CITY OF MINNEAPOLIS Minnea eapol olis Ho Homes es Vision on Aligning Homeownership Products with Minneapolis 2040 7/9/2020
Outline 1. Racial Disparities in Homeownership 2. Recommendation highlights - Reserve all residential city-owned land for affordable housing - Serve households below 80% AMI with all homebuyer programs - Strengthen commitment for perpetual affordable housing - Improve access for resident-led and BIPOCI developers 3. Timeline and outcomes 2
What is Minneapolis Homes? Umbrella name for City of Minneapolis-sponsored scattered site housing products. Homebuyer Support • Homebuyer education and homebuyer capacity building • Down Payment Assistance • Home Ownership Opportunity Minneapolis (HOM) • Grow North Property • Minneapolis Homes BUILD/REHAB Financing • Housing Production • Minneapolis Homes Development Assistance (MHDA) • Home Ownership Works (HOW) • Missing Middle Pilot • Minneapolis Homes BUILD Homebuyer Incentive • Home Improvement Loans 3
City Policies Goals and Values 4
Eliminating Racial Disparities in Ownership • Eliminating racial disparities in ownership… • is an important component in reducing involuntary displacement • means serving 12,948 BIPOC households OWNERSHIP DISPARITY BY RACIAL GROUP IN MINNEAPOLIS, 2014-18 Ownership % Renter % 20% 25% 30% 36% 1,022 38% 935 2,281 renters 423 renters 8,287 renters renters renters 57% 37% 32% 27% 21% 19% 5 WHITE BLACK INDIGENOUS HISPANIC TWO OR MORE ASIAN
Community engagement themes • Leverage City land for broader goals • Serve lower income households • Disrupt displacement trends • Simplify program access • Encourage community-led development • Prioritize perpetual affordable housing 6
Minneapolis Homes recommendations Homebuyer Education • Continue support of homeownership counseling and homeownership capacity building • Focus on culturally-specific outreach • Improve options for homebuyer education for 2-4 unit properties Down payment assistance • Eliminate 81-115% area median income (AMI) tier • Continue funding 80% AMI and below • Discontinue Grow North pilot due to limited resources 7
Minneapolis Homes recommendations Property • Reserve all City-owned residential land for affordable housing serving households below 80% AMI • Additionally reserve land in Northeast, South, downtown for perpetual affordable housing • Stop accepting offers for unfunded property effective August 31, 2020 8
Minneapolis Homes recommendations Financing • Eliminate 81-115% AMI bracket across all programs and provide sufficient subsidy to create affordable ownership units that serve three income tiers: 80%, 60%, 40% • Diversify units created for a city-wide strategy • Financing privately-owned properties • Acquisition and/or rehabilitation of existing units • Occupied units that stabilize existing occupants eligible • 1-20 unit development 9
Minneapolis Homes recommendations Financing • Consolidate programs into Minneapolis Homes: Financing • Accessible application process • Allow full subsidy through program and encourage leverage • More options for perpetual affordable housing (PAH) • Create a city-sponsored PAH model using a 2% fixed rate formula • Continue support of City of Lakes Community Land Trust; open to new models Timeline • Select PAH administrators Q3 2020 • Notice of Funding Availability for development proposals Q4 2020 • Construction 2021 • Property sales 2022 10
Development options Recapture (-15% discount ) City-owned property City of Lakes Community Land Trust North Minneapolis model (Near North and Camden Communities) City-owned land or financing Homeownership New model approved Project (less than 20 units) Perpetual Affordable by City (+20% discount) All of Minneapolis City-owned or privately-owned property Inclusionary Zoning City 2% fixed rate (more than 20 units) model Eligible activities: Acquisition, Rehabilitation, New Construction, Stabilization Homebuyer or community-led projects can access through qualified developer partnerships. Perpetual affordable projects possible through partnerships with approved models. 11
Policy and guidelines evaluation in 2024 Expected outcomes by 2023: • Perpetual affordable housing rate doubles to 60% of financed units • BIPOCI household service rate continues at 70% and average household income served is 60% AMI • Community-led and/or BIPOCI-led developers represents 50% of projects • Racial disparity rate in homeownership is reduced by at least 3% 12
Questions and Feedback Roxanne Young Kimball Roxanne.Kimball@minneapolismn.gov Minneapolis Homes team mplshomes@minneapolismn.gov 13
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