Reports & Publications

Minneapolis, Minnesota: Addressing Barriers to Affordable Housing

Minneapolis is sensitive to the effects that public policies have on the cost of housing, or serve to dissuade development, maintenance or improvement of affordable housing. Although some of the barriers to the cost of producing affordable housing are beyond the control of local government, it is hoped that city policies do not create more barriers. The city works to establish positive marketing strategies and program criteria increasing housing choices for households with limited incomes, to provide geographical choice in assisted housing units, and to improve the physical quality of existing affordable housing units. The city has identified regulatory, transportation and financing issues as barriers to affordable housing.

Goal H-6	Remove or ameliorate any barriers to affordable housing
Objective H-6a	Mitigate barriers to the development, maintenance, and improvement of affordable housing

Regulatory/Program Strategies

• In the area of regulatory controls, the city has administratively reformed its licensing and examining boards to ensure objectivity and eliminate unnecessary regulation in housing development. The city continues to update unnecessary regulation in housing development. The city no longer limits the pool of contractors that can enter the city to facilitate housing development, which encourages a more competitive pricing environment.

• In response to other regulatory controls and life safety issues that may affect the cost of affordable housing, the city housing agency continues to work with various regulatory departments to cancel special assessments and outstanding water charges on properties during the acquisition process. Construction Code Services waives the deposit on commended buildings when the housing agency or the county requests to rehabilitate these buildings. The Minnesota Conservation Code has given the building official the opportunity to extend greater discretion when rehabilitating existing buildings.

• Truth in Sale of Housing and Code compliance staff work closely with real estate and mortgage industries to address issues brought on by the many foreclosures. Truth in Sale of Housing reports are cancelled with the foreclosure, allowing the bank to proceed with a new report to sell to a new buyer. Code compliance information on condemned properties is emailed to agents so they can apply for the inspection before marketing the property.

• The City's Truth in Sale of Housing program is now web-based. Both sellers and buyers have greater access to the report, repair checklists, and certificates needed for sale. Real estate agents and closers also have access to the documents they need for marketing or closing 24/7. The program is trying to help maintain the housing stock by identifying housing deficiencies and requiring that certain life-safety items be repaired when a property is sold.

• In 2002, the city amended its zoning code to increase flexibility and provide an affordable housing density bonus for developers. The maximum floor area ratio and number of dwelling units for new cluster and multifamily dwellings of five or more units may be increased by 20 percent if at least 20 percent of the dwelling units are affordable housing (50 percent of MFI).

• Minneapolis has had a very active stabilization/preservation program for many years and participates in the Interagency Stabilization Group (ISG), a multi-jurisdictional group of affordable housing funders. The group considers the stabilization needs of existing housing units in a comprehensive and coordinated manner, working directly with lenders to accomplish goals. This approach deals directly with the problems of existing units to make sure that they remain affordable. Comprehensive funding solutions are provided for the physical and financial stabilization of distressed and at-risk affordable rental properties.

• The City is participating in the Family Housing Fund's new Preservation of Supportive Housing for Families Initiative, also called the Stewardship Council. A broad group of funders (FHF, CPED, MHFA, HUD, Hennepin County and Mn DHS) has been convened to focus on the stabilization of family supportive housing. In addition to financing the stabilization of individual properties, there is an emphasis on asset management, organization capacity, and healthy families initiatives. There is a core relationship to the State Business Plan to End long Term Homelessness and ongoing monitoring of City production progress as it relates to the Heading Home Hennepin plan.

• CPED's recently developed land acquisition programs (Higher Density Corridor Program for multifamily housing projects and Capital Acquisition Revolving Fund for mixed-use projects) address a key barrier to affordable housing – the need to assemble sites for development. These initiatives allow the city to gain control of land for disposition to developers for affordable and mixed-income development on the city's corridors, creating a critical linkage between affordable housing, jobs and transit.

• Since lead-based paint can serve as a barrier to the preservation of safe and affordable housing, the city will continue multi-faceted efforts with county and community partners to address this issue. The city is taking a two-pronged approach to eliminate childhood lead poisoning. City efforts include training contractors to mitigate lead-based paint hazards on rehabilitation projects. Work supports the city’s formally adopted 2010 goal of eliminating lead-based paint hazards in the community. The elevated blood lead response program continues to perform risk assessments and write corrective orders. The city implemented an administrative citation program to levy fines against property owners who do not comply with written orders in a timely manner. Our program combines CDBG funds with HUD lead hazard control grant which is performing risk assessments and making properties lead safe in a targeted neighborhood traditionally high for lead poisonings. In 2007 the city continued using CDBG funds with HUD Lead Hazard Control Grant funds to make residential units safe. We also continue our cooperation with Hennepin County in providing risk assessments and case management on elevated blood lead cases. Hennepin County uses their HUD grant funds to provide lead hazard reduction on the residences of these children.

• Minneapolis has reinstituted a joint city and county Vacant and Boarded Housing Task Force. The task force has the responsibility of coordinating city and county efforts to bring vacant residential property back on the market as soon as possible. The city continues to work together with CPED, Regulatory Services and the County to restore dilapidated property where appropriate and demolish it where the economic feasibility justifies removal. During the 2007 program year the city successfully developed and sold properties to low and moderate income buyers.

Transportation Strategies

• Concerning addressing transportation barriers for low-income residents and its impact on accessing job opportunities that promote economic self-sufficiency, the city actively seeks to link its affordable housing and commercial corridor development strategies.

• The city has also amended its comprehensive plan to allow for denser housing development along sections of its light rail corridor. The city also strives to locate affordable housing units with access to public transportation through offering developers density bonuses. The city's primary multifamily funding programs have established priority points in their respective ranking systems for "proximity to jobs and transit".

• The Minneapolis Plan, the City's Comprehensive Plan, was adopted by the Mayor and City Council on March 24, 2000, and is currently being updated in accordance with state law. The Plan and its corridor housing implementation programs support the development of affordable and mixed-income housing in close proximity to transit service, especially near Light Rail Transit stations and along high frequency bus routes. Since 2000, the Minneapolis Plan has been amended several times to include opportunities for investment development that maximizes the benefits of transit such as multi-family housing.

• A higher density corridor housing initiative provides new funding sources for public (CPED) acquisition of sites for multifamily housing development on or near community, commercial and transit corridors as defined in the Minneapolis Plan, will be used to assemble larger sites for new mixed-income rental and ownership multifamily housing development.

• The comprehensive plan states that Minneapolis will implement steps to integrate development with transit stations, concentrating highest densities and mixed-use development nearest the transit station and/or along commercial corridors, community corridors and/or streets served by local bus transit. This supports the development of new housing types and recruitment of land uses that value convenient access to downtown Minneapolis or other institutional or employment centers that are well served by transit.

Financing Strategies

• The Minneapolis city council adopted a preservation policy in 1991, and since then, the city has preserved 2,660 units of federally subsidized housing through proactive efforts. The Minneapolis Public Housing Authority in partnership with the City of Minneapolis has utilized Project Based Section 8 to stabilize over 560 units of low income housing serving homeless families, people with HIV/AIDS, and others.

• Along the line of keeping private housing affordable, the city provides funding for programs preventing mortgage foreclosures. Minneapolis CDBG funds are used to leverage mortgage foreclosure programs where foreclosures are prevented at rates exceeding 50% where households receive intensive counseling. The program provides financial assistance in the form of a no interest-deferred loans to reinstatement mortgages for families. In addition funds are leveraged from other public and private sources to reinstate mortgages. This project provides intensive marketing and outreach to underserved populations.

• The City will continue to lobby and advocate for full federal and state financial participation in its affordable housing efforts. This includes full financing of the Section 8 Housing Voucher program. Other legislative items that the City supported include: reauthorization of the tax class that benefits rental developments provided at least 75% of their units are funded by Section 8; sustaining the funding levels of the challenge grant, and increasing the housing trust fund appropriation, to increase funding for homelessness prevention.

• The MPHA continues to manage and preserve over 5000 units of public housing serving low income families and over 4500 Section 8 vouchers. Additionally, MPHA acts as a financial fiduciary for several local homeless shelters and battered women shelters.

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