CITY OF MINNEAPOLIS CPED Approaches & Initiatives for Affordable Housing Public Health Advisory Committee July 25, 2017
Agenda • Housing trends and policy implications • Affordable housing resources • Project examples • City housing strategies • Discussion
Minneapolis Population Total Population for Minneapolis, 1920-2010; Projected Population for Minneapolis, 2020-2040 600,000 Historical High: 521,718 500,000 400,000 300,000 200,000 100,000 0 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 Source: U.S. Census Bureau, Metropolitan Council
Population by Race • The city’s population of Color has grown at a faster rate than the population as a whole • In 1990, around 2 in 10 residents indicated a race other than White, non- Hispanic. As of 2010 this number had increased to 4 in 10, and is projected to grow Total Population and Population of Color, Minneapolis 2000 - 2010 382,618 382,578 368,383 Total population Of Color 143,538 151,928 82,974 1990 2000 2010 Source: U.S. Census Bureau, Decennial Census
Minneapolis and Regional Demographics Minneapolis Region Population 412,517 3,005,419 Median Household Income $50,767 $85,800 % of households at or below poverty 22.6% 11.1% Minneapolis Twin Cities White, non- White, non- 24.8% 39.0% Latino Latino People of color People of color 61.0% 75.2% 5
Household Income Household income in Minneapolis is slightly down from 2000, and unchanged from 2005-2009 • Since 2005-2009, Asian and White non-Hispanic households saw statistically significant increases • in income Income for Black households saw real decreases of nearly 20% across the two five-year time • periods Median Household Income for Selected Racial Groups Minneapolis 2000-2014 (2014 inflation-adjusted dollars) $62,230 $58,058 $52,205 $50,767 MPLS $44,469 $43,194 Black or African American $34,834 American Indian $36,022 Asian $34,828 White NH $30,890 $21,847 Hispanic $19,500 2000 2005-2009 2010-2014 Source: U.S. Census Bureau, American Community Survey 5-year estimates
Shifts in Owner/Renter Status • Across 1970-1990, renters represented a slight majority of occupied housing units • Across 2000-2009, owners represented the majority of occupied housing units, reversing a decades-long trend • Renter occupied units have had the larger share since 2010, and renter households are growing faster than owner households Tenure (Owner/Renter Status) for Minneapolis, 2000-2014 52.3% 88,529 82,579 83,408 78,944 80,777 47.4% 74,047 2000 2007 2014 Owner HH Renter HH Source: U.S. Census Bureau, American Community Survey 1-year estimates
Homeownership Gap 75.6% 59.3% Share of White, non-Latino households who own their home 37.8% 37.8% Share of households of color who 35.6% own their own home Homeonership Gap 23.7% 180% likelihood of a white applicant being approved for a mortgage compared with a person of color Minneapolis Twin Cities 8
Changes in Household Incomes and Costs • Owner households as a group are largely better off than in 2000, with increasing incomes and stabilized housing costs • Compared with those who were renting in 2000, today’s renters face reduced incomes and increasing rents % Change in Median Income and Median Housing Costs by Owner/Renter Status, Minneapolis, 2000 - 2014 11% 11% 0% Income Housing Costs -14% Owner Renter Source: U.S. Census Bureau, American Community Survey 1-year estimates
Cost Burdened Households • A household is: • Cost burdened if 30% or more of household income is spent on housing. • Severely cost burdened if 50% or more of household income is spent on housing. • 37% of all MPLS households are cost-burdened • Renters represented about 3 out of 4 cost burdened and severely cost burdened households • 74% of today’s MPLS renters at 50% of AMI are cost- burdened • up from 64% in 2000. Source: U.S. Census Bureau, American Community Survey 1-year estimates
Affordability of Housing Units Share of Housing Stock (Owner & Renter) Affordable at 50% of AMI 50% of AMI for a Unaffordable at About 168,700 total housing units About 171,660 total housing units family of four was 50% of AMI $45,300 in 2015 Affordable at 50% 62% 50% of AMI Decreased 50% 38% affordability 2000 2009-2013 • Despite the City producing or preserving 8,900 housing units affordable at 50% of AMI, units affordable at that income level have decreased dramatically. • There were around 8,000 fewer rental units affordable at 50% of AMI across 2009-2013 compared with 2000. • Met Council estimates that by 2014 this loss grew to 11,500 rentals affordable at 50% of AMI. Source: U.S. Census Bureau/HUD; Comprehensive Housing Affordability Strategy 2009-2013 5-year estimates, Metropolitan Council Housing Affordability Estimates, 2014
Vacancy Rate by Rent and Average Rent in Twin Cities Region 12
Tightening Rental Market • Average per-unit sales price increased 56% compared with 2006-2010 in the Twin Cities • $88,000 per unit in 2015 • Average rent has increased 5% in the Twin Cities • 2009: $1,002 (2015 dollars) • 2015: $1,046 • Median Twin Cities renter can afford around $910 per month • Median MPLS renter can afford around $765 per month • In Minneapolis alone, there were 355 apartment property sales that included 10,512 units from 2010 to 2015 • 40% of all metro • 57% of rental units sold are in racially diverse areas • 47% of rental units sold were located in moderate income areas Sources: MN Housing Partnership analysis of Marquette Advisors Rent and Vacancy Data; Costar Multifamily Property Sales Data; American Community Survey 5-year Estimates
Average Home Prices • Income level directly impacts where households are most able to purchase homes • Higher cost areas require long term affordability assistance to be accessible • Lower cost areas require development assistance and may be naturally affordable Accessibility to 30-80% AMI households* Most Moderate Least 2014 Average 2016 YTD Average Projected 2016 % change in sale Home Sale Price Home Sale Price Mortgage Payment* price 2014 - 2016 Community Name City of Minneapolis $205,000 $230,000 $ 1,027.89 12% Near North $101,000 $134,000 $ 598.85 33% Camden $101,250 $136,400 $ 609.58 35% Phillips $115,000 $157,000 $ 701.64 37% Powderhorn $168,000 $199,900 $ 893.37 19% Northeast $179,500 $220,000 $ 983.19 23% Longfellow $196,250 $230,000 $ 1,027.89 17% University $226,000 $240,950 $ 1,076.82 7% Nokomis $222,375 $245,600 $ 1,097.60 10% Central $321,000 $300,000 $ 1,340.72 -7% Calhoun-Isle $318,500 $343,000 $ 1,532.89 8% Southwest $323,500 $353,419 $ 1,579.45 9% Source: MLS data, December 18, 2016 *Assumes FHA terms: 3.75% interest rate, 97% loan to value, 30 year fixed rate mortgage with annual cost of $2,500 for property taxes and insurance. 14
Recap • Minneapolis will have more people and households in the coming decades • There are sustained racial disparities in all aspects of housing • The number of housing units affordable to lower income residents is decreasing • Renter households are growing faster than owner households, and face tougher economic realities with higher costs and lower incomes • A tightening rental market is one of many factors contributing to reduced affordability and limited fair housing choice
Key Policy Implications • Affordable housing resources • Affordable Housing Trust Fund • Family Housing Initiative • Mixed income housing • Incentives for more affordable housing in primarily market rate developments • Preservation of affordable housing • City’s NOAH Preservation Fund • Notice Provisions • Longer term affordability • Homeownership capacity building • Fair housing choice
City Affordable Housing Resources • Affordable Housing Trust Fund - $8.5 million • Family Housing Initiative - $1 million • Naturally Occurring Affordable Housing (NOAH) Preservation - $1.5 million • Higher Density Housing Acquisition - $400,000 • Homeownership Development - $1.5 million • Homeownership Assistance - $1.6 million • Homelessness initiatives - $1 million Total - $15.5 million
Lake Street Station • 64 affordable senior units • Transit-oriented development • Unique design – fit between a busy shopping center and the Lake Street LRT station
Franklin Gateway (The Rose) Mix of long-term homeless, tax credit, and • market rate units High performance design, efficient energy use, • healthy building materials National awards for environmentally • sustainable living for low income households
Commons at Penn • 47 affordable 1BR-3BR units • Will soon house Wirth Cooperative Grocery • Area is a food desert according to USDA • The developer - Devean George - grew up a mile from the project
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