanded to dip into the pot to add affordable housing.

[WHS]

Here's a fun activity related to Edina affordable housing.

Here's a map of the Richfield School District: http://www.mngeo.state.mn.us/maps/Schoo ... sd0280.pdf

Here's a map of the Edina city borders: http://edinamn.gov/edinafiles/files/Abo ... _4Fweb.pdf

Notice anything weird? One guess where Edina tries to put all its multifamily subsidized housing.

[Nick]

Map of the Day please!

[WHS]

Actually, I might be able to get a better version made with all this information on one map (and maybe affordable projects marked too) -- I'll post that if I can.

[MNdible]

You could probably just your camera phone to take a picture of the map right out of one of Myron Orfield's books.

[Anondson]

Much the same on Edina's west border, match up the apartments along 169 with where the Hopkins School District juts into Edina. Hmm.

[WHS]

There's a little bit of horsetrading happening with the eastern border: school districts are funded through a property tax levy, and the northern cutout includes Southdale, so that gives the Richfield a little bit of a financial boost. In exchange, Richfield also takes the southern cutout containing (relatively) lower-income housing, and some subsidized housing.

It's still a bad deal for Richfield, in my opinion, for two reasons. First, extra money doesn't have nearly the impact on school performance as peer effects. For instance, last year, the Edina district spent about $14,990 per student, while the Richfield district spent about $16,775. But no parent in their right mind would choose to send their kids to Richfield instead of Edina -- just to pull a random statistic, the former had a 45 percent proficiency rate in math while the latter had 80 percent. And this has knock-on effects for property values, additional development, etc.

The other thing is, there's nothing stopping Edina from dumping more and more subsidized housing into this little zone. It lets the city avoid one of the most complex problems surrounding subsidized family housing, which is the effect on schools. As I understand it, this has been a source of friction between the cities for quite a while.

I know nothing about the wonky western border, though. I might dig into it tomorrow, see what's up.