If there is anyone in the race for city council who understands housing I have to comment it is me. I have worked in the commercial real estate industry for twenty-five (25) plus years. Most importantly I have developed, constructed and owned housing in the hospitality sector and in the senior living industry. Our Global Pointe Senior Living Building provides housing for over one hundred (100) seniors some of who are vulnerable adults. Global Pointe provides housing for a group of older adults who have care needs each and every day. I understand the challenges in construction and what it takes to be a quality partner in an operational building.
There are several models to follow in the discussion to create additional affordable housing for our city. One is a business model which I have recently been discussing with one of the metropolitan area’s largest nonprofit housing organizations. An organization which has built, purchased or renovated more than 5,800 apartments and townhomes. Their type of model calls for a structure where there is a joint-venture formed which allows for a more desirable capital stack. This structure also qualifies the housing development for additional tax benefits by creating what is known as a Tax Increment Financing (TIF) district for a housing project, which bottom line allows the building to make financial sense and get built. In this type of model 80.00% of the housing stock in a newly constructed apartment building would be market-rate apartments and 20.00% would be affordable apartment homes. This is a structure that I think is very effective in creating the kind of additional affordable housing our city needs.
Stable, decent-quality, and affordable housing is critical for communities and the overall economy. Housing instability can impede workers’ ability to secure and maintain employment. The housing sector creates a multiplier effect throughout the economy. Contractions or slow-downs in construction, upgrades or sales can translate into reduced employment and consumer spending, deepening any soft-landing or recession our economy may be facing in the short term. Financial pressure on low-income renters also harms small landlords, who are disproportionately people of color and account for a large share of unsubsidized affordable housing.
Another model to create affordable housing is to expand affordable housing through acquisition of already existing buildings. The U.S. Department of Housing and Urban Development’s (HUD) Moving to Work Program allows housing acquisitions in high-opportunity neighborhoods. The Moving to Work Program works because it allows exemptions from housing voucher rules and provides flexibility in how cities use federal funds. To create affordable housing the City of Minneapolis must make a true commitment to wanting to create additional affordable housing.
In my opinion designing programs that work for developers is one of the best ways to get the private sector more invested in creating affordable housing. Incentivizing housing developers to create more affordable housing by offering modified zoning and expedited review by the planning commission should be reviewed to determine if it is feasible. The bottom line is that we must get everyone to the table working through the hurdles and challenges that slow down this housing from being created. I feel my background in constructing housing puts me in a unique situation to be a valuable resource for the Minneapolis City Council as they review development proposals or look to structure programs that will help boost affordable housing construction in Minneapolis.