Tuesday, May 15, 2018

More Section 8 Housing For Somalis Proposed

After his talk at Cedar Riverside, with City Council member Abdi Warsame, who represents the Somali community, and just announced a new ordinance to expand housing for his low-income renters, Minneapolis Mayor Jacob Frey suddenly wants to increase the budget for affordable housing to $50 million, a nearly 500% increase. He says Minneapolis has lost 15,000 affordable units since 2000, pricing low-income families out of the city. How have they been lost? Right now, the city of Minneapolis spends about $11 million to $13 million a year on affordable housing. But in 2019, Mayor Jacob Frey hopes to boost that number to $50 million, a increase of almost 5X. Hmm. I wonder if Jacob is being pressured by certain groups in Minneapolis to provide them with significantly more subsidized housing. Thoughts?
Here are the highlights of his plan (could somebody tell me what this means in English and what these plans will do to improve Minneapolis?):
1) Put a greater focus on production of units that are accessible to renters earning <30% AMI.* This means units that rent from $495 for an efficiency to $820 for a 4-bedroom unit. Those figures INCLUDE utilities.
2) When focusing on development for low-income renters, it is important to consider who is low income. In Minneapolis, people earning <50% AMI are more likely to be people of color. This strategy will help reduce racial disparities in housing.
3) Maximize market growth through inclusionary zoning with TIF and/or other City incentives.
4) Calibrate to market conditions to continue to promote growth and development.
5) Consider phasing and/or geographic targeting.
6) Provide rental subsidies to renters earning <30% AMI or developers in exchange for longer affordability.
7) The City of Minneapolis could partner with the Minneapolis Public Housing Authority or nonprofit partners who already have the program model and infrastructure to administer rent subsidy programs.
8) Pilot project for direct subsidy to renter in the Promise Zone to support the success of school children.
9) Provide incentives for current owners of naturally occurring affordable housing (NAOH) to preserve affordability.
10) Create a rental rehab program for small scale properties (<20 units).
11) Increase funds for a NOAH acquisition fund.
12) Support acquisitions by land bank, mission driven housing providers, and public agencies (such as MPHA)
13) Emphasize the renter-focused function of Regulatory Services.
14) Hire more housing inspectors.
15) Establish Tenant Remedy Act or Rent Escrow Actions—appointment of administrators and/or withholding of rent for repairs.
16) Improve/reform tenant rental screening.
17) Support master leases by nonprofit partners to provide housing to people with high barriers.
18) Increase ability to expunge unlawful detainers (evictions) from people’s record when renters were evicted without cause.
19) Prevent displacement from eviction or after sale of property.
20) More funding for legal representation for those facing eviction.
21) Establish “notice to quit” rules that require landlords to provide notice to tenants.
22) Work with the County to reform emergency assistance.
23) Explore just cause eviction regulations.
24) Explore requirements for a notice of sale, plus 90 day tenant protections.
25) Double or triple vacant City lot development.
26) Work with Hennepin County to also leverage tax forfeited property.
27) Enhance down payment assistance.
28) Increasing assistance amount to $10,000 per household at <80% AMI.
29) Improving process so that buyers can have a letter of commitment for funds prior to executing a purchase agreement.
30) Increase education/wrap-around services through nonprofit partners. •
31) A 4-plex homeownership program.
32) The production of senior units that will give people options to move out of their single-family homes, thus freeing up houses for larger families.
*Who qualifies for affordable housing?
For 2018, the affordability limit is 80% of the area median income for both rental and ownership housing. In 2018, the area median income (AMI) for a household of four is $94,300. Under these limits, a family of four can earn up to $71,900 to qualify for affordable housing. To implement the Livable Communities Act in 2018, the Council will use the following amounts as the upper limits for affordable rental and ownership housing.
Rental housing.
Rents include tenant-paid utilities.
2018 Rental Housing
# Bedrooms 30% AMI 50% AMI 60% AMI 80% AMI
Efficiency $495 $826 $991 $1,321
1 Bedroom $531 $885 $1,062 $1,416
2 Bedrooms $636 $1,061 $1,273 $1,697
3 Bedrooms $735 $1,226 $1,471 $1,961
4 Bedroom $820 $1,367 $1,640 $2,187
Ownership housing
For owner-occupied housing, the income limit includes principal, interest, property taxes and home insurance.
Assumptions include:
Fixed-interest, 30-year home loan
Interest rate of 5.125%
A 29% housing debt-to-household income ratio
A 3.5% down payment
A property tax rate of 1.25% of the property sales price
Mortgage insurance at 0.85% of unpaid principal
$100/month for hazard insurance
2018 Home Ownership
Household Income Affordable Home Price
80% AMI ($68,000) $236,000
60% AMI ($54,240) $185,000
50% AMI ($45,200) $151,500
30% AMI ($27,100) $85,000
Frey can’t yet guarantee that his budget proposal will include the $50 million to fund all these projects. He will also have to work with the 13 members of City Council to put these plans into action. The City Council is the body that passes these policies.

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