Correspondence1
Correspondence
Youth Baseball 2001 flyer.
Letter to Raymond E. Piirainen dated January 16, 2001.
Chanhassen Fire Department Fire/Rescue call sheet dated January 1 - 7, 2000.
Chanhassen Fire Department Fire/Rescue call sheet dated January 8 - 14, 2000.
Letter from Rachel & David Igel dated January 17, 2001.
LMC Friday Fax dated January 12, 2001.
Letter to "Dear Resident" dated January 11,2001.
Letter from Southwest Corridor Transportation Coalition dated January 11, 2001.
Memo to Mayor and City Council dated January 16, 2001.
CCSC Newsletter dated January/FebruaD, 2001.
Resolution Amending Procedures for Filling Commission Vacancies.
Letter from Carver County Assessor's Office dated January 5, 2001.
Attention Chanhassen Businesses flyer.
Letter from Campbell Knutson dated January 15,2001.
Memo from Campbell Knutson dated January 15, 2001.
Resume for Patrick Mackey received January 17, 2001.
District 112 Baseball Association
MISSION: The main goal of the District 112 Baseball Association
is to provide our youth with the opportunities to learn the fundamentals of
baseball in an environment of teamwork and competition, but more
importantly to have fun!
The newly reorganized District 112 Baseball Association, consisting
of Carver Baseball Association, Chanhassen Athletic Association (CAA),
Chaska Youth Baseball Association (CYBA), and the Victoria Athletic
Association (VAA), have teamed together to give all of youth baseball
players the opportunity to Play together, (On traveling teams) and against
each other, (In a combined In-House League.)
The various team opportunities exist for our youth baseball players.
..
1. Ages 8-12 In-House (Consisting of one League fi.om all four
Associations).
2. Metro Traveling teams, ages 10-15 (Consisting of players fi'om all of
District 112, playing in a league with other area metro traveling teams).
3. Prairie League, ages 13-18 (In-House teams playing against other In-
House teams from Eden Prairie).
4. Minnesota Valley League, ages 13-15 (Teams from Victoria and Carver,
playing against local town teams).
**Look for complete registration packet for all youth baseball playing
opportunities in early February.
NOTE: Ages eight and under look for your registration forms through your
local Youth Community Association.
CITYOF
CH H SE
0 CiP./CenterDfive, ?Oaox 147
Chanhassen, Minnesota 55317
Phone 612.937.1900
General £~v 612_.937. 5739
5ngineering £~v 612.937.9152
),blic Safe~7 £~ 612.934.2524
Web www. ci. chanhassen, mn. us
Januao' 16, 2001
Mr. Raymond E. Piirainen
Director of Real Estate
Fairview Health Services
2450 Riverside Avenue
Minneapolis, MN 55454-1395
Dear Ray:
Thank you for your letter dated January.' 12, 2001.
It was mv understanding that after the meeting of last week that the March 12th
meeting is at this point the target date for your presentation before the Council.
Beyond that, there is no application or other more formal process to get an item
on the agenda. Simply, you should have whatever documentation you wish to
have distributed to the City Council to my office by the close of business on
Monday, March 5th. You should be sure to provide 15 copies of your
documentation so that we have enough to distribute to all interested parties.
Should you have any questions between noxv and then, please feel free to contact
my office directly.
Sincerely,
o c er
City Manager
SAB:k
C'
Mayor & City Council
Todd Gerhardt, Assistant City Manager
Kate Aanenson, Community Development Director
g: xuse r'~scott b\fai rview I .doc
::= FAI RVIE~
Fairview Health Services
January 12, 2001
2450 Riverside Avenue
Minn~al:¢li$, MN 55454.139~
Tel £12-672-6300
Scott Botcher,. City Manager
City of Chanhassen
690 City Center Drive
Chanhassen, Minnesota 55317
952-937-1900 (fax 952-937-5739)
Re~
Fairview purchase and development of medical campus
SE corner of Highway 7 and 41
Chanhassen
Dear Scott:
Thank you for the meeting Wednesday, January 10. Per your
suggestion, we look forward to presenting information to the Chanhassen
City Council on tentatively either February 26 or March 12 regarding our
requested PUD amendment.
As we discussed at the meeting, I will contact you to ensure that
Fairview follows the appropriate proced~e in arranging and preparing for
the presentation.
Very truly yours,
Raymond E. Piirainen
Director of Real Estate
rpi~rai 1 @.fairview.0rg
612-672-6963 (fax 612-672-7124)
cc: Steve Borgstrom Robin Gaustad Fred Ricl~ter, Steiner Development
TF3TC~I I~
CHANHASSEN FIRE DEPARTMENT
FIRE/RESCUE
WEEK OF JANUARY 1 - JANUARY 7, 2001
mon
Mon
Mon
Tues
Thurs
Thurs
Thurs
Thurs
Thurs
Thurs
Thurs
Fri
Fri
Fri
Fri
Fri
Sat
Sat
Sat
Sun ·
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
9:15 AM
12:22 PM
3:34 PM
11:57 AM
2:02 AM
2:09 AM
5:47 AM
3:08 PM
5:42 PM
6:13 PM
6:37 PM
7:05 AM
10:46 AM
2:49 PM
9:55 PM
10:18 PM
11:07 AM
12:00 PM
8:58 PM
9:38 AM
Mohawk Drive
Hunter Drive
Minnetonka Fire Dept
West 78th Street
Deerbrook Drive
Santa Vera Drive
Bluff Creek Drive
Pontiac Lane
Bluff Creek Drive
West 78th Street
Chan View
Highway 101 & Twilight Tr
Lodgepole Point
Lake Riley Boulevard
Pleasant Park Drive
Highway 5 & Market Blvd
Utica Lane
Ibis Court
Coneflower Curve
Hickory Road
Medical - trouble breathing
Medical - head injury from a fall
Mutual aid- stand by
Medical - seizures
Medical - person unconscious
Medical - chest pains
Medical - trouble breathing
Medical - severe abdominal pain
Medical - possible seizures
Medical - person fell
Medical - trouble breathing
Car accident - cancelled, no injuries
Car fire - out upon arrival
Medical - trouble breathing
Medical
Medical
Medical
Medical
Medical
Medical
- trouble breathing
- unresponsive male
- um'esponsive male
- person fell
- chest pains
- assist with lifting patient
CHANHASSEN FIRE DEPARTMENT
FIRE/RESCUE
WEEK OF JANUARY 8 - JANUARY 14, 2001
mon
Mon
Mon
Tues
Weds
Weds
Weds
Thurs
Thurs
Thurs
Thurs
Thurs
Fri
Fri
Sat
Sat
Sun
Sun
Sun
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
Jan
8
8
8
9
10
10
10
11
11
11
11
11
12
12
13
13
14
14
14
7:43 AM
4:05 PM
5:31 PM
3:24 PM
8:40 AM
12:25 PM
6:13 PM
5:49 AM
1:03 PM
1:11 PM
3'13 PM
9:03 PM
5:18 AM
6:53 PM
8:28 AM
2:42 PM
12:43 AM
11:49 AM
9~
:~ PM
City Center drive
Chaska Fire Dept
Stratton Court
Dove Court
Arboretum Blvd
Park Drive
Ponderosa Drive
Frontier Trail
Century Boulevard
Audubon Road
Audubon Road
Autumn Ridge Avenue
Highv,,ay 101 & Lyman Blvd
Mission Hills Way West
Highway 5 & Dell Road
Chanhassen Road
Sandy Hook Drive
Chan View
Marshland Trail
Fire alarm - false alarm, no fire
Mutual aid - house fire
Fire alarm - false alarm, no fire
Medical - chest pains
Medical - un ~known problem, cancelled
Fire alarm - false alarm, no fire
Medlcal - possible seizures
Medical - head injury from a fall
Medical - unknown problem
Medical - chest pains
Medical - pregnancy complications
Medical - severe nose bleed
Car accident with injuries
Medical - possible heart attack
Car fire, false alarm
Medical - possible heart attack
Medical - person fell
Medical - trouble breathing
Medical - trouble breathing
FROM
IGEL
FAX NO. : 612401136~
F~b.
17 ~001 lI~:46RM
P2
RACHEL & DAVID IGEL
January 17, 20l) 1
VIA FAC.,q. IM[LE AND M~IL
Ms. Kp_te Aanenson, Planning Director
Mr. Robert Generous, Sen/or Phnner
Ci~ of Chanhassen
Ciw Hall
P.O. Box 147
Cl~anhassen, MN 55317
Re:
Application for David and Rachel Igel
7303 l,,q_redo Drive Chanhassen, MN
Dear Ms..Aanenson and Mr. Generous:
T[zis wil_l con~xm that we have ¢.sked to be removed from tim Cit,/Cou~dl race,ag
schedule for Janu,~zy 2001, We have derided to axxmit a full mcmbership of thc City Courmil
before presen~g our application for subdivision.
RaChel A. Igel
cc: Bruce Ms21-:crson (via facsimile)
6195 STRAWBILRRY LANI:.- .qHORI-'.WOOD, MN - .-15331
FMC)NE: 951.'}01,3377 - F/xX: 952.401o1362
Jan 12 2001 lg:l?:~ ~ia Fax
937 5?39 fid~inistrqtOr
.,
A weekly legislative update from the League of Minnesota Cities
P~§e 001 gf 002
~Z'Page ed~\°~
N umber 2
January 12, 2001
House Ways and Means
hears note of economic
caution
On Friday, the House Ways and
Means Committee heard testimony
from State Economist Tom Stinson
about the recently-released state
economic update. In that report,
state revenue collections for
November were below forecast
estimates. Given recent concerns
about the slowing national economy,
legislators were interested in the
report and whether the economic
update is a predictor of a slowing
state economy.
In late November, the governor and
the Legislature were presented
with another forecast with a multi-
billion state budget surplus. At that
time, Finance Commissioner Para
Wheelock stopped short of warning
legislators and the media that the
state's economic forecast firm was
relying on some of the most optimis-
tic projections of economic growth.
Ultimately, the question for legisla-
tors and the governor is whether
the projected $3 billion state budget
surplus for the upcoming 30 months
will be revised downward in the
February forecast. In two weeks,
the governor will unveil his budget
and tax reform recommendations.
It is widely believed that his entire
package, including tax cuts and
rebates, will be based on what may
now be optimistic November forecast
figures.
Although the figures in the economic
update appear to add concern to
the forecast, S-'tinson stressed that
he does not want to make long-term
predictions based on monthly state
revenue receipts. He urging legisla-
tots to wait for the official February
forecast.
Bill Introductions
Beer keg Identification
H.F. 58, a bipartisan effort to
implement requirements for beer
keg identification, was introduced
by Representatives Mary Jo
McGuire (DFL-Faloon Heights),
Connie Bemardy (DFLoFridley),
Steve Dehler (R-St. Joseph), and
Matt Entenza (DFL-St. Paul) and
was referred to the Commerce
Committee. The proposed legisla-
tion would require off-sale retailers
to engrave or attach the prescribed
identification to any beer kegs sold.
Retailer~, would also be required to
record information at the time of
sale, including the purchaser's
name, address, and driver's license
or social security number, the date
and time of purchase, and the keg
identification number. The bill
makes it a violation for a person
required to record keg identification
information to knowingly enter
materially false information in the
book or register. The legislation
also includes an additional deposit
requirement refundable subject to
the keg's return with the identifica-
tion intact.
Curbing use of TIF
Two bills were introduced in the
Senate yesterday to significantly
limit the use of tax increment
financing (TIF). S.F. 65, introduced
by Sen. John Marty (DFL-Roseville),
would prohibit the certification of
new and modification of existing TIF
districts after May 31, 2001. The
bill would also repeal the tax
abatement law and restrict the
other business subsidies. S.F. 73,
introduced by Sen. Ann Rest (DFL-
New Hope) and supported by the
Metropolitan Inter-County Associa-
tion, would prohibit the modification
of TIF plans after April 30, 2001,
and limit the use of increments from
districts for which the request for
certification was made prior to
May 1, 1990. After April 30, 2001,
increments may be spent on
activities authorized in the TIF plan
only if one of the following occurs
by April 30, 2002: (1) payment is
made to a third party; (2) bonds
are issued and sold to a third party;
(3) binding contracts with a third
party are entered; or (4) costs are
paid and the revenues are spent to
reimburse a party for payment of
those costs. Any remaining TIF
revenues could only be spent to
pay certain outstanding bonds and
contractual obligations and credit
enhanced bonds and then the
district must be decertified.
Mayors address
affordable housing crisis
Mayors from cities as diverse as
New Hope, Plymouth, Rosemount
Minneapolis, Ramsay, and
Woodbury appeared before the
Senate Jobs, Housing & Community
Development Committee Friday
morning to tell lawmakers cities are
ready to take the lead in address-
lng the challenge of providing
housing affordable to working
families and those on fixed incomes.
They called on the Legislature to
look at the problem as one of the
most complex social, economic,
and moral problems the state
faces, and urged major investment
in resources for housing production
and the development of incentives
to involve the business community.
For more information on ciO, legislative issues, contact any member of the League of Minnesota Cities Intergovernmental Relations team,
(651) 281~1200 or (800) 925-1122
Jan 1Z ZHH1 lB:IH:29 ~/ia Fax
,-RIDA Y'-AX
JA~U~Y 12, 2001 -- PA~ 2
->
&lZ 937 5799 administrator
Page 002 Of 002
The mayors also said the Legisla-
ture cannot expect and must not
insist that cities rely solely on the
local property tax to spur housing
solutions.
Minneapolis Mayor Sharon Sayles-
Belton and Lakeville Mayor Duane
Zaun headed up a mayors' task
force on affordable housing for the
Metropolitan Council. A total of 16
mayors convened last spring to
determine what changes are
needed to achieve housing goals
and to develop recommendations
to achieve those aims. Mayors at
today's hearing included Mayor
Sayles-Belton, New Hope Mayor
Peter Enck, Plymouth Mayor Joy
-Herney, Ramsey Mayor Tom
Gamec, Rosemount Mayor Cathy
Busho, and Woodbury Mayor
William Hargiss.
The task force also issued these
recom men dation s:
· Make local officials "ambassa-
dors'' for affordable housing and
ensure that such housing is
provided just as jobs, schools
and parks are provided;
· Revise state law to make it
easier for cities to rezone land
and eliminate supermajority
requirements for zoning;
· Encourage cities to review,
waive, or change local develop-
ment practices and policies that
add to the cost of housing;
· Endorse the Housing Minnesota
Campaign created by the Minne-
sota Housing Partnership (the
League has already done so.);
· Back cities that ensure local
planning and zoning enables
development or redevelopment
of affordable housing;
· Encourage cities to develop
strategies for building affordable
housing and to work together to
raise the visibility and support
for affordable housing locally;
· Encourage businesses,
churches, and other faith-based
organizations to become more
actively involved in supporting
development and management
of such housing and in reaching
out to residents to address
concerns.
Upcoming committee
hearings
Next week, Senate and House
committees will continue to hold
general departmental overviews in
order to educate new members.
Hearings of interest include:
· House Regulated Industries
Committee to hear about energy
issues from Dept. of Commerce.
Jan. 17--12:30 p.m.
107 Cap~tel
· House Local & Metropolitan
Gov't. Committee will hold
informational hearing to learn
about different local government
organizations, including the
League.
Jan. 17--12.'30 p.m.
200 State Office Building
· Joint House Crime Prevention/
Judiciary Finance meeting to
discuss Criminal Justice Informa-
tion Policy Group and CriMNet.
Jan. 18--10:15 a.m.
Basernent t~earing room/
State ONce Building
Leg is I ativ o n fe re n ce
February 1, 2001 Sheraton Midway Hotel, St. Paul
City officials get the big story on the Big Plan and more
City life under"W'; reflections of veteran Capitol reporter are highlights of conference
Registration fee: $70 for Howto register: Registeronline anytime at Questions? Call Jodie Tooley (651) 281-1251
members; 520 foryouth, www,lmnc.org (online registrations will be billed), or Cathy Dovidio (6.51) 281-1250.
CIT¥OF
CHANHAS EN
690 GO' Ce, te;' Drive. PO Box I47
C/.,,u;hassen, ?[i;mesota 55317
?/,o,e 612.93 ~
Ge,e~l L~.x' ~12. 932 5;;39
3;gi,(e;i,g ~.v d12.~37.9152
?,b/iv 5,.~, ~.v ~h.
January 12,2001
Dear Resident'
The Plmming Staff of the City of Chanhassen would like to invite you to an
informal open house to discuss inconsistencies between the adopted 2020 Land
Use Plan and the zoning of property in your area. The purpose of this open house
is to discuss potential development options in your neighborhood, to answer
questions regarding the comprehensive plan and city zoning ordinances, and
discuss issues of concern to area residents.
The Open House will be held on Tuesday, January 23, 2001, fi'om 6'00 to 8:00
p.m. at the Chanhassen Recreation Center at 2310 Coulter Boulevard.
If 3'oct have any questions.or need additional information, please contact Bob
Generous at 952-937-1900. extension 141.
Sincerely.
Robert Generous, AICP
Senior Planner
SOUTHWEST CORRDOR TRANSPORTATION COALITION
470 Pillsbury Center
Minneapolis, MN 55402
(612) 33%9300
(612) 337-9310 (Facsimile)
January 11, 2001
Gene Dietz
Director of Public Works
City of Eden Prairie
8080 Mitchell Road
Eden Prairie, MN 55344
Scott Botcher
City Manager
City of Chanhassen
690 City Center Drive
Chanhassen MN 55317-0147
Dave Pokomey
City Administrator
City of Chaska
1 City Hall Plaza
Chaska, MN 55318
Re'
Annual Contribution to Southwest Corridor Transportation Coalition for 2001
Dear Gentlemen:
I was asked to summarize the activities of the Coalition with respect to transportation improvements
in your cities.
I anticipate them to include the following:
Monitor and support Minnesota Department of Transportation construction activities in the
widening of T.H. 5 from Powers Boulevard to T.H. 41;
o
Monitor and support MnDOT construction of T.H. 312 (new T.H. 212) improvements
between Prairie Center Drive and Hennepin County Rd. 4 (Eden Prairie Road);
o
Monitor and support MnDOT right-of-way acquisition for T.H. 312 between Hennepin
County Road 4 and Carver County Road 147;
,
AdvoCate the earliest possible construction of T.H. 312 between Hennepin County Rd. 4 and
Carver County Road 147 before Congress, the legislature, the Metropolitan Council and
other applicable jurisdictions in whatever way practicable;
RJL-191848vl
LN400-51
January 11, 2001
Page 2
o
Advocate and support the official mapping of the widening of T.H. 212 between Carver
County Road 147 and Norwood;
.
Monitor and support environmental review and planning for improvements to T.H. 212 west
of Norwood.
Thank you for the past support of each of your cities and, hopefully, your continued support and
involvement. Please let me know if you have any further questions.
Very truly~
Robert J.
President
RJL:peb
Enclosure
cc' Fred Corrigan
Todd Vlatkovich
RJL-191848vl
LN400-51
CITYOF
90 GO' Ce,ter Drive, PO Box 147
C/_,a,hasse,, Mim~esota 55317
P/Jo,e 612.937.1900
Ge,era/Fax 612. 937. 5739
E,gi,eM,g ~.x' 612.93Z9152
Public S~'O, ~.x' 612. 93~.2524
MEMORANDUM
To: Mayor
City Council
From: Lori Haak, Water Resources Coordinator
Date: January 16, 2001
Re: Recent News Regarding Wetland Protection
An article appeared in the January 10 issue of the Minneapolis Star Tribune that
outlined a United States Supreme Court decision regarding wetlands in
Wisconsin. Since this ruling has been in the news, staff believes it is prudent to
provide the Council with a smrunary of the issue and its implications for
Minnesota and/or the City.
The case centers on the proposed construction of a landfill in a wetland. The
ruling by the Supreme Court will allow landfill construction and may threaten the
protection of 70 to 80 percent of Wisconsin's wetlands.
This brief memo is intended to highlight the differences between wetland
regulations in Wisconsin and Minnesota and to explain why Minnesota's wetlands
are not threatened by this Supreme Court ruling.
The mechanism for wetland protection varies 'from state to state, h~ Wisconsin,
applications for wetland impact enter the state's wetland protection framework
only when the Army Corps of Engineers (through the Clean Water Act) has
jurisdiction over the wetland. Thus, in cases where the Corps of Engineers has no
xvetland decision-making authority, the state has no decision-making authority.
In contrast, Mirmesota's wetland law (The Wetland Conservation Act, Minnesota
Rule 8420) is parallel to, but independent of, Corps jurisdiction. Minnesota's
requirements are more stringent than Corps requirements in some cases. The
State of Minnesota (through the use of Local Government Units like the City)
requires permits in many instances where Corps permits are not necessary.
Because federal attd state jurisdictions over wetland protection are independent
itt Minnesota, the recent United States Supreme Court ruling does not alter
Minnesota's ability to protect wetlands.
ATTACHMENT
1. January 10, 2001 Star Tribune Article
Published Wednesday. January 1 O, 2001
Ruling seen eliminating protection for 4 million acres
MILWAUKEE (AP) -- A U.S. Supreme Court decision limiting the scope of the Clean Water Act could
wipe out protection for more than 4 million acres of Wisconsin wetlands, a state official says. The court
ruled 5-4 Tuesday that the law should not prevent suburban Chicago localities from building a landfill
atop seasonal ponds used by migrating birds. The court upheld the claim of the Solid Waste Agency of
Northern Cook County that the Army Corps of Engineers lacked jurisdiction, since the area involved did
not connect with any interstate waterway.
In Wisconsin, a state law that gives the Department of Natural Resources the ability to protect wetlands
relies entirely on authority given to the corps by the Clean Water Act, said Franc Fennessey, executive
assistant to DNR Secretary George Meyer. The state law allows the DNR to sign off on the corps'
decisions on permits to fill or otherwise destroy wetlands.
"If the corps has no jurisdiction, then we have no jurisdiction, "Fennessey said Tuesday. "Initial estimates
indicate that 70 to 80 percent of the state' s 5.3 million acres of wetlands that were protected yesterday are
no longer protected today." Even if the corps maintains jurisdiction over larger wetlands, he said, "some
of the state's most sensitive wetlands could be left completely without protection because of their size and
nature." Fennessey said DNR officials would work with Gov. Ton~ny G. Thompson and Lt. Gov. Scott
McCallum "to take the steps necessary to protect those wetlands now unprotected."
State Rep. Spencer Black, D-Madison, who led the fight for the 1991 measure giving the DNR authority
over wetlands, said he would fight to" restore the regulatory scheme at the state level." However, Charlie
Luthin, executive director of the Wisconsin Wetlands Association, said it might be difficult to pass such
legislation. "Every trend we've seen since 1995 is that the DNR has been losing authority rather than
gaining it through legislation," he said.
A group of Chicago suburbs is now free to build the landfill, and the ruling means that a variety of other
construction projects may proceed without federal approval.
"This is a big case," said Donald Gallo, a Milwaukee attorney who handles environmental issues for real
estate developers and other corporate clients. Gallo said the decision appeared to strip the DNR' s ability
to regulate wetlands that aren't tied to navigable streams or rivers, making it easier to develop those
properties. "They would not have as much control over those (isolated) wetlands," Gallo said. Gallo
noted that isolated wetlands are often found in communities such as Oak Creek and Fran -klin, where
farmland is being developed into new homes, offices, business parks and stores.
Alan Wentz, group manager of conservation programs of Ducks Unlimited, said the habitat restored by
his organization would not be affected. Ducks Unlimited, with 750, 000 members, is credited with
restoring 10 million acres of waterfowl habitat, including wetlands across North America. "The areas
we've worked on are not at risk because we make sure that we have direct protection agreements either
with the agency or with the private landowner on whose land we work," Wentz said.
Copyright 2001 Associated Press. All rights reserved.
2hah / Chaska Soccer Club
¢ eason' s
3reetings from
he CCSC Board
7e hope yo.u & yours had a
xfe and happy holiday/
/ Joe Scott, CCSC President
rhanks to all of you who were able
~to attend our annual meeting on
November 14, 2000. It was, by
far, the biggest crowd we've ever
en. We also had a record number of
~,mbers nominated for the elected and
pointed positions. I hope that the trend
.~tinues in the future - this is your club.
Our 2001 Board Members (* indicates
mw Board Member):
Joe Scott - President
Adrienne Can-ica* - President-Elect
3reg Blaufuss - Past President
2arol Donen - Secretary
Rick Carlson* - Treasurer
Sue Skulborstad - Director-at-Large &
Risk Manager
Ibm Nilsson* - Director-at-Large
terry Leiendecker - Director of
2oaching & Player Development
3racy Godwin - Girl's District Rep
3eth Loughran* - Boy's District Rep
~'arol Brenton* - Referee Coordinator
~arry Doran - Field Coordinator
en Mohs* - Equipment Coordinator
'~heryl Hissong* - Uniform Coordinator
;cott Simonson* - In-House
;oordinator
en Jaeger* - Registrar
'our Board will have its annual retreat
anuary where we will finish the calen-
for the 2001 and 2002 spring & sum-
'seasons. Plans will be made for major
rovements in the Recreational
vain (Coach, Assistant Coach and
rer Clinics); a Member Service Survey,
ou can tell us how we're doing; and a
'-range strategy for a year-round Field
:ts Facility to be built within School
rict 112.
See "Board" on page 2
New ne_cs Ck as'_(a
, .. ~ -- ,.~ .¢2 ~ ,~, ,kgg .xw,- :--' :- · '- -. : ...... --
~~ X~:' ~ ~'~.:.~* ..... : ~.--.;..,-~ ...................................
: .~ ,:. ~ '-:% .~:~:~¢: ~ ~.:¢'"~..
:~:: . ..'-' ~ ~&~.~¢.,~ '~' , ~ ~ ......... .~; ~-. >:~:f - . < ?: .>. } ........ ;,.-.' ~
~. ~.J iZ~'~-~:L'':'? ,( ;..-::'; *:.' ~;f~':?:~:?'~ ~-. ::? ;'?.:' 'tX }x ,:- t{ '-;~~.:-, :' ' ~ :" ' -;.c' ;",.' ':'"-': : --~X'
The Chaska High School Girl~ Varsity team du~led Breck High ~chool this past fall at
the Chaska ~i~lo School Stadium, ~ame sitos will change for the 2001 Season.
This summer you will see construction
going on throughout the Chaska
Community. In collaboration with the
City of Chaska and School District 112
there will be upgrades and new construc-
tion of multi-purpose fields that will be
available for soccer and other sports.
Here is a brief summary of what you
may see during the next two years begin-
ning Spring 2001:
Chaska High School
· Soccer field turf improvements
· New visitor bleachers
· 250 parking spaces on the west side of
the school - Molnau property
· Multipurpose field developed on the
west side of school - Molnau property
Chaska Middle School Campus
· New soccer stadium lights
· New ADA compliant bleachers/press
box
· Expansion of the current stadium and
practice field(s)
· Development of multipurpose fields in
front of the CMSW
· Development of multipurpose fields
behind the CMSE
New Elementary School
· Two full-size multipurpose fields to be
completed September 2002
Many thanks to the City of Chaska,
School District 112 and Task Force mem-
bers who have worked to improve and
develop new fields for the athletes in our
community!
L TT P, FROM THE
DIRECTOR OF
COACHINO&. PLAYER
DEVELOPMENT
Players Needed
1-2 Players U-10 White Boys
Born 8-1-90 to 7-31-91 '
5 Players U-il C2 Boys
Born 8-1-89 to 7-31-90
By Terry Leiendecker
By now everyone should have received
their Summer 2001 Traveling Team
Placements. This year's process of com-
municating team placement has been dif-
ferent than previous years. Everyone
should have received a personal contact
from Registrar Jen Jaeger or myself. A
key benefit from this approach is the
valuable feedback from all of you. All of
your comments, both positive and nega-
tive, have been recorded and passed along
to the appropriate parties.
Forming teams three months earlier
than previous years allows the opportuni-
ty for more proactive planning by the
CCSC Board as well as aiding coaching
and player development process, better
preseason planning and early tournament
selections. Team rosters are expected to
be mailed in the beginning of February.
Additionally, with this earlier team
placement we have the opportunity to fill
vacant roster spots. Please reference the
"Players Needed" box for more informa-
tion on the available current vacant ros-
ter spots n~eded by some teams.
The Winter 2001 clinics are also start-
ing up at the Eden Prairie Dome and at
Bluff Creek Elementary for CCSC play-
ers. If you cannot attend these sessions
but wish to seek additional training I
strongly recommend the "Coerver
Coaching School of Soccer". They have
two sessions remaining that begin mid-
February at the Plymouth Field House
and the Holy Angels Star Dome in
tLichfield. The cost is $125 for 6 - 1 1/2
3-4 Players U-13 C3 Boys :
Born 8-1-87 to 7-31-88 i
1 Player U-14 C1 Boys :
Born 8-1-86 to 7-31-87 :
4 Players
U-9 White Girls
Born 8-1-91 to 7-31-92 :
3 Players
U-13 C3 Girls
Born 8-1-87 to 7-31-88
If you know of someone that is new to the
'area or did not get a chance to register this
past fall, please encourage them to call the
CCSC Hotline at 493-0118, box 3 for more
information.
hour sessions. Family and team dis-
counts are offered. For further informa-
tion call 952-915-9009 or visit
w~v. espsoccertraining.com.
Please join me in welcoming Scott
Simonson as the newly appointed In-
House Coordinator. With the team selec-
tion process completed early and having
Scott now in place, I truly believe that
coaching and player development will
have a greater impact on the CCSC
Recreational Program.
I am very excited with the prospects of
working with Scott who brings several
years of coaching knowledge and skill to
the program.
BoYs DISTRICT SELECT
Five members of CCSC's U12B team
born in 1988 participated in the IvI~SA
District Select program. The District
Select and Olympic Develop Program
(ODP) provided four weeks of advanced
training to self-selected participants based
upon their calendar year birth date. The
District Select program culminated in a
state-wide festival at Coon Rapids on
October 13th and 14th. MYSA selected
36-40 boys and 36-40 girls out of over 150
l~articipants (in each gender) to continue
advanced training throughout the winter
and attend a regional soccer camp in Iowa
in summer 2001.
Members of the CCSC 1988 year group
participating in this year's MYSA District
Select included Thomas Buller, Derek
Chamberlain, Josh Dingel, James Famelis
and Calvin Mai. CCSC players with birth
dates 1989 and earlier are encouraged to
consider participating in District Select
and ODP in 2001. Ask your coach or team
manager for additional information.
- Submitted by Jim Dingel
EQUIPMENT RECALL
The new Equipment Coordinator, Jen
Mohs, is asking all traveling soccer coach- .
es and/or managers (Boys & Girls) to
return their Fall 2000 equipment to her as
soon as possible. She is attempting to
make a complete inventory to prepare for
the upcoming Summer 2001 season. Your
cooperation is greatly appreciated. You
may contact Jen at 952-368-7475 or drop
off equipment at 1116 Falls Curve,
Chaska.
- den Mohs, Equipment Coordinator
UNIFORM UPDATE
All traveling teams will purchase new
uniforms this year. The Uniform
Committee has met several times and has
reviewed factors such as cost, material
weight, design, wicking ability, and appro-
priateness for both the boys and girls
teams. Recommendations will be going to
the Board for a vote at the January meet-
ing. More information to follow after the
January board meeting.
- Cheryl Hissong, Uniform Coordinator
"Board" continued from page
This is an exciting time for the game of
soccer, which is now the number one youth
participation sport in Minnesota. I'm con-
fident that our strategy will benefit all
members of the CCSC now and in the
future.
Thanks for )'our support!
COACHES
By Terry Leiendecker
The following excerpts are taken
from "Soccer - How to Play the
Game," which I believe serve as
fundamental reminders of some of the
most basic overlooked coaching concepts
for ages 9-14:
· The 9 to 14 age range represents the
most influential period in forming a fun-
damental base and love of the game
· Training sessions should continue to be
fun, yet at the same time keeping it con-
sistently challenging and competitive
· Playing to win games becomes increas-
ingly important but should not be at the
expense of "playing well"
· Avoid having your players '%oot" the
ball long and far in the hopes that one of
your fast for~vards can win a foot race for
a break away
· Always playing the ball up and for~vard
regardless of whether it's appropriate or
not does not develop players even if effec-
tive at lower age levels - it's proven not to
be effective at the higher levels for those
fast only forwards don't develop skills and
the strong legged defenders don't develop
touch
· How teams play the game, especially at
younger ages, is more important than
winning, however, the better the team
play, success usually follows - "playing
well" includes defensive and attacking
principles where team shape and team
flow are evident
· In early teen years the strength and
weakness of individuals will begin gravi-
tating them to certain positions - it is a
big mistake to pigeonhole individuals into
specific roles and positions
· The more well-rounded their skills are
developed the better the team will become
as the team matures
· All levels of players that are defenders
must be able to attack and attackers
must be able to defend - the best way to
teach your star forward to defend is to
play them in the back - encourage players
to become two-footed
· Don't place left footed players on the
left side of the field - this might be good
for a short term fix but it will thwart the
long term development of these players
for you;' team
CORNER
By Scott Sirnonson, In-House Coordinator
Welcome to the "Rec Corner," a new col-
~umn in the CCSC newsletter!
According to Ian Barker and John
Curtis of MYSA (Minnesota Youth Soccer
Association), "Player Development" and
"5~outh Soccer" are two terms that should
concern us the most and pose the
awareness for the need to improve small-
sided games in our youth programs so the
players have:
· more practical space to be successful,
· the number of"touches" with the ball,
· and the ability to make more decisions
on the field.
As the newly appointed In-House
Coordinator, I plan to aid in the develop-
ment of youth soccer skills in CCSC pro-
grams through the implementation of pre-
planned practice sessions
following questions: Can we
meet the challenge of improv- ~i:~ .....
ing player development and
player enjoyment in youth
soccer? And can we
help coaches, par-
ents and fans _0 gram.
improve their ~~ .........
_mjoyment and
hake the best use
)f our available ~) ~
-esources?
' Through my own coaching
ievelopment/education and
oast experiences, both Barker
md Curtis have raised my
and by hosting coaches
and player clinics. At the
same time I will help to
educate the new volunteer
coaches entering the pro-
If you or someone you
know is interested in con-
tributing to the CCSC
Recreational Program or
would like more informa-
tion on volunteering as a
coach, please email me at
ssimonsonCa~expresspoint.com
or leave a message on the CCSC
Hotline 493-0118, box 3.
CHAN / CHASKA
C CER
Club
RO. Box 735
Chanhassen, MN 55317
Todd Hoffman
690 City Center Drive
Chanhassen, tXCq 55317
CCSC CALENDAR OF EVENTS
DATE
January 6
January 7
January 9
January 13
January 22
February 1-9
February 6
Februrary 9-10
February 10
February 15
February 18
February 24
February 26
March 1
March 15
May
May 5-13
May 14
EVENT TIME PLACE
-
Winter 2001 (U11-U15+) Clinics Begin
Winter 2001 (U9/10) Clinics Begin
CCSC Board Meeting
Mini Walk-In 2001 Rec Registration Kick-Off
Traveling Coaches Meeting
12-4 pm
1-3:30
7 pm
9-11 am
8 pm
Summer 2001 Rec Registrations Distributed to area schools
CCSC Board Meeting
MYSA "C" License Prep
MYSA Goalkeeping Level Diploma
March/April Newsletter Submission Due
Mini Walk-In 2001 Rec Registration Fair TBA
MYSA Winter Symposium
Traveling Coaches Meeting 7 pm
Summer 2001 Traveling Balances Due
Summer 2001 Rec Registrations Due
Summer 2001 Rec League Begins
USSF National "C" License Coaching School
Summer 2001 Traveling League Begins
7 pm
6-9 pm/9-7pm
9 am - 4 pm
Eden Prairie Dome
Bluff Creek Elementary
Chan Rec Center
Chaska Community Center
Chan Rec Center
TBA
Augsburg College
Augsburg College
Chan Rec Center
TBA
Blaine National Sports Center
CHAN / CHASKA SOCCER CLUB
RISK MANAGEMENT PROGRAM
The purpose of the program is to protect and provide a safe and healthy environment for the players participating
lin CCSC's in-house soccer leagues and traveling soccer programs.
~BACKGROUND
The United States Youth Soccer Association (USYSA) approved the KidSafe Program in August 1994 to protect
:hildren from sexual, physical, mental and emotional abuse. Part of this progrhm, the USYSA charged each state
~rganization with the responsibility of developing a written program outlining safety guidelines and procedures.
In response to this USYSA requirement, the Minnesota Youth Soccer Association (MYSA) has instituted a Risk
anagement Program. As an affiliate member of the MYSA, CCSC is required by the MYSA to have its own risk
anagement program and to comply with the requirements of the 1W~'SA Risk Management Program.
?lease read the following MWSA Player /Adult Protection Guidelines. CCSC Traveling parents ~vill be asked to
~ign a form acknowledging that they have received a copy of the guidelines before their son/daughter participates
in the league. The Summer 2001 Rec Registration form will also require a signature acknowledging that they have
~lso received a copy of the guidelines. These guidelines will eventually be posted and available to download on the
2CSC website at ~w~v. eteamz.com/ChanChaska.
CHAN / CHASKA SOCCER CLUB (CCSC)
and
MINNESOTA YOUTH SOCCER ASSOCIATION (MYSA)
PLAYER / ADULT PROTECTION GUIDELINES
)EFINITIONS
~or the purposes of this document, we define ADULT as those persons in their roles as coach, assistant coach,
bard member, team manager or volunteer who works with, for or around PLAYERS. This would include anyone
Ider than the age group they are interacting with; for example, a 15-year old assistant coach of an U-11 team
;ould be considered an ADULT for the purposes of these Guidelines.
ILAYER defines all persons who are members of or play on a soccer team. This definition includes those players
iho participate at the U-19 level, even though they may be of legal age. In the example of the 15-year old assis-
int coach; if s/he is also a rostered participant on a U-16 or higher team, that person is also subject to the guide-
nes applicable to a PLAYER.
~UIDELINES
!~ese guidelines recognize that the lines of authority and separation between adults and players must be recog-
~zed and respected. Generally, players are children and as such, deserve special protection. These guidelines pro-
'.de that protection while setting levels of acceptable conduct for adults.
Physical Contact
ho
ADULTS must be aware that any physical contact with PLAYERS can be misinterpreted. Physical
contact should be limited to that necessary and appropriate to teach a skill, treat an injury, or
console or congratulate a player. In the instance of teaching a skill, minimal contact should be
involved and none which places the ADULT in a position of power and/or intimidation; for example,
II.
III.
IV.
B.
taking a PLAYER by the shoulders and physically moving them to another field or body position.
Sexual contact of any kind or type is prohibited between ADULTS and PLAYERS, whether or not
contact is consensual. The exemption to this guideline would be in the event of player/coach
spouses or legally-declared domestic partners.
Social Contact
A.
B.
C.
Do
ADULTS should not socialize or spend time alone with PLAYERS except at games, practices, or
team functions. An ADULT in a one-on-one situation with a PLAYER is general inappropriate.
ADULTS should avoid instances such as driving alone with a non-family PLAYER. However, in the
event that a PLAYER remains on a field waiting for transportation, the ADULT may wait with the
PLAYER on the field to guarantee the PLAYER'S safety and well-being. (ADULTS should stress
with their PLAYERS' parents the responsibility for safe and tir~ely transportation to and from the
field.)
During out-of-town tournaments, a non-parent/custodian ADULT shall not share any sleeping
arrangements with a PLAYER or PLAYERS.
ADULTS should respect the privacy of PLAYERS. If shower or changing room facilities are
available, schedules should be arranged so that ADULTS and PLAYERS have separate use. If
using a changing room, ADULTS should provide privacy for PLAYERS to make necessary
preparations before entering for pre/post-game discussions. In addition, ADULTS should not allow
others to enter except by the expressed wish of the PLAYERS still present.
Health and Well-Being
A,
B.
D.
ADULTS share the responsibility for the PLAYERS' health while at practices, scrimmages, and
games. ADULTS should have PLAYERS' release forms and medical kits with them at all times.
ADULTS are also responsible for seeing that the field conditions are safe for the PLASTERS and
that the field equipment is in good; safe condition prior to the start of any activity.
Head injuries resulting in disorientation should result in a PLA'k~ER remaining out of the game.
ADULTS transporting players must model safe driving techniques and enforce seat belt use with
PLAhq~]RS and other vehicle occupants.
ADULTS need to be aware of signs of neglect and abuse (physical, emotional, or sexual) of the
PLA5q~]RS. Obsem'ations should be reported to the local law enforcement agencst
Language
A,
S.
C.
Offensive and vulgar language by ADULTS or PLAh~RS is unacceptable. ADULTS should model
good communication skills.
Language that is denigrating in nature, content or tone or refers to one's gender, race, national
origin, disability, sexual orientation or religion is unacceptable.
Inappropriate language targeting officials, opponents, or spectators may be grounds for PLAYER
penalties or ADULTS' removal from the game andJor the premises.
Violations
I.
B.
Violations of these guidelines by ADULTS or PLAYERS will subject them to disciplinary actions,
including but not limited to, warnings, sanctions, suspensions or release by the Chan-Chaska
Soccer Club or IX, fY'SA.
Appropriate legal authorities may be called upon based on the nature of the violation.
Anyone witnessing a violation of these guidelines should report the violation to the Risk Manager
Coordinator of the Chan-Chaska Soccer Club (Sue Skulborstad) and to the office of the State Risk
ManagerArice resident of Administration, lXCY'SA.
CITY OF CHANHASSEN
CARVER AND HENNEPIN COUNTIES, MINNESOTA
DATE:
RESOLUTION NO:
MOTION BY:
SECONDED BY:
A RESOLUTION AMENDING PROCEDURES FOR FILLING
COMMISSION VACANCIES
WHEREAS, on January 9, 1995, the Chanhassen City Council adopted Resolution 95-10
establishing Procedures for Filling Commission Vacancies.
NOW, THEREFORE, BE IT RESOLVED that the procedures for filling Commission
appointments be amended as follows:
That an advertisement armouncing the Commission vacancies be place in the official
newspaper twice after the first of the year.
2. The terms for the Commissions will become effective April 1st.
Conmfissions shall interview all new applicants for vacancies. Folloxving the inte~wiew
process, the Commission shall recommend to the City Council their selection(s) for the
vacancy(ies) plus m'o additional candidates, if available.
,
Incumbents xvho are reapplying for their position do not need to be interviewed by the
Conm~ission members and should not be involved in the interviews and selection of their
competitors. They do need to be interviewed by the City Council.
Passed and adopted by the Chanhassen City Council this
day of ,2000.
ATTEST:
Scott A. Botcher, City Manager
Linda Jansen, Mayor
YES NO ABSENT
Office of County Assessor
Angle Johnson
Carver County Government Center
Administration Building
600 East Fourth Street
~ Chaska, Minnesota 55318-2158
CARVER Phone' (952) 361-1960
COUNTY Fax: (952) 361-1959
January 5,2001
Boards of Townships/Cities
Of Carver County
Re: Boards of Review 2001
Enclosed is the proposed list of scheduled meetings for the 2001 Boards of Review. This
year we have scheduled a majority of the local board of review meetings 1 hour prior to your
regular scheduled meeting with the intention of eliminating an e:tra meeting date for the
boards. If there is a conflict, please let me know and we will try to work out an alternative.
Time is short, they have to be finalized by February 15, 2001. If we can move any other
meetings into the 8 a.m. to 4:30 p.m. time frame, let's do it! Any and all of your property
owners could do as v,,ell with a letter if they cannot make the meetings.
If you receive any inquiries, encourage them to call us at the office. Any appeal made to this
office, is presented to you at your own BOR.
The County Board of Review is tentatively scheduled for June 18, beginning at 9 a.m. To
appear at the county meeting, property owners must first appear at the local BOR.
Sincerely,
/ 5' e'~''~ '5.'
,>- 9' :'
- . ~ ,_~.~ ,-",. -, c'
Angela Johnson, SAMA
County Assessor
A~Jt'matiw Actiot'dEqual ORporttmiO' Employer
TENTATIVE
BOARD OF REVIEW SCHEDULE FOR 2001
3 Tuesday 10:00 a.m. Holly~vood Township
7:00 p.m. Hancock Township
4 Wednesday 7:00 p.m. Mayer City
5 Thursday 7:00 p.m. Watertown Township
6 Friday 9:30 a.m. Chaska Township
9 Monday 6:00 p.m. Nonvood Young/unerica City
7:00 p.m. Waconia Townsttip
10 Tuesday 7:00 p.m. Benton Township
12 Thursday 6:30 p.m. San Francisco Township
7:00 p.m. Young America Township
16 Monday 6:00 p.m. Cologne City
6:30 p.m. Ca~.'er City
18 Wednesday 7:00 p.m. New Germany
23 Monday '7:00 p.m. Chanhassen City BOR
'7:00 p.m. Laketown Township
24 Tuesday 6:30 p.m. Hamburg City
26 Thursday 5:30 p.m. Victoria City
MAY
7 Monday 6:30 p.m. Waconia City
7:00 p.m. CtLaska City BOR
14 Monday 7:00 p.m.
6:30 p.m.
Chmthassen Continued Meeting
Dahlgren Township
15 Tuesday 6:00 p.m. Watertown City
7:00 p.m. Camden Tm~nstfip
21 Monday 7100 p.m.
Chaska City Continued Meeting
Monday, June 18, 2001 9:00 a.m. CounB' Board of Equalization
Office of Risk/Emergency Management
Carver County Government Center
Administration Building
600 East Fourth Street
~ Chaska, Minnesota 55318-2158
CARVER Phone (952) 361-1528
COUNTY Fax (952) 361-I536
Date: January 4, 2001
To:
From:
Re:
Cities in Carver County
Townships in Carver County
School Districts in Carver County
Carver County Emergency Management Contacts
Carver County Board of Commissioners (via e-mail)
Carver County Administration (via e-mail)
Carver County Department Heads (via e-mail)
Scott Gerber, Risk/Emergency Management Dire~r_~-//
Recovery from a Disaster Course
Attached is a notice of a very important course-"Long Term Recovery from Disaster". The best time to learn
about the principles of disaster recovery is before it occurs. Professionals in the field of emergency
management have designed this course to help share the lessons learned in responding and recovering from
various Minnesota disasters. So who should attend?
City Manager or County Administrator, Public Information Officer, Planning department representatives,
Attorneys, Business community representatives, Public Safety representatives, Primary community groups,
Social Services representatives, School District representative, Public Works representatives, Utilities
representatives, Finance representative, Housing Industry representatives, Clergy/Interfaith Group
representatives, Economic Development representatives, Community Action Agency representatives
Housing and Redevelopment Authority representatives, Building Inspectors, University of MN Extension
educator's, and others who fill key roles in the local community.
Recovery from disaster is always the responsibility of the local unit of governmeng This is true even when
the event is large enough to warrant assistance from the state or federal governmen~
Although natural disasters cannot be avoided, the reaction to them could be lessened with proper planning. At
the conclusion of this workshop, participants will have a better understanding of the importance of pre-planning
for long-term recovery from disaster, and leave with usable information for putting a plan into place.
Remember: long-term recovery is more complex and expansive than response and involves totally different
expertise.
Please make copies of this letter attd notice attd pass this on to all elected attd appointed officials bt your
_entity and private industrp/bushtess partners itt your community. If you have additional questions, concerns,
or needs, please contact my office at 952-361-1528. Thank you in advance for your efforts in the continuous
improvement in our emergency management programming in Carver County.
Affirmative Actio~t/Equal Opportunio, Employer
Attention Chanhassen Businesses
Receive Chanhassen crime activity updates and prevention
information via e-mail, at no cost.
The Chanhassen Crime Information Nem'ork is a pilot project serving citizens
who work or live in Chanhassen. Alerts and updates will pertain to criminal
activity occun'ing in Chanhassen, or that of surrounding communities, if applicable
to Chanhassen.
The program objectives are to promote communiU~ awareness and assist with
law enforcement efforts.
The Chanhassen Crime Information Network is a free community service program,
provided by the City of Chanhassen Crime Prevention Division and the Carver
County Sheriff's Office.
For questions or comments, contact Beth Hoiseth at 952-937-1900, ext. 155.
Projected Start D~im. .L,~lt~,'~' 3/, 200/
Join by returning this form to:
City of Chanhassen Crime Prevention Division
690 City Center Drive
Chanhassen, MN 55317
or
fax to: 952-934-2524
Business Name:
E-mail Address:
(business or home)
Applicant Name:
Business Address:
Business Phone Number:
Thomas J. Campbell
Roger N. Knutson
Thomas M. Scott
Elliott B. Knetsch
Joel J. Jamnik
CAMPBELL KNUTSON
Professional Association
Attorneys at Law
(651) 452-5000
Fax (651) 452-5550
Direct Dial: (651) 234-6215
E-mail Address: rknutson~_~ck-law, com
January 15, 2001
Andrea McDowell Poehler
Matthew K. Brokl*
John F. Kelly
Matthew J. Foil
Marguerite M. McCarron
Gina M. Brandt
*A~o ~cemed in
Ms. Kate Aanenson
City of Chanhassen
690 City Center Drive, Box 147
Chanhassen, MN 55317
RE: 60-DAY RULE
Dear Kate'
Enclosed is a recent decision on the "60-Day Rule." .The decision holds that you
can't print on an application form that you will be taking an additional sixty days. The
extension notice must be given after the application is filed. The City that lost the case
is asking the Minnesota Supreme Court to review it.
Regards,
RNK:srn
Enclosure
LL KNUTSON~/~
. al Association
Roger N~
CC'
Scott Botcher
Sharmin Al-Jarl
Bob Generous
Suite317 · EagandaleO£ficeCenter · 1380 Corporate Center Curve ° Eagan, MN55121
C1-00-786
STATE OF MINNESOTA
IN COURT OF APPEALS
C1-00-786
Page 1 of 8
American Tower, L.P., a Delaware
limited partnership,
Respondent,
APT Minneapolis, Inc., a Delaware
corporation,
Plaintiff,
VS.
City of Grant,
Appellant.
Filed December 26, 2000
Affirmed
Willis, Judge
Dissenting, Crippen, Judge
Washington County District Court
File No. C900109
Gary A. Van Cleve, Mark D. Christopherson, Larkin, Hoffrnan, Daly & Lindgren, Ltd., 1500 Norwest
Financial Center, 7900 Xerxes Avenue South, Bloomington, MN 55431 (for respondent)
James M. Strommen, Karen R. Cole, Kennedy & Graven, Chtd., 470 Pillsbury Center, 200 South
Sixth Street, Minneapolis, MN 55402 (for appellant)
Considered and decided by Willis, Presiding Judge, Crippen, Judge, and Peterson, Judge.
SYLLABUS
1. Minn. Stat. § 15.99, subd. 2 (1998), which requires municipalities to approve or deny applications
relating to zoning within 60 days, is not preempted by the Telecommunications Act's "reasonable-
period-of-time" provision.
2. A 60-day extension to act under Minn. Stat. § 15.99, subd. 3(f) (1998), is ineffective when a
municipality grants itself the extension before receiving the application to which the extension
purportedly applies.
C1-00-786 Page 2 of 8
OPINION
WILLIS, Judge (Hon. Thomas G. Armstrong, District Court Judge)
The City of Grant appeals from the district court's order granting summary judgment in favor of
American Tower. We affirm.
FACTS
On August 31, 1999, American Tower, a company that constructs telecommunications towers,
submitted an application to the City of Grant for a conditional-use permit (CUP) to build a tower in
Grant. Approximately one month later, the city's planning commission approved the application and
forwarded it to the city council. At its October 1999 meeting, the city council tabled consideration of
American Tower's application. On November 2, 1999, American Tower informed the city that it
considered the application approved because the city had not made a decision within 60 days, as
required by Minn. Stat. § 15.99, subd. 2 (1998). On the same day, after being told of American
Tower's position, the city council convened to discuss American Tower's application. American
Tower's notification notwithstanding, the city moved forward with its review and denied the
application in December 1999.
Minn. Stat. § 15.99, subd. 3 (1998), permits municipalities to extend unilaterally the statutory 60-day
deadline for municipal action for up to an additional 60 days by notifying applicants of an intention to
do so. The city maintains that the application materials sent to American Tower contained such a
notice.
After filing a complaint and a petition for a writ of mandamus, American Tower moved for summary
judgment. The district court granted the motion, reasoning that (a) the Telecommunications Act did
not preempt state law and (b) the city did not abide by the requirements of Minn. Stat. § 15.99. This
appeal followed.
ISSUES
I. Did the district court err in concluding that Minn. Stat. § 15.99, subd. 2 (1998), is not preempted by
the Telecommunications Act?
II. Did the city give effective notice to American Tower of a 60-day extension under Minn. Stat. §
15.99, subd. 3 (1998)?
ANALYSIS
On appeal from summary judgment, a reviewing court considers whether there are any genuine issues
of material fact and whether the district court erred in its application of the law. State by Cooperv.
French, 460 N.W.2d 2, 4 (Minn. 1990). No genuine issue of material fact exists '"[w]here the record
taken as a whole could not lead a rational trier of fact to find for the nonmoving party.'" DLH, Inc. v.
Russ, 566 N.W.2d 60, 69 (Minn. 1997) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 587, 106 S. Ct. 1348, 1356 (1986)). The party resisting summary judgment must do
more than rest on mere averments. Id. at 71. Appellate courts view the evidence in the light most
favorable to the party against whom summary judgment was granted. Fabio v. Bellomo, 504 N.W.2d
C1-00-786 Page 3 of 8
758, 761 (Minn. 1993).
Ie
The city argues that Minn. Stat. § 15.99, subd. 2 (1998), conflicts with the Telecommunications Act
and is therefore preempted. Minn. Stat. § 15.99, subd. 2, provides that a
[municipality] must approve or deny within 60 days a written.request relating to zoning *
· *. Failure * * * to deny a request within 60 days is approval of the request. If[a
municipality] denies the request, it must state in writing the reasons for the denial at the
time that it denies the request.
A municipality may extend this 60-day deadline for up to an additional 60 days if it provides written
notice of the extension to the applicant, stating the reasons for the extension and its anticipated
length. Minn. Stat. § 15.99, subd. 3(f) (1998).
The Telecommunications Act also contains a timeliness requirement:
A state or local government or instrumentality thereof shall act on any request for
authorization to place, construct, or modify personal wireless service facilities within a
reasonable period of time after the request is dulyfiled with such government or
instrumentality, taking into account the nature and scope of such request.
47 U.S.C. § 332(c)(7)(B)(ii) (emphasis added). The Telecommunications Act is intended to create a
national policy framework to accelerate the deployment of telecommunications technology. Virginia
Metronet, Inc. v. £oard of Sut>ervisors, 984 F. Supp. 966, 970 (E.D. Va. 1998). It does so, in part, by
placing certain restrictions upon the authority of local bodies to regulate wireless communications
facilities. Id.
The preemptive effect of a statute is a question of law, subject to de novo review. In re St)eedLimit
for Union _Pac. R.R., 610 N.W.2d 677, 682 (Minn. App. 2000). State laws that interfere with, or are
contrary to, the laws of Congress are invalid. Gibbons v. Ogden, 22 U.S. 1, 211 (1824). If Congress
evinces an intent to occupy a given field, state laws falling within that field are preempted. Silkwood
v. Kerr-McGee Corp., 464 U.S. 238, 248, 104 S. Ct. 615, 621 (1984). But the '"historic police
powers of the [s]tates' are not to be eclipsed unless to do so was 'the clear and manifest purpose of
Congress.'" Dahl v. Charles Schwab & Co., 545 N.W.2d 918, 922 (Minn. 1996) (quoting Rice v.
Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S. Ct. 1146, 1152 (1947)).
Federal law preempts state law when (1) a statute contains an express preemption clause, (2)
preemption can be inferred from the extent of the federal involvement or the scope of the federal
interest in a regulated field, or (3) state law conflicts with federal law. Piko]2 v. £urIington Northern
R.R. Co., 390 N.W.2d 743,748 (Minn. 1986). The city argues that the 60-day time limit under
Minnesota law conflicts with the "reasonable amount of time" called for by federal law and is thus
preempted.
The city argues that 60 days is not a reasonable amount of time to consider an application to construct
a telecommunications tower. In support of this proposition, the city cites cases in which courts have
found reasonable periods longer than 60 days for municipalities to consider applications for permits
to construct telecommunications towers. See, e.g., Virginia Metronet, 984 F. Supp. at 977 (stating
C1-00-786 Page 4 of 8
that 14 months is not per se unreasonable). But the fact that courts have found longer periods
reasonable does not mean that 60 days is unreasonable.
The language and legislative history of the Telecommunications Act, as well as reported cases
addressing the reasonable-time issue, support the view that section 15.99 does not conflict with the
Telecommunications Act and is therefore not preempted. First, the Act preserves the authority of
local governments over zoning matters, providing that
nothing in this chapter shall limit or affect the authority of a State or local government or
instrUmentality thereof over decisions regarding the placement, construction, and
modification of personal wireless service facilities.
47 U.S.C. § 332 (c)(7)(A). Congress has thereby given municipalities latitude in exercising their
police powers in zoning decisions regarding telecommunications towers. See Omnipoint
Communications, Inc. v. Foster Township, 46 F. Supp.2d 396, 401 (M.D. Pa. 1999) (stating that
although Telecommunications Act places certain restrictions on local authorities, it does not preempt
their ability to control zoning decisions regarding telecommunications services). Further, the Act
contains a section captioned "State preemption" that specifically prohibits states and local
governments fi.om regulating the entry of or the rates charged by mobile services. 47 U.S.C. § 332(c)
(3). But that section does not provide that the Act's reasonable-time provision preempts state law
regarding the time within which a unit of local government must act on an application to construct a
telecommunications tower. Id.
The legislative histories of the Telecommunications Act and Minn. Stai.-§ 15.99 also support the
view that the two statutes do not conflict. The conference committee report on the
Telecommunications Act suggests that timeliness issues shoUld be determined at the state level.
[D]ecisions are to be rendered in a reasonable period of time, taking into account the
nature and scope of each request. If a request for placement of a personal wireless service
facility involves a zoning variance * * * the time period for rendering a decision will be
the usualperiod under such circumstances. It is not the intent of this provision to give
preferential treatment to the personal wireless service industry in the processing of
requests, or to subject their request to any but the generally applicable time frames for
zoning decisions.
H.R. Conf. Rep. No. 104-458, at 208 (1996) (emphasis added). Indeed, as one court has noted, "[t]
here is nothing to suggest that Congress, by requiting action 'within a reasonable period of time,'
intended to force local government procedures onto a rigid timetable." Sprint Spectrum, L.P.v. City
of Medina, 924 F. Supp. 1036, 1040 (W.D. Wash. 1996); see also Sprint Spectrum L.P.v. Zoning
Hearing Bd., 43 F. Supp.2d 534, 537 (E.D. Pa. 1999) (interpreting the Telecommunications Act's
reasonable-period-of-time requirement to be congruent with a state statute imposing a 60-day time
limit); Flynn v. Burmah, 30 F. Supp.2d 68, 74 (D. Mass. 1998) (holding that a local commission had
not failed to act on an application within time limit set by state law and, consequently, had not failed
to act within a reasonable time under Telecommunications Act). Thus, under the
Telecommunications Act, state law determines what is a reasonable period of time to act on
applications to build telecommunications towers.
Finally, the Wisconsin Court of Appeals has concluded that the Telecommunication Act's
reasonable-time provision, is intended to "stop local authorities from keeping wireless providers tied
C1-00-786 Page 5 of 8
up in the hearing process." Westel-Milwaukee Co. v. l~alworth Cozmty Park & Plant~i~g Corem'n,
556 N.W.2d 107, 109 (Wis. Ct. App. 1996). This is consistent with the intent of section 15.99:
Minnesota citizens do have the right to receive a response to their requests in a timely
manner and at the same time not be entangled in delays or squabbles * * *
House Floor Debate on H.F. No. 641 (Apr. 12, 1995) (statement of Rep. Brown).
The Minnesota legislature has determined that 60 days is the "usual.period of time" within which a
decision should be made on a CUP application, including an application for a CUP to build a
telecommunications tower, and has provided that, if necessary, a local-government unit may grant
itself an extension of up to an additional 60 days.
Because no genuine issues of material fact exist, we affirm the district court's conclusion that there is
no conflict bet~veen the Telecommunications Act and Minn. Stat. § 15.99 and therefore no
preemption of state law.
II.
The City of Grant next argues that the district court erred in concluding that the city approved
American Tower's application by failing to act within 60 days after receiving it. See Minn. Stat. §
15.99, subd. 2 (stating municipalities must act on zoning application within 60 days or it is deemed
approved). Two provisions of Minn. Stat. § 15.99 allow a municipality to extend its initial 60-day
time limit for acting on a CUP application. The first provides for an extension if an application is
incomplete but requires the municipality to send notice of the incomplete application within 10
business days of its receipt. Minn. Stat. § 15.99, subd. 3(a) (1998). Here, the city did not notify
American Tow~ within 10 days that its application was incomplete.
The statute also provides that
[A municipality] may extend the time limit * * * before the end of the initial 60-day
period by providing written notice of the extension to the applicant. The notification
must state the reasons for the extension and its anticipated length, which may not exceed
60 days unless approved by the applicant.
Minn. Stat. § 15.99, subd. 3(f) (emphasis added).
The city claims that the application it mailed to American Tower contained a notice of extension of
the statutory 60-day time limit because the following statement is printed on the reverse side of all
application forms that the city sends to prospective applicants for CUPs:
You are hereby notified that the City of Grant is hereby extending the time deadlines
required in M.S. section 15.99 with respect to the written request you have made to the
City. The extension is made for an additional sixty (60) days. The reason for the
extension is to enable the City Council and the planning commission to more fully
deliberate with respect to your request and to allow City staff and consultants time to
prepare the necessary findings with respect to the City's ultimate determination. This
timeline does not begin until the application is complete with all required submissions.
C1-00-786 Page 6 of 8
Therefore, the city argues, it complied with the requirements of the statute by (1) giving written
notice of the extension before expiration of the initial 60-day deadline, (2) stating the reasons for the
extension, and (3) indicating the anticipated length of the extension.
The parties disagree over whether section 15.99 allows the city to give notice of an extension of the
60-day time limit before an application is submitted. In interpreting statutes, courts must ascertain
and effectuate the legislature's intent. Minn. Stat. {} 45.16 (1998). Where the legislature's intent is
clearly discernible from plain and unambiguous language, no constiuction is necessary or permitted.
Ed Herman & Sons v. Russell, 535 N.W.2d 803, 806 (Minn. 1995). A court should not construe a
statute to lead to injustice or an absurd result if the language will reasonably permit another
construction. Id. (citing Minn. Stat. § 645.17(1)).
American Tower argues that Minn. Stat § 15.99 does not allow the city to grant itself a full 60-day
extension to act on a CUP application before it receives an application or, for that matter, before it
even sends an application form to a prospective applicant. American Tower reasons that such a
practice renders the 60-day requirement of the statute meaningless and that the city thereby grants
itself an extension to act on an application without knowing if it is necessary.
The city, on the other hand, argues that a literal reading of the statute permits its practice, in that (1)
the city gives written notice of the extension before the end of the initial 60-day period, indeed before
the 60-day period begins; (2) it gives reasons for the extension, although they are generic reasons that
the city claims apply to all applications; and (3) the written notice states the anticipated length of the
extension, which is in all cases the maximum of 60 days. But a literal construction is not to be
adopted if it is contrary to the general policy and object of a statute. In re Reynolds' Estate, 219
Minn. 449, 455, 18 N.W.2d 238,241 (1945).
We agree with American Tower that the city's practice in general, and specifically in this case, makes
the initial 60-day requirement of the statute meaningless. The legislature has stated that
[t]he object of all interpretation and construction of laws is to ascertain and effectuate the
intention of the legislature. Every law shall be construed, if possible, to give effect to all
its provisions.
Minn. Stat. § 645.16 (emphasis added); see also tFillmus ex rel. l~illmus v. Commissioner of
Revenue, 371N.W.2d 210, 213 (Minn. 1985) (stating that "a statute is to be construed as a whole so
as to harmonize and give effect to all of its parts." (citation omitted)). The city's practice would be
wholly consistent with a statute that simply gives municipalities 120 days to act on a CUP
application. Because routine applications can and should be acted on expeditiously, the legislature
intended, in enacting Minn. Stat. § 15.99, to allow an extension of the initial 60-day period only
where there are "extenuating circumstances." Hearing on S.F. No. 647 Before the Senate Comm. on
Governmental Operations and Veterans (Mar. 29, 1995) (statement of Sen. Riveness).
The city cites Manco of Fairmount, Inc. v. Town Br., 583 N.W.2d 293 (Miim. App. 1998), for the
proposition that the requirements of Minn. Stat. § 15.99 are directory, not mandatory. While this
court held in that case that the provision requiring the statement of reasons for an extension is
directory, it also held that the 60-day limit is mandatory. Id. at 295. Further, Manco is distinguishable
from the present case because the township in Manco sent notice of extension after it received the
completed application. Id. at 294-95. Here, the city granted itself an extension even before it sent
C1-00-786 Page 7 of 8
application materials to American Tower.
We conclude that the statutory scheme envisioned and intended by the legislature when it enacted
Minn. Stat. § 15.99 requires a city to act in the normal course on a CUP application within 60 days
after the application is received. If, upon review of an application, the city determines that there are
extenuating circumstances that require an extension of the initial 60-day period to act, it may grant
itself an extension, before the end of the initial period, of up to an additional 60 days by giving the
applicant written notice that describes the extenuating circumstanCes and the anticipated length of the
extension.
We conclude that the city's reading of Minn. Stat. § 15.99 is inconsistent both with the language and
the intent of the statute. We therefore affirm the district court's determination that the city's notice to
American Tower of an extension of time for the city to act was ineffective because it was given
before American Tower submitted its CUP application.
DECISION
The district court did not err in granting summary judgment to American Tower because Minn. Stat.
§ 15.99 is not preempted by the Telecommunications Act and because the city's notice to American
Tower that it was granting itself a 60-day extension was ineffective.
Affirmed.
CRIPPEN, Judge (dissenting)
Because I would not impose on state and local government agencies a rubric that has not been
announced by the legislature, I would reverse the trial court's decision that appellant City of Grant
approved respondent American Tower's application to build a tower in the city.
Upon notice given "before the end" of the initial 60-day period following an application, the
municipality may give itself up to an additional 60 days to investigate, deliberate upon, and decide the
merits of a zoning application. Minn. Stat. § 15.99, subd. 3(f) (1998). The 60-day-extension clause is
meaningless by any interpretation given to it.
In all cases, for any reason, the municipality is free to employ the extension clause. Minn. Stat. §
15.99, subd. 3(f) says nothing to limit the reasons useable in a notice for extension, which may be
specific to the case or generic to the circumstances of the municipality. Moreover, the need to declare
reasons has been counted a direction without a mandate. Manco of Fairmount, Inc. v. Town Bd. of
Rock Dell Towt~shi~, 583 N.W.2d 293,296 (Minn. App. 1998), review denied (Minn. Oct. 20, 1998).
Because the legislature has employed a meaningless limit on the freedom of agencies to employ a
deadline of 120 days rather than 60 days, there are no rules of construction making it reasonable to
suggest that the extension be for circumstances unique to the application as opposed to those that are
generic for the zoning process available in the municipality. It is no more reasonable to suggest that
the notice be given to individual applications after the time of their application as opposed to a notice
effectively given to all prospective applicants.
It is a judicial responsibility to effectuate the legislature's intent. Minn. Stat. § 645.16 (1998). But the
courts cannot manufacture content for statutes without language or history of the enactment that
C1-00-786 Page 8 of 8
makes that intent evident. See id. (requiting regard for the unambiguous language of an enactment,
without pretextual pursuit of its spirit). No doubt the legislature intended that the 60-day extension
should be only for "extenuating circumstances." But it left to municipalities the ~task of determining
which circumstances are extenuating, without limitation. .~
When respondent's application was received, appellant found it necessary to employ a 120-day
approval period in all cases then arising. The legislature has permitted this municipal determination.
If the law is to be otherwise, it is for the legislature, not the courts, to alter the mandate. See Martinco
v. Hastings, 265 Minn. 490, 497, 122 N.W. ld 631,638 ((1963) (stating "[i]fthere is to be a change in
the statute, it must come from the legislature, for the courts cannot supply that which the legislature
purposefully omits or inadvertently overlooks").
Because I see nothing in this statute or its history that gives us the freedom to enlarge the importance
of the initial 60-day approval period or to diminish the freedom of municipalities to extend the period
for 60 additional days, I respectfully dissent from the differing construction of the statute in the
majority opinion. I concur with the majority in its conclusion that state law is not preempted by the
Telecommunications Act.
Return to Opinion Index
Return to ~im~esota Laud'er
Ellio~ B. Kne~sch
Jocl J. J~mnik
MEMORANDUM
TO' Kate Aanenson . - -; ~,r-,o,
FROM'
Valerie Kehrer
DATE'
January 15, 2001
RE' Status of files
The following files were scheduled for pre-trials on Monday, January 8,
2001.
Hazel Pauline Anderson. The vehicle now in compliance, therefore the
charges were dismissed.
Robert Boecker d/b/a RTB Landscaping. Mr. Boecker entered a plea of
guilty which will be continued for dismissal for one year upon the following
conditions:
1. Pay $250.00 prosecution costs;
2. Have no same or similar violations;
3. Remain law abiding;
4. No employee coming and going from the subject property;
5. No more than one (1) Bobcat type vehicle on the subject
property. Must be stored indoors when not in use;
6. Mr. Boecker may commute to and from his home in his personal
truck.
A copy of the Sentencing Order is enclosed for your file.
St~ite 317' * E',~Xan,J~ltc~ Office Cunter * 1.>~u"q-' C~rt,~)r~re Center Curve · E:~!3~n, NIN 551_Vl
Ms. Kate Aanenson
January 15, 2001
Page 2
James Byrne d/b/a JB Landscaping. Mr. Byrne entered a guilty plea which
will be continued for dismissal in one year upon the following conditions:
1. Pay $250.00 prosecution costs;
2. Have no same or similar offenses;
3. Remain law abiding;
4. No employee coming and going from subject property;
5. No more than one (1) Bobcat type vehicle on the subject
property. Must be in indoor storage when not in use;
6. Overnight storage of equipment for jobs on the block will be
considered a violation;
7. Mr. Byrne may commute to and from his home in his personal
truck.
A copy of the Sentencing Order is enclosed for your file.
PATRICK MACKEY
Education
Bachelor of Architecture
Bachelor of Environmental Design
University of Minnesota, College of Architecture &
Landscape Architecture, 1994
Professional Experience
Meyer, Scherer & Rockcas'tle, Ltd. 1998-Present
Cuningham Group Architects 1992-1998
Library Work: Edina Public Library & Senior Center, Edina, MN; Maple Grove-Hennepin County
Library, Maple Grove, MN; Metropolitan State University Community Library & Information
Access Center, Saint Paul, MN; Saint Paul Public Library lnternet Stations, Saint Paul, MN; SELCO
(Southeast Libraries Cooperating), Rochester, MN
Institutional Work: Minneapolis Community/Technical College Remodeling, Minneapolis, MN (with
Cuuiugham Group; Roseville Area High School, Roseville, MN (with Cuningham Group);
Roseville Gymnastics Center, Roseville, MN (with Cuningham Group)
Corporate Work: Andersen Corporation Corporate Conference Center, Bayport, MN; Aspen
Research, White Bear Lake, MN; Epic Systems Corporation Headquarters, Madison, WI (with
Cuningham Group)
Restaurant/Retail Work: Caf6 Odyssey, Bloomington, MN (with Cuui.gham Group)
Honors & Awards
1992
Precast Concrete Institute Design Award - 2® place
Community Service
AIA Minnesota Search for Shelter 1991-1993
Habitat for Humanity
CITYOF
CHAN EN
690 Ci0, Ce,to' D~qve, PO Box I47
Chanhassen, Mimmota 55317
Pl~o,e 612.937.1900
General Fax' 612. 937. 5739
Engi,eoing Fax' 612.937.9152
P, blic SafeO, Far 612. 934.2524
Web wwu: cl. &a,hasse,. 11111. us
MEMORANDUM
TO:
FROM:
Scott Botcher, City Manager
Kate Aanenson, AICP, Community D~velopment Director
DATE:
January l8,2001
SUBJ:
Livable Communities Act
Scott I have some background information on affordable housing for the City
Council to begin to read in preparation of the February 12, 2001 City Council
meeting. I have included the resolution to participate in the LCA as well as
the city's goals. I will be prepared to go through the LCA as well as the city's
goals in greater detail at the meeting.
he C/tv of Cha,hasse,. A o'owi, e co,mm,in, w/th c/ea, lakes, aua/in, schools, a cha,nin.~ downtown, thrivin~ businesses, and beautihd oarks. A ~reat alace to ~ire. work. and
CITY OF CHANHASSEN
CARVER AND HENNEPIN COUNTIES, MINNESOTA
DATE: November 13, 2000
RESOLUTION NO: 2000-84
MOTION BY: Senn
SECONDED BY: Mancino
RESOLUTION ELECTING TO CONTINUE PARTICIPATION IN
THE LOCAL HOUSING INCENTIVES ACCOUNT PROGRAM
UNDER THE METROPOLITAN LIVABLE COMMUNITIES ACT
CALENDAR YEAR 2001
WHEREAS, the Metropolitan Livable Communities Act (Minnesota Statues Section
473.25 to 473.254) establishes a Metropolitan Livable Communities Fund which is intended to
address housing and other development issues facing the metropolitan area defined by Minnesota
Statutes section 473.121; and
WHEREAS, the Metropohtan Livable Communities Fund, comprising the Tax Base
Revitalization Account, the Livable Communities Demonstration Account, the Local Housing
Incentive Account, and the Inclusionary Housing Account is intended to provide certain funding
and other assistance to metropolitan area municipalities; and
WHEREAS, a metropolitan area municipality is not eligible to receive grants or loans
under the Metropolitan Livable Communities Fund or eligible to receive certain Polluted sites
cleanup funding fi'om the Minnesota Department of Trade and Economic Development unless
the municipality is participating in the Local Housing Incentives Account Program under the
Minnesota Statues section 473.254; and
WHEREAS, the Metropolitan Livable Communities Act requires the Metropolitan
Council to negotiate with each municipality to establish affordable and life-cycling housing goals
for that municipality that are consistent with and promote the policies of the Metropolitan
Council as provided in the adopted Metropolitan Development Guide; and
WHEREAS, each municipality must identify to the Metropolitan Council the actions the
municipality plans to take to meet the established housing goals through preparation of the
Housing Action Plan; and
WHEREAS, the Metropolitan Council adopted, by resolution after a public hearing,
negotiated affordable and life-cycle housing goals for each participating municipality; and
WHEREAS, a metropolitan area municipality which elects to participate in the Local
Housing Incentives Account Program must do so by November 15 of each year; and
WHEREAS, for calendar year 2001, a metropolitan area municipality that participated in
the Local Housing Incentive Account Program during the calendar year 2000, can continue to
participate under Minnesota Statues section 473.254 if: (a) the municipality elects to participate
in the Local Housing Incentives Program by November 15, 2000; and (b) the Metropolitan
Council and the municipality have successfully negotiated affordable and life-cycle housing
goals for the municipality.
NOW, THEREFORE, BE IT RESOLVED that the City of Chanhassen hereby elects to
participate ill the Local Housing Incentives Program under the Metropolitan LiVable
Communities Act during the calendar year 2001.
Passed and adopted by the Chanhassen City Council this 13th day of November, 2000.
ATTEST:
/ /
Scott Botcher, City Clerk/Manager
YES
NO
-ABSENT
Mancino
Jansen
Labatt
Senn
Nolle
None
Table 2-3
Affordability
Ownership
Rental
Life-Cycle
Type (non-single
family detached)
Owner/Renter Mix
Density
Sin§le Family
Detached
Multi-family
Overall Average
For New Construction
Livable Communities Act
CiTY INDEX BENCHMARK
GOAL
37% 60-69% 30%~
44% 35-37% 35% ~
19% 35-37%
34%
1991 Comp
Plan
85/15% 67-75 / 25-33% 80-90 / 20-10
1.5/a cre 1.8-1.9/a cre 1.8
11/acre 10-14/acre 9-10
3.3
COMPREHENSIVE PLAN 1998
HOUSING
Chapter 2
INTRODUCTION
A community is made up of its residents,
businesses and institutions sharing a common
history or common social, economic, and political
interests. One of the primary purposes of a
community is to serve as a place of residence for
its citizens. Assuming this charge, offering a mix of
life cycle housing opportunities becomes a
challenge for local governments. Within the City
of Chanhassen, residential structures constitute
the largest single use of land. Since residential
development plays such a prominent role in the
overall character of Chanhassen, its successful
design and development are essential both
functionally and aesthetically.
Attention to design in the process of developing
and constructing housing units is essential.
Development, whether commercial, industrial, or
residential, is long-term both economically and
physically. Since development is permanent and
usually irreversible, the effects of substandard or
poorly located facilities will be evident for a long
time. Therefore, both the developer and the city
must be aware of natural, physical, and social
constraints and the potential long-term effects of a
project. Only by paying attention to such detail in
the early stages of development can facilities be
constructed which are functional and aesthetic
both today and in the future.
A number of factors help determine whether a
development is successful or not. One of the main
determinants is the amount of attention paid to
environmental and conservation issues. The
Urban Land Institute recommends the following
factors be incorporated in the design process:
o
Selecting open space with regard to
enhancing the natural characteristics of the
land such as vegetation or a body of water.
,
Devising mechanisms to protect natural beauty
while at the same time reserving certain areas
for recreational use.
o
Designing storm drainage facilities as an
integral part of the development plan with an
effort made to locate open space near natural
drainageways.
.
Planting vegetation, if the land is devoid of it, in
order to foster temperature and sound control,
and clean air. Maintaining such vegetation by
creating a perpetual organization to take care
of open space, as mandated by restrictive
covenants.
,
Preventing erosion in areas with steep grades
and those susceptible to erosion. Ensuring
that in the future this land is used for purposes
consistent with the preservation of open space.
o
Designing drainage systems to minimize the
possibility of soil erosion, siltation, and damage
due to flooding.
.
Keeping in mind the PUD principle clearly offers
a framework for good design, environmental
concerns, and energy conservation through the
cluster concept. Further, energy inefficient
development patterns are outmoded and add to
the cost of housing.
8. Applying good housekeeping practice to
construction as well as the finished product.
,
Being aware of water and air contamination,
land despoilment, erosion and noise during
construction.
In addition to these items, other elements such as
noise, access, surrounding land uses and the
mitigation of incompatible land use patterns are
also applicable. These criteria, as well as those
regarding corridor design standards, are
components of the Chanhassen Planning
Commission's and City Council's review of all
development proposals and particularly those
involving housing, since housing is the major use
of land within the city.
The housing section of the comprehensive plan will
present and analyze existing housing
characteristics, discuss obstacles to the provision
of adequate life-cycle housing, project future
COMPREHENSIVE PLAN
housing needs, and suggest policies to meet city
housing goals.
EXISTING HOUSING
Since 1991, the citY has seen a change in the
character and type of housing being constructed in
the community. While single family detached
housing continues to be the predominant type of
housing in the city (78% of the housing stock as of
January, 1997), the city is seeing a greater variety
of housing types being proposed and constructed.
In 1995, there were more building permits issued
for single family attached housing (262 units) than
for single family detached (216 units). Due to
changing demographics and the aging of the
population, the city anticipates that residential units
other than traditional single family detached
housing will increase its proportion of the total
housing stock. Since 1983, when development in
the city began to accelerate, the city has averaged
approximately 275 residential building permits
annually. The housing stock consists of
predominately single family detached housing with
an estimated 5,103 units representing 77 percent
of the total housing stock and an estimated 1,505
units of other types of housing representing 23
percent of the housing units as of April, 1998.
HOUSING TENURE
80 0% ................................................................. j .
70.0%
£0.0'%
50.~
40.0%
30.0%
20.0~.'.
10.0%
0.0%
198)
S c, EA .SO,~s, L VACANT
...........
Figure 2-1
Comparison of census data for 1970, 1980 and
1990 provides an overview of changes in
Chanhassen's housing. Between 1970 and 1980,
total housing units increased from 1,454 units to
2,285 units, representing a 57 percent increase or
831 units. Between 1980 and 1990, total housing
units increased from 2,285 units to 4,249 units,
representing a 86 percent increase or 1,964 units.
The city estimates an increase of an additional
2,085 units through April of 1997 for an increase of
49 percent over seven years.
1998
As Figure 2-1 shows,'h'ousing ownership continues
to be the predominant occupancy type in the
community. In 1970, 984 of 1,454 units, or
approximately 68 percent of homes, were owner
occupied. By 1990, 3,400 of 4,249 units, 80
percent of the housing stock, were owner occupied.
In 1997, the city estimates that 5,632 of 6,334 units
or 89 percent of housing is owner occupied. As
demographic chan~es occur in the community and
society at large, the city matures, and more diverse
development is undertaken, however, this number
should decline again.
1997 HOMESTEAD VALUATION
$0-
$75,0OO
$75,001 -
$250,000+
$200,001-
$250,000 ~
$150 001 -~',~ t / t115'001 -
,~'' ~ $150,000
$200,000
Figure 2-2
The median value of owner occupied housing has
steadily increased. In 1970, the median value was
$38,000. In 1980, the median value had increased
to $84,700. By 1990, the median value was
$124,400. Based on a Carver County Housing
Study completed in December, 1996, the estimated
median value of owner occupied housing in
Chanhassen was $140,597. In 1997, city building
permit records recorded an average building permit
valuation for housing in the community at $159,812
with average building permit valuation for single
family detached housing at $163,626. Though not
as spectacular as the increase in owner occupied
housing values, median rental rates have steadily
risen since 1970 increasing 233 percent from $134
to $446 per month in 20 years. Based on the
Carver County Housing, the estimated rental rates
ranged from $345 to $895 per month in 1996.
In 1996, there were 13 subsidized housing units in
the City of Chanhassen. Twelve were rental
assistance and one was first time home buyer
22
COMPREHENSIVE PLAN 1998
training and lending. In 1997, an additional 65
rental dwelling units were added in the community
through assistance from Carver County and the
City of Chanhassen. In 1998, an additional 35
ownership dwelling units will be developed through
the use of Housing Tax Increment Financing
assistance from the city. As additional development
opportunities occur and government assistance is
available, more dwelling units will be assisted.
POPULATION
Chanhassen continues to be a relatively young
community. Using 1990 census data, approximately
80 percent of the population was under 45 years of
age. While the age of the population will continue
to rise with the aging of baby boomers, the city will
have a significantly younger population than more
established communities. Median age in 1990 was
30.5 years in Chanhassen. Due to the large
number of people in the prime child bearing years
(25 - 44), the persons per household continues to
be relatively high at an estimated 2.93 persons per
unit in 1995. The persons per household in 1980
was 3.04 and 2.92 in 1990. Since the predominant
type of housing unit is and will continue to be single
family detached homes, the city can anticipate
maintaining a relatively high persons per household
throughout the next 20 years. The city projects that
in 2020 the persons per household will be 2.65.
Age DIstribution
Figure 2-3
Between 1980 and 1990, the age cohort under five
increased 177 percent (858 persons) from 495 to
1,343. The cohort between 25 and 44 increased
132 percent (2,856 persons) between 1980 and
1990 from 2,160 to 5,016. This increase
represents the numerically largest increase in the
community. The age cohort of empty nesters,
those between 45 and 64 increased 66 percent
(249 persons) from 378 to 627 between 1980 and
1990. Finally, residents 65 and older increased 44
,'
percent (138 persons) from 314 to 452 between
1980 and 1990. Total population increased 5,373
persons or 84 percent from 6,359 to 11,732 while
housing units increased by 1,964 units (86 percent)
from 2,285 to 4,249 units during this period.
The City of Chanhassen provides a wide range of
housing styles in a: variety of densities. As seen in
Table 2-6, residential development statistics,
between 1993 and 1997, residential development in
the city has been very diverse. Single family
detached subdivisions have averaged a net density
of 1.92 units per acres over the last four years.
Multi-family developments during this period have
averaged a net density of 6.41 units per acre.
Overall, the community has averaged a net density
of 2.85 units per acre.
RESIDENTIAL LANDS
The city has four primary residential land uses. In
keeping with the rural heritage of the community,_
there are areas of large lot residential development
that permit a minimum lot size of 2.5 acres per
units. However, in compliance with an agreement
between the city and the Metropolitan Council for
MUSA expansion in 1991, land outside the MUSA
line that is not currently developed, must maintain a
minimum density of one unit per ten acres.
The predominate land use in the city has been
residential Iow density which permits a housing
density between one and four units per acre. In
1996, there was a total of 4,502 dwelling units on
2,955 net acres. This represents a net density of
1.52 units per acre. The city estimates there
remains approximately 2,563 net acres of
residential Iow density land for future development.
This equals between 4,555 and 5,844 additional
residential units on residential Iow density land
(see Table 2-5).
One of two multi-family land uses in the city is
residential medium density, which permits between
four and eight dwelling units per net acres. The city
has approximately 362 net acres of vacant medium
density land. The second multi-family land use is
high density residential land which permits between
eight and 16 units per net acre. The city has
approximately 96 net acres of vacant high density
land. In 1996, there were a total of 1,412 multi-
family dwelling units on 664 net acres. The city
COMPREHENSIVE PLAN 1998
projects an additional 3,179 multi-family units will be
developed. Overall, the city estimates a net density
of 2.13 units per acre for all residential
development in the community.
The city's housing stock is relatively young.
Approximately 81 percent of all housing in the city
has been built since 1970. In addition,
approximately 74 percent of ownership housing
and 63 percent of the rental housing in the city has
been built since 1970.
Age of Housing Stock Table 2-1
Own (Percentage) Rent (Percentage)
1939< 141 (2%) 51 (0.8%)
1940-1969 812 (13%) 206 (3%)
1970-1989 2,475 (39%) 331 (5%)
1990-1997 2,204 (35%) 114 (2%)
Total 5,632 (89%) 702 (11%)
Source: 1990 Census; Metropolitan Council
Building Permit Trend, Carver County Housing
Study; City of Chanhassen Building Permits
through January 1997
Chanhassen does not have any significant
concentration of substandard housing. This is due,
in part, to the newness of the housing stock. In
addition, the high home values may also play a role
in the condition of housing stock since homeowners
have a strong financial incentive to maintain and
improve their homes. If any area in the community
were to be identified as a potential area for having
some substandard housing, it may be the area in
Carver Beach which was originally platted for small
lots to accommodate seasonal cabins.
While the city has no recent information on vacancy
rates in the community, the city assumes the
vacancy rate is 5 percent for all population and
household estimates. The 1990 census showed a
vacancy rate of 5.5 percent. Based on the 1996
Carver County Housing Study and anecdotal
information, there are few rental vacancies.
HOUSING DEMAND
The city anticipates continued strong housing
demand and development. Compared to
surrounding communities, especially cities located
to the north and east' in Hennepin County, the city
has significant development potential. Based on
preliminary forecasts of population, households
and employment prepared by the Metropolitan
Council in October 1996, in 1995, the city was at
44 percent of its build-out population, 38 percent
of its households, and 62 percent of its potential
employment. As communities to the east continue
to fill, there will be an even greater influx of
development in Chanhassen.
POPULATION HOUSEHOLDS EMPLOYMENT
CITY
PERCENTAGE PERCENTAGE PERCENTAGE
Carver Co, 56 50 68
Chanhassen 44 38 62
Chaska 60 42 82
Victoria 41 36 50
Hennepin Co. 87 84 83
Eden Prairie 77 65 73
Excelsior 105 92 94
Chanhassen NA NA 52
Minnetonka 99 89 72
Shorewood 93 79 48
Source: Metropolitan Council, Preliminary Forecasts of Population,
Households and Employment, October 1996. Table 2-2
LIFE CYCLE HOUSING
The city is committed to providing a variety of
housing styles with housing available for people of
all income levels to meet the life cycle housing
needs of Chanhassen residents, including
traditional single !amily detached housing, zero lot
line and clustered single family housing,
townhouses, apartments, condominiums. The city
projects there will be approximately a two-thirds to
one-third split between single family detached
housing and other types of housing units. At
build-out, the city estimates there will be between
13,000 and 15,000 dwelling units.
Housing Units
18.000 ;
16.000 -
12,000 . ~ 6% HOUSING GROI"VTH
10,O30 - --~-- 5.~% HOUSING GROW'tH
~ -- AVERAGE HOUSING, GRO?/'rH
8.630 -
6.0~ -
r.~...~...-
1970 1959 1§35 1993 1995 2~3-3 2005 2010 2015 2020
24
COMPREHENSIVE PLAN 1998
While committed to providing life cycle housing, the
city must overcome obstacles to their development.
One of the most difficult impediments to providing
one facet of life cycle housing and/or affordable
housing, is land costs. Without the outright
purchase of land' by public bodies, the only way to
moderate land acquisition costs is to assure that an
adequate amount of land is available within the
urban services area to alleviate real or perceived
shortages of developable land. Another
impediment to life cycle housing is the fear of the
unknown by existing residents. To overcome this,
the city must educate citizens about the different
housing opportunities available. In addition, the
city must work with business groups and
organizations to show the benefits of providing
housing diversity. Developers must be brought in
as partners in providing life cycle housing. With
changing demographics, it will become easier to
convince the developers that life cycle housing is
marketable. Finally, land development costs must
be brought down. To do this, the review process
must be streamlined, local, regional, and state fees
must be reduced, and development must utilize
existing infrastructure investments more efficiently.
In addition, the city will provide density bonuses in
order to promote the provision of affordable
housing opportunities that may otherwise not occur.
Table 2-5 and Figures 2-4 and 2-5 provide the
city's analysis of the residential potential within the
community. The city estimates the following gross
acres for the different land uses: 5,615 acres of
Iow density guided lands, 562 acres of medium
density guided land, and 202 acres of high density
guided land vacant within the community. Of this
amount, there were 3,021 net acres of developable
residential land within the community, as of January
1997 (2,530 acres of Iow density, 362 acres of
medium density, and 96 acres of high density). The
city assumed single family lands contained 15
percent right-of-way and 30 percent open spaces
including parks, bluffs, flood plains, wetlands and
undevelopable land. Medium density and high
density lands assume 10 percent right-of-way and
30 percent open spaces including parks, bluffs,
flood plains, wetlands and undevelopable land.
To project future housing, assumptions of various
densities for the land uses must be made. For Iow
density residential, the city assumed a range of
housing would be developed. Using historical
development data, the city estimates for scenario B
a net density of 1.8 uhits per acre as one end of
the density range. However, city code would permit
up to 2.9 units per acre. As a compromise, the city
estimated for scenario A a net density of 2.42 units
per acre, which represents lot areas of 18,000
square feet, as the other end of the density range.
This equates to between 5,844 and 4,555 single
family units. In order to attempt to meet the higher
projections, the city will need to encourage
development of single family homes at the higher
end of the permitted density range. However, in
order to protect the character of existing
neighborhoods, the city will need to transition
density within new developments, preserving the
expectations and investments of existing residents.
Medium density housing is projected assuming 6
units per acre. High density housing is projected
assuming 10 units per acre. This represents an
addition of 3,179 multi-family dwellings in the
community. Included in multi-family housing are
townhouse developments, apartments,
condominiums, and other types of attached 'housing
units. Additional multi-family housing could be
included as part of mixed use developments.
However, with little historical evidence to base
assumptions upon, the city will not attempt to
project the number of units that will be developed in
these areas.
Table 2-3 CITY INDEX BENCHMARK
Affordability
Ownership 37% 60-69%
Rental 44% 35-37%
Life-Cycle
Type (non-single 19% 35-37%
family detached)
Owner/Renter Mix 85/15% 67-75 / 25-33%
Density
Single Family 1.5/acre 1.8-1.9/acre
Detached
Multi-family 11/acre 10-14/acre
Overall Average
GOAL
30%
35%
34%
1991 Comp
Plan
80-90 / 20-10
1.8
9-10
3.3
The city projects that approximately 56 percent of
the future housing will be built within the existing
MUSA boundaries and 44 percent will be in the
MUSA expansion area. Overall approximately 75
percent of all housing will be inside the existing
MUSA boundary and 25. percent will be in the
MUSA expansion area.
COMPREHENSIVE PLAN 1998
The City of Chanhassen supports:
.
A balanced housing supply, with housing
available for people of all income levels.
.
The accommodation of all racial and ethnic
groups in the purchase, sale, rental and
location of housing within the community.
o
A variety of housing types for people in all
stages of the life-cycle.
,
A community of well maintained housing
and neighborhoods, including ownership
and rental housing.
o
Housing development that respects the
natural environment of the community while
striving to accommodate the need for a
variety of housing types and costs.
.
The availability of a full range of services
and facilities for its residents, and the
improvement of access to a linkage
between housing and employment.
GOALS
To carry out the above housing principles, the City
of Chanhassen has agreed to use the benchmark
indicators for communities of similar location and
stage of development as affordable and life cycle
housing goals for the period of 1996 to 2010, and
to make its best efforts, given market conditions
and source availability, to remain within or make
progress toward these benchmarks.
The City of Chanhassen reserves the right
to re-negotiate the goals.
Chanhassen agrees that the MetroPolitan
Council will use other market indicators to
evaluate goals. These indicators may
include land prices, interest rates, cost of
construction, and environmental factors
including tre. es and wetlands.
To achieve the above goals, the City of
Chanhassen elected to participate in the
Metropolitan Livable Communities Act Local
Housing Incentives Program and has prepared and
submitted a plan to the Metropolitan Council
indicating the actions it will take to carry out the
above goals. Table 2-4 provides an analysis of the
number and types of units necessary to meet life
cycle and affordable housing targets. The city has
assumed that affordable housing can only be met
within multi-family development due to high land
and development costs in the community. While the
continuation of recent development patterns is a
reasonable assumption, the city's target goes
beyond this number and will require significant
effort and innovation on the city's part.
HOUSING STRATEGY
In 1995, more non-single family residential permits
were issued than detached single family permits.
Of the residential land area in the MUSA, a large
portion is guided for medium or high density
development. The city has worked with Carver
County to provide a 65 unit Senior Housing project
with 39 units in the rental affordable range. The
City Council has approved the creation of a tax
increment district to provide assistance to 35 of 76
26
COMPREHENSIVE PLAN 1998
single family detached units. Price ranges for 35
units will be from $88,000 to $120,000. Through
growth and natural maturation, the city is
experiencing housing diversity.
Livable Communities Table 2-4'
Single Multi- Owned Owned & Rental Rental &
Family Family Affordable Affordable
1990 3,367 882 3,612 1,336 637 280
1996 4,926 1,408 5,632 1,636 702 319
2020 9,427 4,590 12,660 3,800 1,407 492
Recent approved developments will achieve the following goals:
Project Units Affordable Units % Affordable
Walnut Grove 247 128 52%
North Bay 76 35 46%
Autumn Ridge 140 82 59%
Total 483 245 53%
If the city were to maintain the same ralion ol affodable units for all future multi-family
development, we would add 1,684 affordable units to the housing stock.
Total new units 7,733
Total multi-family units 3,178
53% multi-family units 1,684
This would lead to a total affordable ownership housing of 3.320 units. Staff is proposing a goal of
30% affordable ownership housing which would require 3,800 additional affordable units. A little
more than double the existing affordable ownership housing. Staff is also proposing the goal for
rental housing be reduced to 10%, which would require the doubling of the existing rental housing.
The goal for affordable rental units would remain at 35%. requiring a total of 492 affordable units,
which is an increase of t 73 units.
Action Plan
The city will continue to uphold the housing goals
and policies of the comprehensive plan. In
addition, the city will pursue other resources for
providing life cycle and affordable housing.
Following is the proposed action plan. Currently,
the city is also pursuing a clustering project with
Southwest Metro, Eden Prairie and Chaska. This
project would be a mixed use development with a
transit component (park and ride facility). The city
is also working on a 60 acre mixed use project,
Villages on the Ponds, which also has a transit
component with commercial, office, and institutional
with residential integrated into the development.
Both projects have a strong mass transit
component.
1980 HOUSING TYPES
[] SINGLE
l i FA MJLY
DETACHED
[] DUPLEX,
~ TOWNHOUSE
i MULTI-
FAMILY
1990 HOUSING TYPES
'[] SINGLE
FAMILY
DETACHED
[] DUPLEX,
TOWNHOUSE
MULTI-
FA~LY
.....
2000 HOUSING TYPES
[] SINGLE
FA MILY
DETACHED
[] DUPLEX,
TOWNHOUSE
MULTI-
FAMILY
2010 HOUSING TYPES
[] S~K~LE
FA MILY
DETACHED
DUPLEX,
TOWNHOUSE
MULTI-
FAMILY
2020 HOUSING TYPES
[] S~3LE
FA MILY
DETACHED
[] DUPLEX,
TOWNHOUSE
MULTI-
FA MILY
Figure 2-5
0'7
COMPREHENSIVE PLAN 1998
City Ordinances
The following are possible actions the city should
undertake to pursue life cycle affordable housing:
Promote life cycle compatible with existing
housing.
Review city ordinance regulations,
especially the PUD ordinance and lot size/
zero lot and design standard including
street widths.
Pursue the upper limits of zoning on new
proposals where there is a density range.
Require a percentage of medium and high
density to have a number of affordable
units.
Provide for mixed use projects with a transit
component.
City EDA
The city, through the Economic Development
Authority, will explore all avenues for financing
affordable housing, including tax-exempt and tax-
increment financing.
Carver County HRA
1. Development, Affordable Financing, Down
Payment Assistance, Home Buyer Education and
Foreclosure Prevention
2. The HRA has the experience to develop
affordable single family housing and is prepared to
offer all cities in Carver County its expertise and
assistance.
3. The HRA offers first time home buyer
funding through participating lenders in Carver
County. The program is funded by mortgage
revenue bonds from the HRA's bonding allocation.
4. The HRA offers home buyer education and
certification to all Carver County residents.
5. The HRA offers foreclosure prevention
counseling and financial assistance to all Carver
County residents.
Homeowner Rehabilitation
The HRA currently administers the following
programs in Carver County:
MHFA Fix-Up Fund · Maximum gross income $41,000
· Maximum loan amount $15,000
· 15 yr. Term, Interest rate 2-8%
· Credit and repayment ability analyzed
MHFA Accessibility Improvement Loans · Maximum income: no limit
· Maximum loan amount $25,000
· 20 yr. Term, Interest rate 8%
· Accessibility improvements only
MHFA Home Energy Loans · Maximum income: no limit
· Maximum loan amount $5,000
· 5 yr. Term, Interest rate 8%
· Energy improvements only
MHFA Mobile Home Loans · Maximum income: no limit
· Maximum loan amount $5,000
· 5 yr. Term, Interest rate 8%,
· Energy improvements only
MHFA 3% Revolving Rehabilitation Loans · Maximum income: $18,000 adj.
· Maximum loan amount $10,000
· 15 yr. Term, Interest rate 3%
· Repayment ability (not credit)
analyzed
MHFA Deferred Loans
· Maximum income: $10,000 adj.
· Maximum loan amount $10,000
· Interest rate 0%, Deferred 10 year
loan
MHFA Deferred Accessibility Loans
· Maximum income: $18,000 adj.
· Maximum loan amount $10,000
· Interest rate 0%, Deferred 10 year
loan
· Accessibility improvements only
28
COMPREHENSIVE PLAN 1998
Carver County HRA Home Improvement Loans
· Maximum income: no limit
· Maximum loan amount $5,000
· Interest rate 3-9%
· Term to commensurate with repayment
ability
RENTAL HOUSING
New Construction
The Carver County HRA assisted in the
formation of the Carver County Housing
Development Corporation, a non-profit
entity with the ability to partner with private
developers to create affordable housing
projects and developments.
A n ticipa ted Action:
The EDA, in conjunction with the City of
Chanhassen, will explore the feasibility and
funding opportunities available for housing
development upon the city's request.
II. Tenant Based Subsidy
Section 8 Rent Assistance Program
Metropolitan Council HRA
MHFA Rental Assistance for Family
Stabilization (RAFS)
Carver County Transitional Housing
Carver County HRA Rental Inventory
Rental Rehabilitation Grants and Loans
Community Development Block Grant (CDBG)
Carver County completed a Housing Condition
Study. The city will pursue using CDBG funds from
Hennepin County to make housing rehabilitation
loans. The city will pursue CDBG funding for
acquisition and related infrastructure for multi-
family projects.
Minnesota Housing Finance Agency
The city will pursue programs, including grants,
loans and federal tax credits, for housing
assistance development and rehabilitation including
the following programs:
Minnesota Mortgage Program
·
·
Homeownership Assistance Fund
Purchase Plus Program
Partnership for Affordable Housing
Entry Cost Homeownership Program
(ECHO)
Low Income Housing Tax Credit Program
New Construction Tax Credit Mortgage/
Builder~ Loans
Low and Moderate Income Rental Program
Deferred Loan Program
Revolving Loan Program
Great Minnesota Fix-up Fund
Mortgage Revenue Bonds
Mortgage Credit Certificates (MCC's)
:: il, ' .
Action Responsibili~ Funding
Review City City staff, Planning None
ordinances Commission and
City Council
Explore all options
for a variety of
affordable housing
opportunities
City staff, Planning
Commission and
City Council
CDBG, City
EDA, Carver Co.
HRA, Metropolitan
Council, MN
Housing
Finance
Educate developers
and residents about
life cycle housing
City staff, Planning
Commission, City
Council and HRA
None
Cooperate with
other governmental
units in providing
housing
opportunities
Southwest Metro,
Carver County HRA
Carver Co.
HRA, Met
Council,
MN Housing
Finance
Property and code
enforcement or
maintenance and
rehabilitation of
housing
City staff
City EDA,
Carver Co HRA,
C, DBG
COMPREHENSIVE PLAN 1998
Look for opportunities City staff, Planning City EDA,
for mixed use Commission and Carver Co.
developments with City Council HRA,
mass transit Met Council,
component MN Housing
Finance
The city is working on the affordable housing
strategy on several fronts. We are working to
encourage development of the properties that are
currently zoned for medium or high density to
provide a variety of housing opportunities. Carver
County is looking to develop another project in the
city. Their other project, the Senior Housing, has
all units leased. There will be other opportunities
to provide sewer and water with additional phases
of the Bluff Creek Interceptor, which should provide
opportunities for a variety of housing types. There
are a few development projects that are taking
shape which may require rezoning or
comprehensive plan amendments.
Carver County is completing a housing condition
study. This study will provide the city with data on
housing that may be deteriorating. The purpose of
this information is to discover if the city has the
ability to seek CDBG money for rehabilitating
homes for the year 1997-1998. Maintaining the
existing housing stock is another housing goal.
HOUSING GOAL
To provide housing opportunities for all residents,
consistent with the identified community
development goal.
POLICIES
Existing housing within the city should be
maintained and improved and revitalization of older
developed areas should be encouraged.
As state and federal funding permits, efforts should
be made to provide Iow and moderate housing
where needed, to provide balance to the generally
high cost of new housing. New construction
programs may provide a source of such housing.
Plans and ordinances for the City of Chanhassen
should ensure that adequate amounts of land are
designated to accommodate projected residential
growth.
The city should promote the use of state and
federal programs designed to reduce land costs for
developers of Iow and moderate income housing.
The City of Chanhassen will cooperate with other
governmental units and public agencies to
streamline, simplify, and coordinate the reviews
required for residential development to avoid
inflating the cost of'housing due to unnecessary
delays in the review process.
In order to encourage the development of
affordable housing, the City of Ohanhassen may
increase the permitted net density of a project by
25 percent. The "bonus" units must meet
affordable housing criteria as defined by the city.
Developers shall be required to enter into an
agreement ensuring the affordability of the units.
Subsidized housing should be given equal site and
planning considerations to non-subsidized housing
units and should not be placed in inferior locations
or in areas that are not provided with necessary
urban services.
If demand becomes apparent, the city will promote
the construction of senior citizen housing in
locations convenient to shopping and medical
services.
The development of alternative types of housing
such as patio homes, townhouses, and quadplexes
should be permitted to supplement conventional
single-family homes and apartments providing that
they are compatible with appropriate land use
practices and are representative of high quality
development.
New residential development shall be discouraged
from encroaching upon vital natural resources or
physical features that perform essential protection
functions in their natural state.
Housing development methods, such as PUD's,
cluster development, and innovative site plans and
building types, should be encouraged to help
conserve energy and resources used for housing.
Property and code enforcement policies which
encouraged the maintenance and rehabilitation of
both owner occupied and rental housing should be
encouraged.
3O
COMPREHENSIVE PLAN 1998
The city should continue to ensure
nondiscrimination in the sale and rental of housing
units.
Citizen participation in developing plans and
implementing housing programs is encouraged in
redevelopment, rehabilitation, and in the planning
for future housing.
Where housing density is given by a range in the
comprehensive plan, the city shall encourage
development at the upper end of the density range.
The city will promote the mixing of housing densities
within projects in order to provide a wide range of
housing styles and types. Such mixed densities
must provide appropriate transitions from existing
development.
The city will continue to participate in the
implementation of the Livable Communities Act of
1995 as stated in the golas and policies.
The city will promote the integration of life cycle
housing opportunities throughout the community.
Affordable and subsidized housing shall not be
overly concentrated in one area of the city.
T~.ble 2-5
;"~"~-~i~-~'- ~'~"~-- ONr~"~-~U~'~'~-"~'~'~) .....................................................
...................... ~ ...................................................................... ~'~'~'~'"~'~"~ .................. -o-~'ii~ ...............................
E~STING MUSA 1991 (VACANT LAND)
Net Acres Units A Units B
~ M ulti-Fam ily ~ 179 1,496 1.495
.................. ~ ................................................... :~ ............................................................
~ fSubtotal ~ 1,756 5,312 4,334
.............................................................. ................................ ..............................
,:--~--O~--A.-.-~-~-~-~-g-i~O-h---~-~ ........... ~ ............................. ~ ..................................... ~ ........................................
......................... ~ ................................................................... ~.
~ ~ot Acros Units ~ Units B
................ ~Si'h'¢'~'"~'[i9 ....................... 83S ...... ~;724 ........... ~";'~i-~ .....
.................... ..... ...................
~IOI~[S ~' .................. ~: ..................... ~et Acres~ UnitS"~ ......... U'n~t'S"g .....
~' ....... ~Si'n~la Fa~'~i9 ....... ~ 5~37~ ........ 10','o~2'.~..~.'-.~..9~,057~.~'
.... :~Uiti-~a~i~9 ...... ~ .... ¥;6~" 4,so~ 4,s~o
.............. ~ .......... IO/~'~ : ¢,4¢3'' '14,~'~:"~
........ :: .......... ~ ..... ~ ............................ ~ ...... ~ ....................
............. ~ ................ i .................................... ~ ...................
Net Acres
Existing MUSA: SF 15% ROW, MF 10% ROW, 30% wetland/park
MUSA Expansion: SF 15% ROW, MF 10% ROW, (wetland/parks
excluded,via GIS) Scenario A represents an optimal development
scenario. Scenario B represents a more realistic scenario.
COMPREHENSIVE PLAN 1998
Table 2-6
CASE 'PROJECT NAME
:SINGLE-FAMILY DETACHED
93-1 SUB '~Hi__g.hlands of Lake St. Joe
93-4 SUB iWindmill Run
93-8 SUB iRoyal Oaks Estates
93-10 SUB :,Lotus Lake Woods
93-11 SUB !Oaks at Minnewashta
93-12 SUB iTower Heights
93-14 SUB ;Shenandoah Ridge
93-15 SUB :Church Road
93-16 SUB ;TJO
93-25 SUB Minger Addition
94-1 SUB ;Minnewashta Landings
94-3 SUB Olivewood
94-4 SUB :Shadow Ridge
94-5 PUD Mission Hills/Single-family
94-7 SUB :Woodridge Heig.hts
94-8 SUB ;Creekside
94-10 SUB .Brenden Pond
94-13 __S_U~B_P_o_!¢ t_e ka.k_e ~Lu_cy
94-15 SUB Hobens Wild Woods Farm
§5-~O-SgB Forest Meadows
GROSS ROW WETLAND PARK NET TOTAL GROSS ;NET NOTES
AOR~E~__ .AC~E_~ _A_CR_E~ ___L_AN_D_ .... :ACRES _UNI-['S __DE__NS_!_"~'_ D?~S/_T~'_.~_ .............................
3~' 0,4' 11.54: ----~ .... -24-~-(~6-7- --93
17.92' 3.37: 0 0: 14.55 35
13 .... ~,~' ...... O-- .... 0! ...... 1-~..§' ! ....... -~§~ 1.77
---~,-47~ .... 5.32: 0,3. 0~ '' ~-~ ........ -~; 1,57
35.83 '. 9 3: 8 15.831 45 1.26
7.1; 0.6, 0; 0 6.5 13 1.83
11.5. 3.5i O. 0; 8~- 20 1,74
3.3 0 0 0; 3,3: 4 1.21
1.06 0 0: 0 1.06 3: 2,83
9.95 2.08. 0 0,15: 7.72 17 1.71
19.7 1.7 0 0 18 27: 1,37
0.92; 1.37 Shoreland district
1.95 2.41 farm field
2.13 farm field
1,82 'wooded/wetland
2.84:
2.00 infill development
· 2.50;
1.21 infill development
2.83 infill development
2.20 large areas of tree preservation
1.50 .beachlot/shoreland district
25,95 4.6~ 14,8 0. 6.55 8 0.31 1,22 shoreland district, wetlands redone 1998
15.99 __2._1_5_ ..... _1:_9.__----~--~-?_~_--~_~.~_4_--i'~_'-'~ :1:7~ __ 1.0_6_ . 1,42 3.9 acre outlot yet to be platted
7.1 0 0 0 7.1 16 2.25! 2.25 :
37.~9=_ __ 3.6_7 ..... 6._7% ........ _0,. _2_¢.~5~.~___ _~,~_-- 1~..19_Z ..... 1.6_3 .wetlands/topography ; :
....... 39._5 ...... 4.2.. 5.7 ...... 5 ...... _2.4.._6 .... 44 .... 1:11.: ...... !_.7_9_.A_dja_cce?t~t9 Bl_uf~f C_re_e_k_g.9(r_i_dgr_ ......
_ 23.3_ 3.6 ..... 7,2 .... 0 .... _12:5 .... 21_ _ _9:90 ..... 1:6_8 _steepslope_~ la_rgewetland
18.15 1.63 5.62 0 10.9 19 1.05 1.74 Shoreland district
--1-18-7' ' - 0 ..... 0' 0 1.87 3 1,60 1.60 infill development
- -20.'~' '--2.2 .........0- 5 13: 19 0.94 1.46 bluff areas
92-4 ............................ PUD Meadows at Longacres
9 ~ i ~_tS_U D; :T rte ~_e_ i_~-~ i'~-g_~ -
91-,3_P_qD__W_illow Ridge .......... 3.0._3. ..... ,~._ . 8.3_9 ...... 0_ 17.91. 37 1.22 2.07 large wetland
92-1 SUB Stone Creek 81. 10.04 0.96 8 62 141; "-i]7'4" 2.2Y 'tree !~r~i~,~t~7~-~l~Sds ......................
9~?t~, ~!~l~--it~-iii~n A-ddi-tio~ .............. -9-- - ~':i~ ..... 0.9 - 0 ..... ~.-3- iY- "~189 '--- ~.~ ....................................
Creek Estates
92-5 SUB Bluff ....................... ~.4-5- 7.~- 'q'~..~"" 0- '3~.85 ..... -78 .... 'Ii2Y ' '~.'30 .................... : ---
93-3 p U~D_ _W_o od s_ ~_t_Lo n_g_a c r e_s .................................................................................................
93-6 pU_D___Sp.ringfield ........... 80:8 ..... 20.2 0,5 5.3 54.8 134 1.66 2.45
...................................................................
95-3_S_UB _La_ke L_u_cy Esta~tes _ . _ .1_6:_36. _ 2,08. _4.86_ ..... o. 9.42. . _1_7- _1.:04 .... 1_,80 _natur_al_w_e!land_s_, tqp0graphy, .r_edon~ 19~98 . _
95-20 SUB Knob Hilt 8.35 1.1 0,66 0 6.59 12. 1:44 . . 1.86 .v_/e. tland- ...........................
95-21'-i..SUB-iDempsey ..... Additionl '.. ' i "~.11- ~.04' - 0.9(~' ' 0 4~i" 7. 1.36 ' 1.70 wetland __
95-22 SUB The Frontier 8.9 0- 8.61- 9 1101 1.05.-Bi~fi.~.r~ ii_~[t~ 8~v~10~m~-- . ' . _
96-~ SUB ~Q~k-Ridg~ of__La~e Mi~ewasht_a~ -'11.81 0' 9'.7' 23' 1.95 2.37 .
96-3 SUB Slather Addition 1.22 0' 1.22' 2- i.64 1.64 -infill'de-~lo-p-m~nt '
96-4 SUB Melody Hill 4,57 0 3.84 10 2.10 2.60 infill development
96-7 SUB Arundel 1.32 0 1.32 2 1,52 1.52 infill development
96-8 SUB Rice Lake Manor Estates 7.06 0 5.82 2 0,28 0.34 infill development
96-9 SUB Rook Place 1.08 ~ 1.08 2 1.85 1.85 infill development
96-15 SUB Black Walnut Acres 3.28 0 3.28 1 0.30 0.30 infill development
96-18 SUB Song Addition 8.3 0 6.55 1 0.12 0.15 infill development
97-1 SUB Highover Addition 48.99 0 32.33 54 1.10 1.67 steep slopes, trees, wetlands
SUBTOTAL 962.95 31.45 651.65 1,244
PERCENT 3% 68% AVG 1.29
MULTI-FAMILY
94-5 PUD Mission Hills/Multi-family 47.18
94-18 PUD Autumn Ridge 28.13.
92-3 PUD Oak Pond/Oak Hills 24.19
94-7 SP Prairie Creek Townhomes 4.6
87-3 PUD Powers Place 9.7
95-7 SP Lake Susan Hills Townhomes 7.29
95-8 SP C~'~tennial Hills 2.2
95-1 PUD ~orth Bay 52.1
96-3 PUD ~Townhomes at Creekside ; 7.03;
'96-4 PUD Walnut Grove 49.8
SUBTOTAL~ 232,22
PERCENT:
TOTALS 1195.17
PERCENT
0.09' '0.2'
2.'1'- 0'
....
0 0
0.73 0
0 0
0 1,24
0 0
0 0
0 1.75
13.83 2.83
139.67 140.18
15% 15%
11.6 5.87
4.29 0
2.O9 1.8
0 0
0 0
0 0
0 0
2.92 8,66
2.18 1
6.81 0.2
29.89 17.53
13% 8%
169.56 157.71
14%, 13%
0 29.71 208 4.41
O' 23.84 140 4.98
0 20.3 147 6,08
0 4.6 24 5.22
0 9.7 48 4.95
0 7.29 34 4,66
0 2.2 65 29.55
26.38 14.14 76 1,46
0.21 3.64 25 3.56
0 42.79 247 4.96
26.59 158.21 1,014 ,
11% 68% AVG 4,37
58.04 809,86 2,258
5% 68% AVG
1.91
7,00
5,87
7.24
5,22
4.95
4.66
29.55
5.37
6,87 City required preservation of Bluff Creek ·
5.77 corridor/large setbacks from Bluff Creek
6,41
1.89 2.79
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Introduction
This is the fourth in a series of reports designed to fulfill the charge given to the
Metropolitan Council by the Minnesota Legislature in the 1995 Livable
Communities Act. The legislation states:
The Metropolitan Council shall present to the legislature.., a comprehensive report
card.on affordable and life-cycle housing in each municipality in the metropolitan
area. The report must include information on government, nonprofit and
marketplace efforts.
The goal of the Livable Communities Act (LCA) is to stimula~te housing, economic
and community development in the seven-county metropolitan area. The LCA
authorizes the Metropolitan Council to levy funds to: create affordable housing;
promote redevelopment through cleaning up polluted sites; and to develop
compact, high-density neighborhoods that are both pedestrian and transit-
friendly to local residents. Community participation in Livable Communities is
voluntary. The three requirements for LCA funding eligibility are 1)that
communities elect to participate 2)that communities negotiate affordable and life-
cycle housing goals w/th the Council, and 3)that they agree to make expenditures
(determined by a formula) toward implementing their local housing goals.
In 1996 and 1997, the Metropolitan Council distributed $24.5 million to cities
with projects designed to meet LCA goals. An additional $1.1.6 million in 1998
was awarded in 27 LCA grants; 10 to clean up polluted sites, 10 for economic and
community development, and 7 to construct and rehabilitate affordable housing.
The goals set forth in the Livable Communities Act are consistent with the
Council's development and redevelopment policies contained in the Regional
Blueprint. Blueprint policies such as "fostering expansion of life-cycle housing
opportunities and housing choices for lower-income people" and "building strong
communities by lessening the concentration of poverty, through broadening
economic and housing opportunities" share very similar objectives with Livable
Communities goals. To assess the impact of Regional Blueprint policies, the
Council has monitored the region's progress toward providing a diverse mix of
housing types and values. The additional information collected to fulfill the
Council's LCA legislative obligation is very valuable to Council housing market
analysis.
The first LCA "report card," completed in 1996, detailed the CounciFs plan for
long-term housing monitoring and provided historical housing and household
trends for the region. In 1997 and 1998, the report analyzed results from the
Council's LCA community surveys, including information on annual housing
production and data on local participation in federal, state and local housing
programs. The response rates to the Council's 1997 and 1998 LCA surveys ~vere
high, with about 75% of communities responding in both years. A similar
approach netted 143 returned surveys (of 186 communities) in 1999, with 96 of
the 101 LCA participants reporting. Each annual survey requested data for the
prex5ous calendar year, for instance, the 1999 survey asked for residential
construction information for January through December 1998.
The 1999 report includes three-year summaries of affordable housing
construction for the respondent communities, analysis of ge,neral housing
production trends for the 1990s and expanded appendic.es of housing indicators.
Results from a local attitudinal survey that address affordable housing issues are
also discussed.
It continues to be important to recognize that the housing market is most
objectively analyzed by viewing long-term trends. Information for 1996-1998 on
production of affordable housing is insufficient evidence on which to judge a
community's efforts toward reaching housing goals. Residential construction for
these years may portray a totally different picture than activity for the first five
years of the decade--years when no affordability data was collected.
In 1998, 101 communities participated in the LCA and collectively established
goals that if met would add 68,553 ownership and 12,885 affordable rental units
to the regional housing stock by the year 2010. Cities that are working toward
these goals built 9,526 owner-occupied units and 1,153 new renter-occupied
units in the past three years. At these current rates, these cities will meet about
two-thirds of their goals by 2010.
Some cities that continue to contribute affordable housing to the region already
have a diverse mix of housing and have established goals to maintain the housing
mix. Others have chosen not to participate in LCA. When all new affordable
housing in the region is included, regardless of LCA participation, construction at
current rates would result in approximately 12,700 fewer owner units and 3,850
fewer rental units than negotiated by 2010.
The need for more affordable housing in the metro area continues. Until Census
data is analyzed from the nationwide count next year, the extent of the shortage
cannot accurately and precisely be measured. However, data from regional
housing agencies and the Council's own research point to an urgent need for
safe, affordable shelter in -the region. The Metro HRA has a waiting list of 5,054
households that need rental subsidies because they pay more than they can
afford for housing. As the apartment market in the region continues to tighten,
fewer affordable units are available, and these waiting lists for subsidies may
grow in size. Overall rental vacancies now hover around 2%; vacancy rates of 5
percent represent a healthy market.
In 1998, regional homeless shelters nightly served about 4,600 persons who had
no permanent place to live. Half of these people were children. Last year,
approximately 580 homeless people were turned away from shelters every night,
representing a 50% increase over the year before. Statistics also show that more
than half of the homeless persons turned atvav were children. Dwindling supplies
of affordable rental units, fewer funding dollars available to assist low-income
renting families and growing numbers of homeless all clearly point to shortages
that must be addressed.
The housing market drives the production of ne~v units, and it is important to
note that despite the best intentions of local governments, the implementation of
affordable and life-cycle housing objectives operates within the context of the
housing market. Many of the region's communities have made significant
progress toward achieving Livable Commun'ties goals. This report highlights the
positive strides made so far and also identifies places where it appears increased
effort is needed. 2
Baclr~round
Provisions of the Law
The Metropolitan Council is re'quired to report to the Minnesota Legislature on
the progress made by metro area communities toward providing affordable and
life-cycle housing.
The Metropolitan Livable Communities Act states in Article 1, Section 5,
Subdi.vision 10 that: "The Metropolitan Council shalt present to the legislature and
release to the public by November 15, 1996, and each year thereafter a
comprehensive report card on affordable and life-cycle housing in each municipality
in the metropolitan area. The report card must include information on government,
nonprofit and marketplace efforts.'
Definitions of life-cycle and affordable housing
For a community to have adequate life-cycle housing it must have enough
variety in its housing stock to support the physical needs and fit the financial
resources of residents throughout their lives. Life-cycle housing includes rental
units for young people setting up their' first household, starter homes for first-
time homebuyers, move-up units to accommodate households as they earn
higher incomes and add more members, relatively carefree units for empty
nesters and retirees, and supportive environments for the elderly.
The metro area encompasses a wide variety of communitiesmpoised at various
stages of development, and with characteristics ranging from densely populated"
urban landscapes to rural, agricultural areas. Although some communities are
too small to provide a wide variety of housing types--each is encouraged by the
Council to consider their unique, long-term housing needs. The goal is to allow
residents to remain in or near their home community as they move through all
phases of their lives.
Defining and measuring housing affordability for this report involves many
factors. The Council draws on many resources to define this term in various
facets of its work.
The Census Bureau and federal housing subsidy standards define a housing unit
as affordable if residents living within pay 30% or less of their combined
household income on housing costs. Council analysis on decennial Census data
categorizes units based on this definition.
The Council depends on data compiled by the Department of Housing and Urban
Development, current mortgage eligibility guidelines and rental assistance
guidelines in setting the affordability limits used in the housing needs and
production sections of this report. These measures are the criteria used for LCA
affordability determinations.
:.
For an ownership unit built in 1998 to be affordable it must have had a selling -'
price of S 128,000 or less. This definition assumes that a family or non-family
household earning 80% of the region's median family income in 1998 could afford
payments, property taxes and related housing costs without spending more than
30% of their income. The median family income for 1998 was $60,800; 80% of
the median was $48,640.
3
Because most home ownership assistance programs are ta6,geted to households
at or below 80% of median income, this is the maximum income allowed in
determining affordability.
Since rental development and assistance programs are chiefly targeted to
households at or below 50% of the area median income ($30,400), the Council
has called "affordable," rents and utility costs that do not exceed 30 percent of
this income on a monthly basis. Affordable rents vary based on numbers of
bedrooms in units. For efficiency units the rents must be below $532, for one-
bedroom units, below $607, two-bedroom units, below $760 and for three-or-
more bedroom units, below $821 per month.
The LCA survey also asks communities to report on the number of nexv housing
units for owners that are affordable to households earning 50% of the area
median family income. The income measures for 1998 are:
· Median family income $60,800
· 80% of median $48,640
· 50% of median $30,400
Data sources and definitions
The Council collects information from various sources on housing sales and
values for both ex/sting homes and new residential units. These sources provide a
good picture of overall regional housing activity. Rather than new units, it is
often sales of existing homes that create the most opportunity for ownership
among low-income households.
This report includes information from the Minnesota Department of Revenue both
on sale prices and property tax values of existing owner-occupied units in most of
the region's communities. Both indicators express directional movements in the
value of the region's housing stock. These sources flag areas where existing units
are becoming more affordable, but at the same time max' signal loss of intrinsic
housing value in some neighborhoods.
While useful for monitoring change, the value of oxwner-occupied housing is not a
helpful measure of monthly costs to homeowners. Unlike set rents, homeoxvner
costs depend on many factors beside the price of the home, factors such as, size
of dow-n payment, mortgage interest rates, utilities, property taxes based on
location, etc.; Long-time residents may have completed mortgage payments and
are required to pay utilities and property taxes only,
Sales data for e.'dsting owner-occupied homes is available from two sources. This
report includes information from both the Department of Revenue (mentioned
above) and the Multiple Listing Service. Department of Revenue data represents
the sales that occurred in the first three quarters of 1998; the MLS listings are
annual totals.
These sources allow for reporting on overall market activity, not just nexv housing
activity.
The Council's. Role in Housin~ Monitoring
The Metropolitan Council has collected and analyzed.information aboUt the
region's housing market for decades. Throughout the years, several hot/sing
studies have been completed to direct policy decisions made by the Council itself
and external policymakers, as well as to meet legislative requirements. Although
the detail that i.s now being collected to meet LCA expectations is new, Council
researchers have kept track of the number and mix of housing units in cities and
townships since the Metropolitan Planning Commission began.
Approach to LCA reporting
The Council's approach to the legislative directive for an annual "report card"
includes a regional context, reporting on affordable units produced in each of the
last three years and on local government use of federal, state and local funding
programs.
Responses to the first LCA survey of communities resulted in a sufficient return
rate to continue this means of data collection for all three LCA years. In 1999,
(data for January through December, 1998) 143 or 76% of municipalities
reported. Of the 101 participants in LCA, 96 returned surveys. Some cities and
townships have chosen not to respond to the LCA survey at all and others
reported in one or two years. Regional, policy area and sector analysis in the
report is hampered by this partial reporting. Although the Council is required to
report on progress toward LCA goals for every community in the region, local
governments are not required to provide information to the Council.
The three-year summaries of community building trends are snapshots in time;
they obviously cannot reflect efforts made in the first half of the decade or in
years prior to that. Again, the LCA progress and success will be most
meaningfully assessed with many years of information to analyze. This reporting
must reflect the fact that implementation of housing objectives happens slowly
and operates within the context of housing market conditions that are not always
favorable.
All communities in the metro area are required by legislation to have current
comprehensive plans submitted to the Council for review within the next year.
The 1976 Land Planning Act gave the Council its original plan review authority.
The act also included the provision that each comprehensive plan must include a
housing element, detailing the community's vision for a diversity of housing.
Many of the housing programs and planning strategies that cities will use to
promote affordable housing will be addressed in the comprehensive plans.
The Council continues to give priority in the distribution of state and federal
grant funds to local governments that are planning for affordable and life-cycle
housing.
Methodology change for the 1999 report
Respondents to all LCA surveys have been asked to' estimate numbers of new
affordable units in their community. While some are able to provide firm sale
prices of units, others cannot.
Because building permit valuations are readily available, many cities determine
affordability of new housing units based on these values. Building permit values
often exclude the pr/ce of the lot and finishing costs, such as landscaping, wall
and floor coverings.
Affordable owner units reported for 1998 have been adjusted to include an
average lot cost where affordability determinations were based on building permit
valuations. These adjusted values better reflect actual selling prices of new
homes. Numbers of affordable units reported by cities and townships for 1996
and 1997 have been included, without adjustments. ...
Council's Role in Administering the LCA Fund
In addition to submitting an annual report card to the Legislature, the Council
also has responsibility for administering the LCA fund. The fund includes three
accounts'
· The Tax Base Revitalization Account (TRBA) helps cities pay for cleanup of
polluted land so that they can make it available for commercial and industrial
development.
· The Livable Communities Demonstration Account (LCDA) funds projects
that demonstrate efficient use of land and sen'ices. These are achieved through
more compact,' high-density, transit-or-pedestrian-oriented development.
Projects need to show a mLx of residential and commercial buildings, as well as a
range of housing types and values.
· The Local Housing Incentive Account (LHIA) helps cities expand life-cycle
and affordable housing in the region by awarding grants to projects producing
units that are affordable to lower income residents.
In administering all three of the LCA funds, the Council relies on interagency and
community participation in determining which projects will be funded,
A 15-member advisory committee with expertise in many fields, including
development and redevelopment, finance, transportation, urban design and local
government provides the scrutiny needed to ensure that LCDA-funded projects
meet the objectives of the LCA program. The Council administers the LHIA
account with MHIG, an organization of housing funders. The TRBA program is
coordinated with DTED and projects are reviewed by the MPCA to verify that
cleanup is necessary and Mll be completed in a cost-effective manner.
The Council awarded $11,611,765 in grants from the LCA fund in 1998.
Monies were taken from tax levies, and supplemented by 1996-97 carryover,
accrued interest on accounts and from previously funded projects that were
completed under budget.
During the three years of the fund's operation, grants were awarded for the
following:
, T&x Base RevitaJization Account: 38 grants in 13 communities totaling
almost S20 million--used to clearon up 506 acres of land.
· Livable Communities Demonstration Account: 28 grants, amounting to
S13.5 million, given to 17 communities and to two multi-city coalitions.
'}
· Local Housing Incentive Account: 18 grants awarded to 14 commUnitieS for
affordable suburban housing, totaling $2.8 million. ' ' ": '~ ~;"- ~' ~'~'"::'"
The TBRA funds will assist with the cleanup and reuse of brownfields in
Minneapolis, St. Paul, Bloomington, Brooklyn Center, Robbinsdale, Shoreview
and West St. Paul. These economic development projects are projected to provide
almost 4,500 jobs paying average hourly wages of $13, increase net tax capacity
by $4.2 million.
The LCDA grants funded projects that provided rehabilitated and new housing at
prices, affordable to a range of moderate to low-income households. Additional
funding assisted with jobs-housing-transportation links, stabilization of
neighborhoods, and revitalization of commercial corridors in older communities
such as Columbia Heights, St. Louis Park, Brooklyn Center, Crystal, New Hope,
and Robbinsdale.
The Local Housing Incentives Account (LHIA) monies will directly result in more
affordable rental housing in the suburbs. A total of. 590 units, including both
townhouse and apartment units, will be available to households at the lower end
of the income spectrum.
The projects funded through these accounts xx~ill provide; 1200 new or
rehabilitated suburban housing units to households at or below 80% of the area's
median income. About half of these units are designated for renting families
earning household incomes of $18,240 to $30,400 for a family of four
(1998 dollars).
Metro HRA--Council's Additional Role in Housing
The Metropolitan Housing and Redevelopment Authority administers abOut $30
million in federal funds and $2.5 million of state, county and local government
funds. These funds are used to assist some of the region's poorest households
with rent subsidies.
The HRA administers housing assistance programs for approximately 4,800
households in over 100 metro communities in suburban Anoka, Carver,
Hennepin and Ramsey Counties. It provides federally funded Section 8
certificates and vouchers paying a partial rent subsidy directly to property
owners. An additional 700 households are served by the HRA through a variety of
other federal, state and locally funded rent subsidy programs. These include
emergency housing expenses and home improvement loans.
Through the Metropolitan Housing Options Program, some Section 8 recipients
also have the opportunity to relocate from areas severely impacted by poverty to
neighborhoods that might have better employment and educational
opportunities. Families are targeted for the MHOP program because they live in
the areas of pervasive poverty identified bv the Hollman decree.
The Council continues to work with the Familv Housing Fund, local housing
authorities, state and federal housing agencies and others to implement the 1995
Hollman agreement. The goal is to disperse the concentration of low-inc0m~; ..........
public housing in some areas of the City of Minneapolis, by locating simil~'Units -.-
throughout the region. ~ .....
Operating reserves from Section 8 are used to provide cities, counties and
housing agencies within the area with three-year, no interest loans to acquire,
rehabilitate or construct permanent housing. Approximately $500,000 is
available annually.
National Affordable Housint~ Needs
Solving the nation's affordable housing shortage is a top priority on the agendas
of many policymakers. The Department of Housing and Urban Development
(HUD) reports that the ava/lability of affordable homes and apartment units is
declining as the numbers of low-income households grow. HUD analysis of
The American Housing Survey (conducted in large metro areas between 1993 and
1997) indicates that there were only four affordable ~-ental units available
nationally for every ten poor renter-households.
A report entitled In Search of Shelter: The Growing Shortage of Affordable Rental
Housing by the Center on Budget and Policy Priorities includes a/arming
statistics also taken from The American Housing Surv'ey data.
By 1995, 8 of 10 renters with incomes below the federal poverty line faced
housing costs that exceeded 30 percent of their income. About three-fifths of all
poor renters--and more than 40 percent of working poor renters--spent more
than half of their income on rent and utilities in 1995.
· The gap between the number of low-income renters and the number of
rental units affordable to them was xxsder in 1995 than at any point since
comparable data first began to be collected.
° Families receiving subsidies to rent units on the private market in 1995 and
1996 wa/ted an average of two 5'ears to receive these subsidies.
Many affordable housing analyses agree that the shortage of affordable housing is
one of the most serious problems that poor households face. As the numbers of
low-income households grow, fewer will be able to make use of the smaller
numbers of rental programs and subsidies available. And as housing costs grow,
more and more of these households will be forced to live in homes and
apartments that cost too much.
Estimated Rel~ional Affordable Housing Need
The Tkvin Cities metro area faces similar hurdles in providing affordable housing
for its residents as other large metro areas in the nation. Many of the national
statistics shoxw~ above are also true of this region.
Metropolitan Council housing policy focuses on providing affordable housing to
those who need it most--those households in the region x~4th loxv and moderate
incomes. The Census Bureau and federal housing subsidy standards define a
home as affordable if residents pay 30% or less of the total household income for
housing costs. Paying higher percentages leave families x~4thout enough money
to pay for other necessities.
Analysis of regional housing trends after the 1990 Census clarified the severity of
the housing cost burdens shouldered by low-income households. Results pointed
out the following:
Renter Needs/Goals/Projected Results
~2o,0oo ...............................................................................................................
; 97,000 in need*
80,000 '. ............ i ....................................................... : .............
60,000 .............
40,000 ...............
...1990 ............................................................
households
in need*
~o,ooo .............. ' ..................................... ,~:':,'::: ....... --"/2'°"~'°'g'°'~s
9,030 20 I0 projected
results
*Households earning 50% or less of median income paying over 30% o fincome for housing costs.
Owner Needs/Goals/Proj ected Results
I00,000 ..............................................................................................................
40,000 ........
20,000 ....
1990
househo Ids 2010 projected
in need* res ults
............
*Households earning 80% or less of median income pa3ing over 305'0 o fincome for housing costs.
9
1 990 Census Data
Twin Cities Metropolitan Area
Owner and Renter Households
Paying 30% or More of Income
for Housing
Total
households
Owner 88,412
households ;(17%)
508,~7)85
·
Renter
households
~ (4o%)
,
279,405
788,090
1990 Census Data
Twin Cities Metropolitan Area
Owner and Renter Households
Earning $20,000 or Less
and Paying 30% or More of Income for Housin(,
T ota I
households
Owner
households
~_~ 29,032
(6%)
;!788,090
,.
I:
,.
5O 8,685
Renter
households
(34%)
279,485
0 200 400 600 800 1000
0 200 400 600 800 1000
· Forty-seven percent of households at 80% or less of median hOusehold
income (162,122)were housing-cost burdened. ~-
· Three-fourths of households at about 50% or less of median household
income (124,878) paid too much for housing.
· Four out of five of the poorest renter households paid more than 30% of
their incomes (48,323) for housing, as did 71% (13,495)of poor homeowners.
If the 1990 ratios remained the same in 1998, it is estimated that 186,800
owners and renters households earning less than $48,320 (80% of median), had
to pay too much for their shelter. These estimates indicate that about one in five
of all regional households live in homes that are not affordable to them. If the
region is following national patterns during the 1990s, it is likely that the
percentage of households with low-incomes in the region did not stay the same,
but rather rose significantly.
Also, even though the Metro HRA is able to assist approximately 4,800 low-
income clients in the 100 communities it serves, 5,054 low-income households
that need help paying their rent remain on the. HRA waiting list.
Snapshot of Regional Progress toward 2010 Negotiated Goals
The following summary of affordable housing progress is compiled annually by
the Research staff for use at meetings and in other discussions of affordable
housing issues. It is included in this report as an overview of the subsequent
sections.
Livable Communities Summary Data
The metro area communities responding to the Council's LCA survey reported
permits issued for 12,817 new units in 1998, or about 77 percent of all units
permitted (16,627) in the region. Of the 12,817 units included in LCA responses,
4,172 met the affordability criteria set for Livable Communities. These units
include 495 (46 percent) of the 1,083 rental units constructed and 3,677 (31
percent) of units intended for owners (11,734). In addition, there were 16,112
mobile homes located in the metro area as of April i, 1998.
The following table includes numbers of new affordable units reported in LCA
surveys from 1996 to 1998.
Afford- New New New Projected 2010 goals
able units units units 2010 (avg (negotiated
hsg 1996 1997 1998 1996-98) in 1997)
Oxvner 4,116' 3,417' 3,677'* 56,050 68,553
Renter 788 523 495 9,030 12,885
*The majority of these units were deemed affordable from building permit valuations. These values
for owner-occupied units often don't include lot values and finishing costs.
**Affordable owner units reported in 1998 have been adjusted to include an average lot cost where
affordabiliD' determinations were based on building permit valuations. These adjusted values
better reflect actual selling prices of new homes.
Cities that have negotiated LCA affordable housing goals that they are still
working toward have produced affordable units as shown below.
·
11
Totals may not be complete because some of the communities with negotiated
housing goals did not report numbers of new affordable units produced in 1998.
Affordable New New New Projected 2010 goals
housing units units units 2010(from (negotiated
units 1996 1997 1998 avg 1996- in 1997)
98)
Owner 3,436* 2,941' 3,190'* 47,835 68,553
Renter 513 310 312 5,670 12,885
Sixty percent of the region's approximately 1,041,000 housing units are single-
family, detached homes. From 1996 through the end of 1998, 62% of all new
construction was in the single-family, detached market, down from 72% between
1990 and 1995.
Life-cycle
housing
Single-
family, det
Other
types of
units
1996 units 1997 units 1998 units Projected [ Projected
permitted permitted permitted 2000-~ 2010-
2010 2020
65% 60% 61% 53% 50%
35% 40% 39% 47% 50%
Location of development of affordable housin~ units (see map of policy area
boundaries on page 36.)
· In 1998, 77% of new affordable ownership units were built in the developing
suburbs (2,820 of 3,677 units), up a bit from 74% in 1997. Eighty percent of all
new ownership units were constructed in the developing suburbs in 1998.
· More than half of ownership units produced in the Fully Developed Area
(including the central cities) met affordability standards for the LCA (239 of 467
units). The affordability limit for ownership housing in 1998 was $128,000.
· 46% of new regional rental units constructed in 1998 met affordability criteria.
Actual numbers of ne~v affordable apartment units built in 1998 were down from
the two previous years.
· Over 72% of affordable multifamily units were located in the developing
suburbs (357 of 495 units).
--39% of units in the FDA were affordable ( 120 units of 310)
-- 100% of units in the Freestanding Growth Centers/RTC's (18 units)
--47% of units in the Developing Suburbs (357 of 755)
Units demolished in 1998
The Council monitors demolition of residential units that have been abandoned,
burned, lost through natural disasters, cleared for redevelopment projects or
taken down because of physical deterioration. About five percent of residential
demolitions occur follo~ving natural disasters. Most of the units that are taken
out of the housing stock are assumed to be affordable.
· 1,247 residential units were demolished in the region in 1998 according to the
Council's residential building permit survev.
12
~d ~
53
--
ed
!0/0
¥o
· Of these, 617 were single-family, detached .homes and 630 were multifamily
units. About two-thirds of all residential demolitions occurred'in the central
cities.
· About 40 percent of demolitions of single-family homes took place in
Minneapolis or St. Paul. Richfield, with 20 units demolished and 8 moved out of
the city, led the group of mostly older suburbs with more than ten single-family
units removed.
· Demolition of multifamily units was heavily concentrated in the central cities.
Most of the 262 duplex units demolished were in Minneapolis, and all of the
multifamily units were located in the central cities. One suburban apartment
unit was damaged by a storm and rebuilt.
On the 1998 LCA survey, communities were asked whether demolished units
were replaced. Response to this question was not particularly strong, however,
those cities that did respond indicated that two-thirds of the units were replaced
in 1998.
· A large number of units that were taken out in suburban areas were replaced
with bigger, more expensive units.
· 106 of the 413 reported single-family demolitions :vere replaced with housing
that remained affordable to households earning 80% of median income. That
only one-fourth of units removed continued to be affordable after rebuilding may
be of concern to communities striving to retain a good mix of affordable housing
within their borders.
Communities were also asked to indicate xvhere-the requests for demolition
originated. For about half of the units, private parties initiated the permit,
36percent were ordered by official city or township action and 11 percent were
removed by order of another governmental unit.
Community Efforts Promotinl~ Affordable and Life-cycle Housin~
{This section includes information on LCA respondents only, including data from
Minnesota Housing Finance Agency)
Program participation
· Combined information indicates over $174.2 million in housing expenditures in
the metro area in 1998
· Of that total, 66.1 percent (or $114 million) was spent on homeownership
assistance.
· Almost $96.5 million was devoted to first-time homeowanership opportunities
Communities were also asked to report on new planning and zoning efforts made
to facilitate affordable and life-cycle housing during 1998.
· Density bonuses--12 communities
· Land cost write-downs--17 communities i~_.
13
Production of affordable unitsm3-year totals (see footnotes below}
Regional goals and production levels of affordable units 1996-1998
Affordable New units New units New units Projected 2010
housing reported in reported in reported in through goals
units 1996 1997 1998 2010(from (negoti
avg 1996- ated in
1998 1997)
units)
Owner 4,116' 3,417' 3,677** 56,050 68,553
Renter 788 523 4951 9,030 12,885
*The majority of these units ~vere deemed affordable from building permit valuations. These values
for owner-occupied units often don't include lot values and finishing costs.
**Affordable owner units reported in 1998 have been adjusted to include an average lot cost where
affordability determinations were based on building permit valuations. These adjusted values
better reflect actual selling prices of new homes.
Participants in LCA have negotiated the addition of 81,438 affordable units for
the region by the year 2010. If the same level of production of the last three
years continues, the region would experience a 16,500 unit shortfall of the
negotiated goals.
Production of affordable renter-occupied housing
Production of affordable rental units will have to pick up substantially in the
coming years to meet 2010 affordable rental housing goals. After several sluggish
years, multifamily construction brightened somewhat 1998. For affordable rental
units, however, 1998 was the slowest of LCA years. If the three-year trend
continues until 2010, an additional 3,855 affordable rental units would be
needed to reach the negotiated goals. Annual construction of about 860 units
per year was projected from 1995 to 2010 to result in the negotiated goal of
12,885 new affordable units.
Multifamily building in the 1990s has not come close to the levels of the 1970s
and 1980s. In both decades about 61,600 new apartment units were added to
the region's housing stock. Demographics partially explain the vigorous
apartment market of these years -- when a large contingent of babyboomers were
starting their own households by leaving their parents homes and moving into
apartments. Multifamily construction incentives that were prevalent in the 1970's
and through much of the 1980's are no longer available. An estimated 26,000
multifarnily units will be built in the 1990s.
Current apartment vacancy rates are veu~ low--at about 2.5%--indicating a very
tight rental market. These rates have persisted for several years--perhaps
spurring the upswing in multifamily building in 1998. The good news in 1998 is
that about 46% of all rental units reported in LCA surveys were affordable; the
bad news is that with 495 new units, the region put in the fewest low cost rental
units of the LCA years.
Three of the region's cities have produced more than 100 affordable rental units
since LCA reporting began, They are; Minneapolis adding 243, Minnetonka, 158
units, and Coon Rapids, 1 18. "
14
Production of affordable owner-occUpied housing.:
Housing market conditions in the last three years have been very favorable for
the construction of ownership housing of all types.
Mortgage interest rates have been so attractive that households earning lower
incomes have been able to enter the ownership market for the first time, and
owners hoping to move into larger units can do so.
Many in the babyboom population are still in the "moving up" phase of their lives.
These factors have fueled the growth of the single-family sector of the market
throughout the ~990s.
The top ten cities (shown below) permitting affordable owner housing between
1996 and 1998 built a little over half of all affordable units constructed during
LCA years. In total, 11,210 new affordable single-family, townhouse and
condOminium units were produced. Woodbury's performance in affordable
owner-occupied unit construction outpaced the nearest contender by 426 units
for the three LCA years.
Top ten cities in addition of affordable o~mer hOusing
Woodbury 1,425
Shakopee 999
Farmington 603
Coon Rapids 586
Burnsville 557
Eden Prairie 485
Inver Grove Heights 366
Eagan 355
Cottage Grove 302
Maple Grove 281
Affordable units added by policy planning area (map of policy areas on
page 36)
LCA participants in the Developing Suburbs have negotiated the addition of
50,515 affordable owner and 9,910 rental units by 2010, representing about 87%
of total negotiated LCA goals. In these first three years of reporting, the
Developing Suburbs have added 9,526 new affordable units, 1,289 apartments
and 8,237 homes for owners. Seventy-one and seventy-three percent of affordable
rental and owner units respectively, have been located in these suburbs from
1996-1998. These counts represent units added in all developing suburbs,
regardless of their participation in LCA.
The central cities and most fully developed suburbs have an adequate mix of both
life-cycle and affordable units. Most negotiated goals to preserve existing
affordable housing rather than production goals. Nonetheless, in the Fully
Developed Area (central cities and fully developed suburbs) 54% of rental housing
constructed from 1996-1998 met affordability standards. About 43% of'-.new
owner-occupied homes ~vere affordable--in the FDA, additions of higher priced
housing can actually represent movement toxvard more stable, diverse
neighborhoods.
Minnesota Association of County Social Service
Administrators
Legislative Subcommittee on Housing
Report on A£¢ordab[e Housing
Report Issued April, 2000
MACSSA Legislative Subcommittee on Housing
Report on Affordable Housing
Table of Contents
Executive Summary/Options for Response
Page 2
Social and Economic Costs of the Affordable
Housing Shortage
Page 4
Who is Affected by the Lack of Affordable Housing?
Page 8
How Did We Get in This Situation?
Page 12
Response Needed
Page 19
Endnotes
Page 23
Appendix A: Federal Government's Role in Affordable
Housing
Page 26
Appendix B: Results of Survey of County Social Services
Directors
Page 28
Appendix C: Committee Membership and Resources
Page 31
Executive Summary
The lack of affordable housing in Minnesota has reached crisis proportions
in many parts of the state.
Everyone is affected by this shortage as it is an economic development issue, a
family stability issue and a social welfare issue. Not taking action to alleviate the
affordable housing shortage will cost public entities in laggirig economic vitality in
their communities, overall decreased productivity of citizens, increased social
services and decreased educational achievement.
All sectors are touched by the shortage of affordable housing.
The affordable housing shortage produces impacts on local units of government,
the business community and all citizens. One analysis showed that providing
housing options and community supports could reduce public sector costs by 52%
per year. Businesses are having difficulty hiring and retaining workers in Iow-skill
or entry-level positions because of the lack of affordable housing near the jobs.
Children's health and education suffer when families lack stable, affordable
housing.
Wages and housing prices are disconnected causing market failure.'
Working a full-time job, even with two low-end salaries, is often not enough to pay
average rents in many communities, and totally out of reach for home ownership.
Over half of job growth in the next few years is expected in jobs paying less than
$25,000 per year. Applying the 30% affordable rule leaves $600 per month for -
housing (including utilities). The average apartment rent in most communities is
over $700 for a two-bedroom unit and over $900 for a three-bedroom apartment.
The high costs of private development and building of new homes makes it
impossible to build new housing, single-family or multi-family, that meets the needs
of today's workers. Estimates reach as high as $15,000 of a home's price being
attributed to excess local regulations and fees. The federal government has also
virtually abandoned the housing business except to provide vouchers to be used in
private developments. The lack of new construction, private or public, ratchets up
the cost of existing housing beyond the means most working families.
Affordable housing, as defined by the U. S. Department of Housing
and Urban Development (HUD) is housing that costs the occupant no
more than 30% of their income for gross housing costs, including
utilities. At this level, financial crises can be handled and housing
sustained whereas at levels higher than 30%, the housing is not
sustainable in the long term.
,r
What conditions have brought on this problem?
The basic problem is one of a lack of housing available at prices affordable to most
wage-earners and the mismatch between the median salary levels and the price of
either rental housing or home ownership. These conditions are a result of many
factors. This study describes the following contributing factors:
Increased housing costs for rental and purchased homes
Disconnect between average wages of entry-level 'and mid-level jobs
and the cost of housing
Virtually no federally subsidized housing has been constructed since the
mid-1980s which exacerbates the shortage of available affordable
housing
Extremely Iow vacancy rates for all rental housing which drives up rents.
Adding more multi-family housing to the market, even market-rate
apartments, is extremely difficult in most communities today.
Rising land costs, development fees, land use ordinances and
construction costs which increase prices for newly constructed single-
family and multi-family homes
Political difficulty in siting new affordable housing developments (NIMBY)
Lack of connection between the location of jobs and the location of
affordable housing coupled with a lack of public transportation between
jobs and affordable housing.
What should be done?
This committee has noted a broad range of solutions that should be considered
when seeking to address the shortage of affordable, sustainable housing in
Minnesota. The overall theme of these options is that public intervention with
powerful incentives is vital to provide affordable housing. The market alone will not
meet the challenge of making more housing available to all Minnesotans.
Recognize the need for and increase funding to obtain supportive
housing services for individuals and families who need either
temporary or ongoing services in order to secure and maintain
their housing.
· A fundamental restructuring needs to occur in order to stimulate
new development. Because the scope of providing affordable
housing is so large, this development will take the concerted
efforts of the public, private, non-profit and foundation sectors to
begin to resolve the problem.
,, Because of the high cost of land and building costs, everything
possible must be done to maintain and restore the existing supply
of affordable housing.
· All players need to work together to recognize the extent of the
problems caused by a shortage of affordable housing and support
efforts to change attitudes which are barriers to increasing its
supply.
Social and Economic Costs of the Affordable Housing Shortage
A broad range of issues, including family stability, health and
education of children, as well as communities' economic growth
are all affected by the lack of affordable housing which is
reaching crisis proportions in many parts of the state.
Providing affordable housing options and community supports
could reduce public sector costs by 52% per year.
A recent survey of county social service directors identified the lack of affordable
housing in their communities as contributing to a significant degree to issues of:
(Complete survey results are contained in Appendix B.)
· Problems with school performance for children
· Lack of parental involvement in schools
Difficulty securing jobs for welfare-to-work clients
· Transportation issues (difficulty getting between home and work)
· Poor job retention
Larger counties also noted increased or prolonged homelessness of adults and
families due to the shortage of affordable housing, increased or prolonged out of
home placements of children, emotional/mental health problems 'for children and
school attendance problems. One county administrator said, "Families are unable
to get out of shelter because there is no affordable housing. The kids can't enroll
in their 'home' school, and the parent has a very difficult time getting a job because
they are searching for housing. We have noticed a dramatic increase in the
number of working adults in the shelter."
These social issues are the ones most greatly impacted by the shortage of
affordable housing. The lack of stable, affordable housing for families significantly
increases costly interventions in their lives by public agencies. Lack of housing
can delay transition from welfare to work, force decisions about paying for housing
versus food or healthcare and destabilize a family's connections to school and
community supports. The most difficult situations cost public agencies in terms of
increased use of foster care, medical care and other emergency services.
In an analysis conducted by the Family Housing Fund, those families who are most
in need of housing options could have costs to the public sector reduced by an
average of 52% per year if stable housing along with community supports are
provided.~ Therefore, the costs associated with the lack of housing are human and
economic while the solutions will need to be devised from a broad coalition of
players.
Children's Health Problems Attributed to Lack of Affordable Housing
As the number of Iow income families lacking safe and affordable housing
increases, so does the number of children suffering from asthma, viral infections,
anemia, stunted growth and other health problems. In addition, poor families that
spend a large percentage of income for rent are at high risk of not having enough
money to feed their children, in one study, six times as many children on waiting
lists for affordable housing had stunted growth as children whose families had
already obtained such housing. Another study found that the growth of babies
decreased during the cold wintertime months. Researchers attributed this to many
families lacking affordable housing and being forced to spend money on heat
instead of food.2
Education Difficulties Trace to Poor Housing Options
A lack of affordable housing options increases mobility of children which harms
them and their education. According to the Kids Mobility Project, children who
move frequently attend school less often and do less well on achievement tests
than do children who do not move. This study of grades 1-6 in the Minneapolis
Public Schools found that the more moves children make, the lower their average
reading scores. Mobility also negatively affects attendance. Attendance is
strongly related to achievement. Students with nearly perfect attendance on
average had reading scores that were 20 points higher than those who attended
_
less than 84% of the time. One of the main recommendations from this study was
to develop more safe, quality, affordable housing. A special need was identified for
units that are large enough for families with children.3
Shortage of Affordable Housing Has a Major Economic Impact
"Communities cannot grow without more affordable housing,
but inexpensive housing is almost impossible to build. ,,4
Minnesota is experiencing rapid job growth in many parts of the state. However,
most of the job growth is in industries that pay wages that are less than those
needed to purchase a new home or rent an apartment at market rates. Because
the stock of affordable housing, especially noticeable in Greater Minnesota, is
severely limited, employers are finding it difficult to expand or even stabilize their
workforce because workers are forced to live great distances from many jobs.
According to the Minnesota Department of Economic Security, total employment in
Minnesota is projected to increase by over 416,000 jobs between 1996 and 2006.
The service sector, the state's largest industry division, is expected to continue to
lead job growth by adding 234,000 jobs, more than half of all projected new jobs.
Job growth in this area is expected to concentrate in health services, business
services, educational services and social services industries. The trade division is
expected to add the second-largest number of jobs, 76,000 with employment gains
continuing to be the highest in eating and drinking establishments followed by
wholesale trade, general merchandise stores and retail stores.5
These service and trade jobs are not high salary areas. Overall, over 50% of the
growth in occupations during the 1996-2006 timeframe is expected to be in jobs
paying less than $25,000 per year. Applying the 30% affordable rule would allow
most of these workers to spend less than $600 per month for housing (including
utilities), which is not enough for today's housing market.
Current Salary Levels Make Paying. for Housing Difficult
In greater Minnesota, the wages are even lower. The average annual salary in
1997 for home health care services workers was $13,210 which leaves $330 per
month for housing. A nursing and personal care facilities worker in greater
Minnesota made an average of $15,341, or $384 per month for housing. ,As the
report from Minnesota Department of Economic Security states, "Both anecdotal
evidence and data suggest that nursing assistants are highly needed employees in
nursing homes and possibly home health care, but these workers earn less than
$8.00 per hour. The jobs may be out there, but there may not be many people
able to support themselves and a family on the wages.''e
The chart below illustrates the estimated amount needed to support a family of
three for housing and other basic needs. It becomes obvious that the wages made
by many working Minnesota families is not enough to sustain-these costs,
especially for the largest portion of a families income - housing.
Estimated Monthly Cost of Living, Family Size of Three
(Mother and Two Children) $2,394/month $28,733/year7
Economic Development Issues Affected by the Shortage of Affordable
Housing
The lack of affordable housing near jobs is now seen as an obstacle that impedes
access to or retention of available "low-skill and entry-level openings". This was
recognized in a recent study by the Citizens League.
"Suburban businesses are having difficulty finding workers, especially for
Iow-skill positions, and the lack of affordable housing in suburban
communities is widely cited as one of the responsible factors. The end
result for employers is poorer service, an inability to fill job orders, and other
problems that have a very real impact on the bottom line for businesses.
Businesses will have to play a higher-profile leadership role on the issue of
affordable housing than they have in the past. This will be especially true in
the suburbs, where much of the job growth is occurring, where affordable
housing is in very short supply, and where such housing developments
often meet intense opposition." 8
Housing is a. Worker Productivity Issue .
The Minnesota Department of Economic Security predicts an annual 1.5% growth
in employment opportunities through 2006. However, the workforce is onlY
expected to grow at 1.2% annually. The combination of full workforce participation,
aging of the workforce and continued economic growth will bring moderate to
severe shortages in employees. To make up this gap, business are being
encouraged to keep and retain workers while finding ways for them to be more
productive. Making sure housing is available and affordable for all wage levels is
now considered a strategic advantage when competing for employees.
Who is Affected by the Lack of Affordable Housing?
A mother and father both work at the same
company but split shifts to care for their children
and to get by with one car. When the car broke
down, they made the decision to spend money
to repair it so they could maintain their work
schedule. But, then they couldn't pay their rent
and were threatened with eviction. A housing
worker intervened with the landlord to allow
them to stay but their future is tenuous.
',; The first year teacher who has to ;;
h
;', continue to live with her parents
,I II
,,1 and drives 30 miles to her job,,
',; because she can't afford to rent
;[ an apartment or buy a home in the
~1 II
,, community in which she teaches.,,
'1 II
The young father
trying to make
the transition
from welfare to
work who gets up
at 4:00am to ride
the bus to his
suburban job that
pays too little to
afford housing in
the area.
ii The mother of four children who owns her own mobile home but is
ii ::
.%. ...,
ii evicted from the mobile home community because the neighbors
ii don't like the behavior of her children. Because there are so few
il appropriately sized apartments vacant in the district where her
il children attend school, the older two live with aunts and uncles in
!~ ::
ii the district while she and the younger two children spend three
ii months in a shelter until an apartment can be found for all five of
ii them. Because of the trailer park issues, an apartment is retained
il only through the efforts of a county supportive housing unit which
::
ii negotiates with the landlord.
'* il .'-'~ ,'i ~;-'.' ~ .' '-.' :.' .': 1 I'-1 ~ .' :~-'~ | .%'-' ,"--' ,','I 1 ~:-'-' ,'-''-' 11-* '.~-' .%'I-' ~.' .'.'-%' ~ ,' ,' I*%' ~ | ,"-,%' 1-' ,' *' |-' .'-' .' ,' '-,%' ."-.'-' .'-' | 1 *'-'-' *'-* | '-.' |-' .'.%'' .'-%'.' I| | | | .' .'-%*-%'-' .' ,'*%'-'-' .'-"-%' .%' '-'-', .' .'-' |-*,',' .' ,'-' .'I,' '--' .'-*-' ~-': '-,' ;.' 1 .' .' .' .%' .'-'-' ,%'-' :I .'-' .' .'l .'
These are just some of the situations in which people find themselves due to the
lack of affordable housing. At the far end of the housing continuum are those who
can not find or maintain housing. The percentage of homeless people and families
with full time or part time jobs is increasing. The Wilder Research Center reports
that, between 1994 and 1997, the percentage of homeless people employed
around the state increased 30%; since 1991, the percentage rose almost 80%. At
the same time, however, "income generated from this employment is often not
adequate to support the cost of market rate housing.''9
Mismatch Between Housing Costs and Usual Incomes for Working Families
The following chart from the Dakota County Community Development Agency
shows the gap between working family's salaries and housing in a suburban metro
county.
Cost of Obtaining Affordable Housing
$1,100
Average monthly
Average monUW rent for 3-bedroom
$900 rent for 2-bedroom apartment: $1,073
apartment: $8:1.5
$800
$700 ,~,
$600 . ,.
Family earning between
$10,000 - $17,000
annually can afford
$5oo -
$250 - $425/month
for housing.
$400 - Employment in this
range: childcare worker,
host/hostess, counter
clerk, retail salesperson,
hotel desk clerk.
Family earning between
$17,000 - $24,000
annually can afford
$42S - $600/month
for housing.
Employment in this
range: bank teller, home
_ health aide, file clerk,
receptionist, landscaping
laborer, school bus
driver.
Monthly cost to own
1,000 - 1,500 sq. ft.
home: $1,185
Family earning between
$24,000 - $32,000
annually can afford
$600: $800/month
for housing.
Employment in this
range: licensed practical
nurse, flight attendant,
printing press operator.
Source: Dakota County Community Development Agency: 2000 NarhetSun,ey; Hinnesota Department of
Economic Security Salary Survey
Working Families Have Difficulty Affording Housing
According to the Family Housing Fund, a typical two-bedroom apartment in the
metro area rented for $621 per month in 1998 and a modest three-bedroom house
sold for an average of $93,000. Costs for these apartments and homes are even
higher in surrounding suburbs. Based on the 30% measure of affordability, a
family would have to earn $24,840 per year ($12 per hour which is 175% of the
federally established poverty-level income) to afford to rent a two-bedroom
apartment or $33,000 per year ($16 per hour) to afford to buy a three-bedroom
house.1° However, $25,000 per year is approximately 40% of the area's median
salary and most housing considered affordable is available only to people at 80%
of median or above.
The need for affordable housing for working families is especially acute in
communities with high levels of employment growth but few lower-priced
apartments and houses. Many developing suburbs are experiencing significant job
growth, but most affordable housing is concentrated in the center cities and first-
ring suburbs. As a result, while many workers earning Iow wages are providing
essential services for residents of local communities - child care, factory
production, food service, or health care, for example - they often are priced out of
housing in the communities in which they work.
Suburban Areas Illustrate Wage/Housing Cost Mismatch
For example, in the Twin Cities' third ring suburb of Burnsville, an annual income of
$38,000 is needed (60% of area median) for "affordable housing". However, first
year teachers in lSD 191 make $27,611 annually, entry level corrections deputies
guarding inmates in the county jail make $25,888 per year and full-time cashiers at
a large grocery chain earn $7.40 per hour ($15,392 yearly). In a newly developed
corporate center in the city, the average entry-level salary for light assembly
positions is $17,700 per year, quality control positions make $19,000 annually and
purchasing/buyer positions average $24,460. None of these salaries are even
close to the income needed to acquire "affordable housing" in the area, even if it
were available.
Even with two people working at these tYpes of jobs, a family's income would'not
support average housing costs in Burnsville. If one person in a married couple
works full-time at the grocery chain and the other works at a light assembly job, the
couple's combined income would be $33,092. This amount is well below the
$38,000 needed for affordable housing in Burnsville. If they should also have a
baby and need to add the cost of day care in the area for an infant, their available
annual income would be reduced by over $11,000 per year leaving them able to
afford $533 each month for housing. Unfortunately, the average rental costs in the
area are over $750.
The Dakota County 1999 Rental Market Survey issued by Dakota County HRA
(now called Dakota County Community Development Agency) shows that rental
costs for two bedroom units in Burnsville range from $410 to $1,400 per month
with 113 units at $600 or less per month and 87 units at $1,000 or more per month.
Three bedroom units are in a range from $795 to $1,450 per month. The overall
vacancy rate is the area for these rental units is 1.68%.
The chart below illustrates the gaps between salaries and average rental costs
compared to vacancy rates. While this example is from one suburban community,
it represents the pattern evident across the metropolitan area and into Greater
Minnesota where there is a gap between wages and housing costs coupled with an
extremely Iow vacancy rate.
10
Rents Affordable to Entry Level Jobs Compared to Average Rental
Costs and Vacancy Rates in One Suburban Area
$800 $69~7.57 $757 $757 $757 $757 20.0%
$700 -
$600 -- B -
$500 - ! ':
,,
,
$400 - ~
$300 --- i ,!
$200 --- ~. ~'
$0
$757
$6
.7%
.7
- 15.0%
$44" ~-
--~ --10.0%
-- 5.O%
.7% ~;~ .7% .7%
,
' '. ,~ 0.0%
l---'q Rents Afforded by Job ~Average Rent --~--Vacancy Rate
11
Welfare-to-Work Made Difficult by Housing Costs
The following table shows what people in different professions can afford to pay for
housing. Many of these jobs are the type taken by MFIP welfare-to-work recipients
who have an especially difficult time finding/maintaining housing.~1
Median Monthly % of Income % of Income
Yearly Amount Required To Required To
Salary For Can Rent 2- Own 3-
Full-Time Afford For Bedroom Bedroom
Position Worker1 Housing2 Apt.3 House4
Child Care Worker $14,560 $364 51% 68%
Counter and Rental Clerk $12,792 $320 58% 77%
File Clerk $16,931 $423 44% 58%
Food Preparation Worker $15,600 $390 48% 63%
Home Health Aide $15,912 $398 47% 62%
Janitor, Cleaner $16,640 $416 45% 59%
Medical Assistant $21,403 $535 35% 46%
Nursing Aide, Orderly $19,656 $491 38% 50%
Receptionist - $18,720 $468 40% 53%
School Bus Driver - $18,408 $460 40% 54%
Teacher Aide $15,928 $398 47% 62%
Teller $17,098 $427 44% 58%
~ Source: Minnesota Department of Economic Security, 1996 Minnesota Salary Survey
2 Based on 30% of income
3 Based on 1997 HUD Fair Market Rent of $621 for a two-bedroom apartment in the Twin Cities
metropolitan area.
4 Based on Regional Multiple Listing Service average cost of $93,000 ($825 per month) for a 3 BR
1000-1500 square foot single-family home sold in the Twin Cities metropolitan area in 1996.
Chart created by Family Housing Fund, Minneapolis, Minnesota, July 1998
Households with only one full-time wage earner, such as single-parent families or
families in which one parent doesn't work outside the home, face particular
difficulty finding an affordable home. Even with two family members working full-
time in jobs that pay close to minimum wage ($5.15/hour, $892/month or
$10,700/year), a family cannot afford a typical two-bedroom apartment or three-
bedroom house.12
Welfare reform in general has had its greatest impact on the renter population.
While only a third of U.S. households rent their homes, 80% of those reporting
receipt of public assistance in 1998 were renters. Although it is still unclear how
many former welfare recipients have made the transition to work nationwide, there
is no doubt that many who are now employed do not earn enough to afford decent
housing. Assuming take-home pay of $7.00 per hour and full-time work, a single
earner could not pay the rent on an average, modest two-bedroom unit anywhere
in the U.S. without incurring a significant cost burden.~3
12
How Did We Get In This Situation?
Nationally, the supply of affordable housing has fallen by nearly
1.5 million units over the past two years. Availability of rental
housing of all kinds in the Twin Cities metropolitan area is
approximately 1%.
In the Twin Cities area, 185,000 households with annual incomes
below $30,000 pay more than 30% of their income for housing.
Almost 48,000, or 44%, of/ow-income Twin Cities' renters spend
over 50% of their income on housing.
The identified need for affordable housing in Greater Minnesota
is for 4,000 additional units each year.
Supply of Affordable Housing Situation Caused by Increasing Housing
Costs, Mismatch with Salaries
Affordable housing, as defined by the U. S. Department of Housing and Urban
Development (HUD) is housing that costs the occupant no more than 30% of their
income for gross housing costs, including utilities. There is widespread agreement
that there is a shortage of affordable housing nationally and in Minnesota. Many
factors play a role in the current shortage of affordable housing, however, there are
three major reasons for the housing crunch: the high cost of housing in general,
the lack of supply of affordable, sustainable housing and the mismatch between
people's salary levels and housing costs. This disconnect between the cost of
housing and the wages paid for jobs along with the inability of the market to
support affordable housing causes what can be called market failure.
Where Has All The Housing Gone?
Nationally, the supply of affordable housing has fallen by nearly 1.5 million units
over the past two years. These losses include unsubsidized units where rents have
increased, privately owned housing where owners have opted out of federal
subsidy programs, and public housing that has been demolished but not replaced.
There also continue to be over 5.3 million households with worst-case housing
needs - paying at least 50% of their income for rent. ~4 Severe payment burdens
are most prevalent among the 5.8 million unsubsidized renters with extremely Iow
incomes (less than 30% of the area median). 45
Locally, the Twin Cities area also faces a severe affordable housing shortage.
* There are 68,900 renter households with annual incomes below $10,000 in
the metropolitan area, but only 31,200 housing units with rents affordable at
this income level.
· Only 36% of families living in poverty in the Twin Cities area receive housing
assistance from the government.'
13
· In the Twin Cities area, 185,000 households with annual incomes below
$30,000 pay more than 30% of their income for housing. Almost 48,000, or
44 %, of Iow-income Twin Cities' renters spend over 50% of their income on
housing.
· 50,000 Twin Cities suburban households earn incomes below $20,000 and
pay more than 30% of income for shelter.
° in the Worst cases, individuals and families who cannot afford housing face
eviction from apartments or foreclosure on their homes and may become
homeless. On any given night in Minnesota, there are 16,000 homeless
persons according to a 1997 study by the Wilder Research Center. This
represents a doubling of the state's homeless population since 1991,16,17,18
The Metropolitan Council estimates that 1,200-1,700 new units of affordable
housing must be added throughout the metropolitan region every year through
2020. The Minneapolis planning department cites an immediate shortage of
19
15,000 new units of affordable housing in that city alone.
·
Greater Minnesota Feels the Crunch of Not Enough Housing
There is also a housing shortage in Greater Minnesota which directly impacts
economic development in communities. For instance, the Mayo Clinic had to rent
hotel rooms for 150 new employees who couldn't find housing in the Rochester
area. Nursing home executives in the Stillwater area talk of using old farm houses
for well over a dozen people each who they want to "import" from West Africa. The
Greater Minnesota Housing Fund works in the 80 non-metro counties. It funds
1,100 new entry level housing units for working families per year, but the fund
estimates that the need is for 4,000 units per year. In addition, it estimates that
there are 7,000 substandard units per year waiting to be rehabilitated.
Federal Housing Policy Contributes to the Housing Shortage
The loss of housing is attributable to many factors, beginning with a shift in federal
housing programs and tax laws in the mid-1980s. Total discretionary funding for
housing decreased in absolute dollars during the 1980s and
14
continued in the 1990s. As a result of less financing, virtually no new public
housing has been built since the early 1980s as shown by the following graph.2°
Construction of Federally Subsidized
Housing Units
Twin Cities Metropolitan Area
20000
15000 -
10000 -
5OO0
16,427
5,550 6,-773
1940s 1950s 1960s 1970s 1980s
893
!
1990s
Reductions of affordable housing units were exacerbated by redevelopment of
many urban downtown areas and loss of boarding-type housing without
replacement requirements. In Minneapolis in 1998, there was a net loss of 388
units destroyed compared to new units constructed. Most of the wrecking permits
were issued to remove single family, duplex and smaller apartment buildings.
Compared with earlier in the decade, homeless persons in 1997 were "more than
twice as likely to find the lack of affordable housing a barrier to having their own
place.''2~ Clearly, the demand for affordable housing is increasing much faster than
supply.
Among many non-profit agencies working to increase homeownership for
households with very Iow incomes is Habitat for Humanity. Habitat for Humanity
built 111 homes in Minnesota in 1999 and plans for 140 in 2000. Obviously, many
more are needed.
Multiple Barriers Exist for Maintaining Current Affordable Housing Stock
The barriers to successfully maintaining affordable housing stocks are formidable.
First, hot rental markets in many cities are making the conversion to market rates
increasingly attractive. Second, the duration of Section 8 contract renewals is now
just one year, increasing the share of owners that can opt out annually and adding
to the uncertainty property owners feel about keeping their units affordable for
extended periods of time. Third, Iow federal caps on subsidized rents discourage
owners from participating in the subsidy programs in areas where they can earn
higher market rents. And fourth, HUD has heightened enforcement against owners
of substandard units. While this effort is needed to protect tenants, fear of this
15
crackdown has reduced landlords' willingness to partner with a government
agency.22
A large reduction in project-based Section 8 housing is expected to continue in the
next few years. During the next five years, contracts on two-thirds of all Section 8
units in the country, involving 1 million apartments, are set to expire.
Because of the lack of incentives to build housing at the Iow' end and increasing
market demand at the high end, multi-family production has shifted toward more
expensive units. Between 1990 and 1997, the median size of new multi-family
housing units increased by nearly 100 square feet and the share with two
bedrooms rose from 65% to 71%. At the same time, the median asking rents in
apartment buildings with five or more units, after adjusting for inflation, saw a 16%
increase from $645 in 1994 to $724 in 19977--
Lack of Availability of Rental Housing Exacerbates Affordable Housing Issue
Availability of rental housing of all kinds in the Twin Cities metropolitan area is
approximately 1%. Strong demand for these few available units drives up rents
and makes housing affordable to the poor even more scarce. According to HUD,
in 1997 and 1998, rents nationally increased at twice the rate of general inflation.
As an example, a survey of apartment rents in Minneapolis found an increase of
13.1% in average rents during the first half of 1999.24 According to the
Metropolitan Council, 41.3% of the renter households in the Twin Cities pay 30% of
their income or more for housing costs.
Because of this lack of housing, renters with valid Section 8 certificates are unable
to find rental units, causing about $10 million in subsidy funds to go unused
annually in the 100 communities served by the Metro HRA. Only about one in nine
families with certificates find housing today in these communities. The Minneapolis
Public Housing Authority also has over 4,200 families on its Section 8 waiting list.
This situation contrasts With twelve years ago when landlords were picking up
certificate holders at the HRA office to show them apartments. This was when the
vacancy rate in the Twin Cities was over 7%.
Rising Construction Costs Limit Building New Affordable Housing
Additional pressure is put on the housing market due to rising construction costs.
According to data from the Minnesota Housing Finance Agency, a typical multi-
family project cost approximately $20,000 to $40,000 per unit to develop in the 70s
and 80s which resulted in rents of $300 to $400 per unit. Currently, costs are in
the range of $80,000 to $100,000 per unit to develop resulting in rents of $800 to
$1,000 per unit.
Some of the causes of this increase in development costs include rising costs for
building materials and land, high real estate taxes on rental housing and high
energy costs. Rising land costs are of particular concern to groups such as the
Builders' Association of the Twin Cities (BATC) which contend that the
~ .
..
16
Metropolitan Urban Service Area (MUSA) as defined by the Metropolitan Council is
too restrictive. The MUSA line defines those areas which have urban levels of
regional sewer and transportation services. BATC believes that the position and
timing of moving the MUSA line are hindering the ability to construct affordable
homes to accommodate the 270,000 additional households expected in the
metropolitan area between 2000 and 2020.
In addition, "high-stress" properties have higher costs to mai'ntain them due to
increased turnover which requires more redecorating, hard use requiring more
repairs and extra security for high crime. The result is that for properties to be
affordable for low-income households, rental housing often must be "debt free". 25
This means that no mortgage can exist and costs are for continued operations only
rather than for paying off debt.
Costs for building are also affected by the type of housing communities will allow to
be built. Many new entry-level units are townhouses rather than larger, multi-unit
buildings. While townhouses blend well with neighborhoods and are considered
more politically acceptable, they are difficult to build for less than $100,000 per unit
in parts of Minnesota and up to $'135,000 in the metropolitan area considering
current land and construction .costs. These development costs would yield market
rents of approximately $1,000 to $1,350. Therefore, this type of project must also
be debt free in order to maintain affordability.
Local Development Regulations Make Building Affordable Housing Difficult
The top four factors affecting the cost of new housing construction in the
metropolitan region identified by the Metropolitan Council's Housing Reform
Initiative were: building codes; fees and assessments; land use ordinances -lot
size, street width, setbacks, density; and engineering requirements and standards
- e.g. street width, water runoff requirements.26 In the mid-70s, about 70% of the
cost of a home was the cost of actually constructing it. Today, the cost of actually
constructing a house accounts for less than half of the sticker price.27
A local HRA estimates that $10,000 to $15,000 is added to the cost of housing by
state and local development requirements that could be lessened. The National
Association of Home Builders estimates these costs are 20% - 35% of a new
home's cost. There is agreement that builders will construct lower-cost housing
with fewer amenities if the projects are profitable. However, communities are often
extremely resistant to adopting regulations that allow for alternate construction
techniques, smaller lot sizes or increased land subsidies.
Metropolitan Council's Housing Reform Initiative recommended that changes be
made in state, regional and local government development regulation, controls and
standards to reduce the costs of rental and ownership housing. They also
proposed, and put into place in four demonstration projects, creation of an
incentive program to reward local governments who remove barriers to the
production of affordable housing (by at least $7,500 per unit) through permanent
17
changes in government fees, regulations and processes.28 It is too early to
determine the success of these projects.
Metropolitan Council's Livable Communities Act
Using the 30% of income standard for affordable housing costs and considering
the prevailing maximum income limits for housing assistance programs, the
Metropolitan Council sets benchmarks for communities to use when defining
"affordable" housing. Based on 1999 levels, an income at 80% of median, or
$50,880, could buy a home up to $134,250 which would be considered affordable.
For rental housing, an income at 50% of median, $31,800, could afford a monthly
rent, including tenant paid utilities of $715 for a two-bedroom apartment or $826 for
a three-bedroom apartment.
The Metropolitan Council's Livable Communities Act provides a framework for
many Twin Cities communities to plan for affordable housing. The Council
provides $12 million per year to 101 participating cities. The goal is to create
13,000 rental units over 15 years; however, it is falling behind and may produce
fewer than 10,000 units. This number of units is well below the Council's identified
need of 115,000 units. The Livable Communities Act provides incentives to create
"affordable" units for households with incomes up to 80% of the area median
income. This definition of "affordable" means units-produced to comply with the
Act are not affordable to those earning less than 80% of the median income.
Affordable homeownership opportunities are also very limited. Production goals
for owner-occupied affordable housing, established under the Metropolitan.
Council's Livable Communities Act, are expected to fall short by nearly 7,500
units.29
Metropolitan Council Policy Has Detractors
Because of current Metropofitan Council policy on the meaning of
"low income,"a $200,000 house mortgaged at $165,000 is regarded
as affordable, Iow-income housing. As a result, builders and
municipafities can participate in Iow-income housing programs
without building a house costing less than $200,000." 3o
The critics of the Livable Communities Act feel that a number of factors are
contributing to the Act not living up to expectations. These factors include the
voluntary nature of its provisions, how affordability is defined, and the goalsetting
and benchmarking methodology. A study by the University of Minnesota's Center
for Urban and Regional Affairs concluded that "the aggregate result of the program
will be a decline in the percentage of the Twin Cities area housing stock that is
affordable.''3~
Because the Metropolitan Council has little authority to implement its plans, each
municipality's participation is voluntary. Some communities use zoning authority,
building codes, lot size requirements, etc. to limit Iow-income housing while
18
attracting high-income housing. The incentives for municipalities are to attract
more expensive homes and commercial development to generate higher property
tax revenue while discouraging Iow-income housing to dampen the need for social
services. As a result, some would argue that public intervention with powerful
incentives is vital to provide affordable housing.32
Multi-tenant Housing May Not Use As Many Resources As Single Family
Conventional wisdom has it that multi-tenant housing uses more community
resources than single-family housing. According to the National Multi Housing
Council and the American Housing Survey, multi-family units average .5 children
per unit compared to .7 in single family homes.33 Therefore, on a per unit basis,
more dense housing does not necessarily create a greater impact on local schools.
Also, professional cost studies show that the cost for city services (streets,
sidewalks, water, sewer, storm drainage, etc.)increase according to the number of
linear miles serviced. Multi-family units become less expensive to serve with these
type of services than single-family units because they require fewer linear miles of
service per unit.
Multi-family units also average 30% to 40% fewer automobile trips than single-
family households so add less to traffic congestion and require less frequent road
repairs.34 Therefore, in communities which impose minimum charges per unit for
sewer or water service, a rental housing structure in one community can pay
several times more than an identical building where fees are based on actual cost.
Adding New Affordable Housing To Communities is Politically Difficult
A 1999 survey by the Na[ional Association of Home Builders illustrates the
difficulties communities have when exploring options to add affordable housing.
The survey of 10 metro areas, including the Twin Cities, shows that 78% of people
oppose building multifamily apartments in their neighborhood, 75% oppose
building single-family homes on smaller lots in their neighborhood and 54% oppose
building townhouses in their neighborhood. Conversely, when asked what
measures people would support to make housing more affordable in their area,
one-third said none, 29% would support providing government assistance to
homebuyers and 31% would support using a flexible approach to protecting the
environment i.e. reducing energy conservation requirements, use of wetlands,
etc..35
19
Response Needed
The overriding goal of these options for response is to increase the amount of
housing available that is affordable to people at all income levels and to ensure
that people can sustain themselves in their housing. The committee also
recognizes that there are some people in our communities who will need ongoing
support and services.
We believe that these recommendations must be part of a package of solutions
working together, rather than acting on any one piece alone. County social service
directors may need to focus their specific energies on supportive housing issues,
but for these efforts to be successful, options two through four need to be in place.
Response Option 1: Recognize the need for and increase funding to obtain
supportive housing services for individuals and families who need either
temporary or ongoing services in order to secure and maintain their housing.
Recognize that there are families and individuals with multiple barriers to
sustaining housing. Social services will need to include partnerships with
landlords, developers and others to assist these families long-term. Owners
are more willing to rent to high risk applicants if-supportive services and
interventions are available.
- Supports are needed for people with bad credit histories, mental
disabilities, criminal records, past behavior difficulties and others for
whom acquiring rental housing is difficult in this low vacancy era.
Comprehensive strategies need to be developed that include more state and
federal funding for a variety of housing and supportive services. Expand HUD
funding for supportive services to those with Section 8 vouchers.
Increased collaboration needs to occur at the state level among agencies with
the mission of providing/increasing housing options. Special concern is for the
Minnesota Housing Finance Agency to work with the Department of Human
Services and the Department of Economic Security to provide housing options
for the disabled, mentally ill and those transitioning from welfare to work.
Response Option 2: A fundamental restructuring needs to occur in order to
stimulate new development. Because the scope of providing affordable
housing is so large, this development will take the concerted efforts of the
public, private, non-profit and foundation sectors to begin to resolve the
problem.
Public Sector
· The public sector should fill the leadership vacuum on the issue of affordable
housing in order to coordinate information and bring all constituencies together.
2O
Leadership is especially needed to maximize revenues, coordinate technical
assistance, change zoning and regulations, and adopt new laws.
In addition, it should be the public sector's responsibility to reduce building and
land costs as much as possible to allow for development of affordable housing.
Some of the ways this can happen include:
Restore incentives in the Federal Tax Code for the private sector to build
and maintain affordable housing and expand the Low-Income Housing
Tax Credit (LIHTC).
Encourage more federal and state funding for housing to be in the form
of block grants to allow for county and city flexibility in meeting local
needs. Increase the amount of block grants currently issued to local
governments and nonprofit housing partners through CDBG (Community
Development Block Grant) and HOME Investment Partnership Program.
Increase funds for tax exempt bonds that states can use to provide Iow-
interest loans for constructing affordable housing and remove the cap on
the volume of bonds allowed.
_
Reduce the Minnesota property tax rate on rental housing to the same
rate as homestead property for all properties renting to tenants at 50% of
median income or less.
- Increase grants td developments that will allow for debt-free housing for
residents who have less than 50% of median income.
Encourage changes to zoning and other local ordinances which are
barriers to new affordable housing developments. Provide financial
incentives for communities to lower development costs such as large lot
size requirements, park dedication fees, Iow density zoning and other
regulations for new construction which drive up prices of new housing.
Incorporate mixed use housing into local planning creating income-integrated,
multi-generational developments without concentrating poverty. Call for long-
term subsidies to allow ongoing operations of buildings to be debt-free.
Encourage on-site amenities in subsidized developments which will meet the
needs of Iow- to moderate-income residents such as on-site daycare and public
transportation hubs.
Support additional funding for the Metropolitan Council Livable Communities
Act (LCA) giving priority to communities to help them achieve their LCA
Affordable and Life Cycle Housing goals.
21
Private Sector
Recognize the lack of affordable housing as an economic development issue
and institute partnerships with other sectors to increase the supply of affordable
housing.
Support development of single-occupancy efficiency apartments for entry-level
workers near transit and jobs, including industrial parks.' Current and former
models of this type of housing include nurses dorms, YWCA, Kate Dunwoody,
Exodus Hotel, Redeemer Arms and Wellspring.
Expand use of employer-assisted housing such as through the Employer
Assisted Housing Programs of the Greater Minnesota Housing Fund.
Examples of the role for private funding can include direct grant contributions to
develop affordable housing, downpayment assistance for employees, purchase
of Low Income Housing Tax Credits at a premium rate, providing Iow interest
construction loans and contributions of land or other infrastructure.
- A specific example of this kind of private contribution is First Homes in
the Rochester area. Mayo Clinic is the major funder for a program to
build 500 ~starter homes for single-family occupancy and 375 rental
townhomes in the' next five years for workers who make $7 to $14 an
hour.
· Support the work of Habitat for Humanity through direct contributions and
donations of employee's time.
Non-profit/Foundations
· Establish collaborations with private, non-profit and government partners to
address the need for more affordable housing.
Consider becoming the entity which owns/manages a Community Land Trust.
A Trust allows an entity to own the land but individuals own their own home
which allows for homeownership at more affordable rates.
Response Option 3: Because of the high cost of land and building costs,
everything possible must be done to maintain and restore the existing
supply of affordable housing.
Support HUD in its efforts to keep projects within the Section 8 program after
their mortgages are paid off. Also support raising the rental rate cap for Section
8 housing certificates. Increase the number of certificates available and work to
increase the supply of units accepting them.
Make the transfer of abandoned, foreclosed and tax-forfeited properties more
efficient so that affordable in-fill can 'occur.
22
Encourage and support homeowner rehabilitation and improvement programs
that assist Iow- and moderate-income residents to maintain and improve the
quality of their homes.
· Support financing options for owners of rental properties to maintain, improve,
and upgrade existing rental housing.
· Restructure tax incentive policies as a means of encouraging rehabilitation of
housing and grants to make weatherization and energy improvements.
Support local efforts to productively use existing resources.
- Provide grants to pay for costs to allow older homeowners to sub-divide
their home. The house would revert to single family when the property is
sold.
Response Option 4: All players need to work together to recognize the
extent of the problems caused by a shortage of affordable housing and
support efforts to change attitudes which are barriers to increasing its
supply.
Support and partner with the strategic communication plan begun by the
Minnesota Housing Partnership to educate the public regarding the long-term
benefits of affordable housing and to dispel its negative image.
Create a "Parade of Homes" of affordable housing to help ease concerns
among many communities about the quality of affordable housing.
23
Endnotes
i Ellen Hart-Shegos, The Supportive Housing Continuum: A Model for Housing
Homeless Families, Family Housing Fund, Minneapolis, December, 1999, p. 22.
2 Megan Sandel, Joshua Sharfstein, and Randy Shaw, There's no place like home:
How America's housing crisis threatens our children, Housing America, San
Francisco, 1999, pp.7-8.
3 A Report From The Kids Mobility Project, A Joint Effort by the Family Housing
Fund, Hennepin County, and Minneapolis Public Schools, March 1998, p. 15.
4 "Explaining the Shortage of Affordable Housing." Community Dividend, Federal
Reserve Bank of Minneapolis, Fall, 1998, p. 5.
5 Minnesota Top 100 Occupations, Minnesota Department of Economic Security,
Research and Statistics Office, January, 1999.
6 Diane Rydrych, and Laura McLaine, Health Care Worker Shortages in
Minnesota, Minnesota Department of Economic Security, Research and Statistics
Office, November, 19_98, p. 14.
7 The Cost of Living in Minnesota, Jobs Now Coalition, St. Paul, Minnesota, 1998,
as reported on http://www.cdf-mn.org/FactsAboutKids/
what is the_poverty_line.htm.
8 Gary Cunningham, and Steve Keefe, Help Wanted: More Opportunities than
People, Citizens League, Minneapolis, Minnesota, November, 1998, p. 30.
http ://www.citizensleague. neb'studies/labor-shortage/report.htm.
9 Minnesota Statewide Survey of Persons Without Permanent Shelter, Volume 1:
Adults and Their Children, Wilder Research Center, Amherst H. Wilder Foundation,
St. Paul, Minnesota, June, 1998, p. xii.
lO Working Doesn't Always Pay For A Home, Family Housing Fund, Public
Education Initiative, Minneapolis, Minnesota, July, 1998, p. 1.
11 Working Doesn't Always Pay For A Home, p. 4.
12 Working Doesn't Always Pay For A Home, p. 1.
13 The State of the Nation's Housing 1999, Joint Center for Housing Studies of
Harvard University, Cambridge, Massachusetts, p. 26.
44 Building Communities and New Markets for the New Century: 1998 Consolidated
Report, U.S. Department of Housing and Urban Development, p. 34.
24
The State of the Nation's Housing 1999, p. 25.
~6 The Need For Affordable Housing In The Twin Cities, Family Housing Fund,
Public Education Initiative, Minneapolis, MN, July, 1998, p. 1.
17 Twin Cities Habitat for Humanity, http://www.tchabitat.org/habifacts.asp.
~8 Twin Cities Habitat for Humanity, SF Reports, Minneapolis, MN, July, 1999, p.
14.
~9 Council of Metropolitan Area Leagues of Women Voters, CMAL Affordable
Housing Study, May, 1999, p. 3.
20 Affordable Housing Issues in the Twin Cities, Family Housing Fund, Public
Education Initiative, Minneapolis, Minnesota, July, 1998, p. 2.
21 Emergency Shelters, Transitional Housing and Battered Women's Shelters Data
Collection Project, Seventh Annual Report, Wilder Research Center, Amherst H.
Wilder Foundation, St. Paul, Minnesota, June 1998, p V.
22 The State of the Nation's Housing 1999, p. 28.
23 The State of the Nation's Housing ~ 999, p. 24.
24 State of the City ~999, City of Minneapolis Planning Department, Minneapolis,
Minnesota, January, 2000, p. 17.
25 Minnesota Housing Finance Agency, Resource Materials provided by
Commissioner, October 6, 1999.
26 Housing Reform Initiative, Metropolitan Council, St. Paul, Minnesota, February
5, 1999, p. 2.
27 National Association of Home Builders, "The Truth About Regulations and The
Cost of Housing," 1995, p. 3.
28 Housing Reform Initiative, p. 2.
29 Dave Beal, "Apartment vacancies show no sign of rising," St. Paul Pioneer
Press, 6 March, 1998.
30 The Faithful City... Guidance for Growth in the Twin Cities Region, JRLC
Position Paper on Metropolitan Development, Joint Religious Legislative Coalition,
Minneapolis, Minnesota, 1999, p. 7.
25
31 Edward G. Goetz, and Lori Murdock, Losing Ground: The Twin Cities Livable
Communities Act and Affordable Housing, Center for Urban and Regional Affairs,
Minneapolis, Minnesota, 1998, p.1.
32 The Faithful City, p. 8.
33 Growing Smarter With Apartments: Toward More Livable and Prosperous
Communities, National Multi Housing Council, Washington, DC, 1999, p. 4.
34 Growing Smarter With Apartments, p. 4.
35 Consumer Survey on Growth Issues, National Association of Home Builders.
http://www.nahb.org/main_features/sma~_survey.htm.
36 Sandel, p. 10.
37 The State of the Nation's Housing ~999, p. 27.
38 Diminished Choices 5: The Ever Shrinking Market for Section 8 in Suburban
Hennepin County Minnesota, HOME Line, St. Louis Park, Minnesota, October,
1999, pp. 3-4.
39 Federal Housing Resource Guide, Boston, Technical Assistance Collaborative,
1999. http://www.c-c-d.org/housing_guide.html.
40 Wilhelmina Leigh, "1998 Federal Housing Legislation: Reality and Potential,"
Poficy and Practice of Pubfic Human Services, December, 1999, pp. 6-9.
26
ApPendix A
Federal Government's Role in Affordable Housing
The current philosophy of the Federal Government is to provide rent subsidies to
individuals through Section 8 vouchers rather than publicly funded building
projects. The Section 8 program serves nearly three million families nationwide.
However, even though 60,000 new vouchers were obtained by HUD for FY2000
and 120,000 new vouchers are planned for FY2001, the supply of rental properties
accepting these vouchers is not enough to meet demand.
The project-based Section 8 program provides subsidies tied to specific privately
owned properties. A study of the National Housing Trust in February 1999 found
that during the past two years nearly 100,000 project-based units were lost from
the nation's affordable supply. This occurred through the owners' termination of
their Section 8 contract by pre-payment of the HUD-insured mortgages or by
"opting out" of their subsidy contracts when they expire. Rents increased an
average of 50 percent for the newly unsubsidized units.36
Of the 4.5 million unit subsidies directly provided by the federal government, 1.4
million are portable and can be used for any unit that meets minimum federal
standards. The other 3.1 million subsidies are tied to specific units - roughly 45%
of which are in public housing and the balance in privately owned buildings. During
the next five years, contracts on two-thirds of all Section 8 units in the country-
involving 14,000 properties and 1 million apartments - are set to expire. 3z
HUD Working to Preserve Stock of Affordable Housing
To better preserve this stock of affordable housing properties, HUD is using the
Emergency Initiative to provide market rents to below-market properties most likely
to opt out. They are also using various means to ensure that good properties
which have paid off their HUD mortgages have incentives offered to continue their
affordability.
These project-based units are difficult to replace at today's costs. Although
tenants' choice is somewhat reduced with project-based programs, they increase
the housing stock, provide control over rental cost escalation and give less
attractive tenants (bad credit, criminal history, etc) housing options not found on
the private market. Section 8 vouchers have only been able to be used for rental
units that charge at or below the Fair Market Rent (FMR), further limiting the supply
of housing available to Iow-income households.
The current FMR in the Twin Cities is $666 per month for a two-bedroom
apartment including utilities and $901 for a three-bedroom unit. However, a recent
study of Hennepin County rental units found that 75% of units surveyed have rents
higher than the FMR. The FMR rose only 2.7% in October, 1999 but rents in the
metro area are rising 6.7% annually.38
27
Financing For Construction Difficult to Acquire
Rents that Iow-income households can afford only cover operating expenses,
rather than enough to cover debt for purchase and/or rehabbing a property.
Because of this situation, it often takes seven or eight or more funding sources to
finance the debt for constructing a project and three to five sources for
rehabilitation. No one organization or agency has enough financial capability to
develop a project on its own. The need for numerous sources of financing
necessitates significant coordination in policy development and use of compatible
standards.
Low-Income Housing Tax Credit
The federal Tax Reform Act of 1986 also altered the benefits of investing in low-
income housing which has resulted, over time, in many disinvestments from Iow-
income housing. Although the Low-Income Housing Tax Credit (LIHTC) took its
place, the trend toward less rental real estate continues. Also, LIHTC encourages
private investment in the production of affordable housing for tenants with incomes
of 60% of the area median or less. This has typically not been sufficient to assist
families earning at or below the federal poverty line (about 30% of median income).
1998 Federal Housing Legislation
The Quality Housing and Work Responsibility Act of Fiscal Year 1998. partially.
devolves the authority for operating and managing federally assisted housing. The
act lessens the federal role and expands the role for Public Housing Authorities
(PHAs) and residents to make decisions and determine the housing situation for
Iow-income families. Some of the changes in PHAs role include allowing them to
establish preferences for selecting tenants and, broadly, to give them authority to
revitalize the neighborhoods in which obsolete Iow-rent public housing units are
located. This can include demolition or sale of units, economic development
activities that promote self-sufficiency and leveraging other resources such as
retail facilities, supportive services and jobs. PHAs are required, however, to make
not less than 75% of their Section 8 rental subsidies available to households
whose incomes are less than 30% of the Area Median Income.39
One of the major changes of this act is the merger of the Section 8 certificate and
voucher programs. The two programs now act essentially the same as the
voucher program did. This program makes payments to the owner that are limited
by the Fair Market Rents (FMRs). The certificate program had renters pay 30% of
their adjusted monthly income and Section 8 paid the rest directly to the landlord.
So, while Iow-income families now have access to all standard quality units in a
housing market regardless of rent level, if families choose housing costing more
than FMR, they have to pay the balance.4°
28
Appendix B
Results of Survey of County Social Service Directors*
Metro
Counties**
% Metro
Rating 6 or
Above
All
Counties
% All
Counties
Rating 6 or
Above
Out-of- Children's
home Child Health Health
Placements Protection Care Problems
6.08
5O%
3.88
24%
5.75 6.58 6.83
5O% 67% 83%
3.89 3.45 4.65
24%
13%
21%
i
Family
Homelessness
8.58
5O%
4.60
24%
Metro
Counties
% Metro
Rating 6 or
Above
All
Counties
% All
Counties
Rating 6 or
Above
Adult
Homeless- Domestic School
ness Violence Attendance
9.17
5.17
100% 5O%
4.7O 3.89
24%
24%
6.83
83%
4.78
29%
School
Performance
Parental
Engage-
ment in
School
7.17 7.42
83%
5.06
37%
83%
4.91
32%
* See attached survey for more complete description of each item.
** Average degree to which lack of affordable housing affects county social service
agencies (0=No impact, 10=Crisis Situation). Metro Counties: N=6; All Counties'
N=38.
29
Metro
Counties
% Metro
Rating 6 or
Above
All
Counties
% All
Counties
Rating 6 or
Above
Dislocation
of Elderly
2.41
O%
2.70
11%
Frail
Elderly
4.08
5O%
3.41
16%
Detox
Use
3.75
O%
3.77
21%
Chemical
Dependency
5.50
5O%
3.89
21%
Emotional/Mental
Health Children
6.00
83%
4.76
26%
Metro
Counties
% Metro
Rating 6 or
Above
All
Counties
% All
Counties
Rating 6 or
Above
Emotional/
Mental
Health
Adults
5.33
Job
Difficulty
5.00
5O% 33%
4.93
4.84
Poor Job
Retention
5.17
33%
4.99
Lower
Wages
3.17
33%
3.83
Transpor-
tation
Issues
5.67
67%
5.34
32% 32% 39% 26% 45%
Metro
Counties
% Metro
Rating 6 or
Above
All
Counties
% Ali
Counties
Rating 6 or
Above
Correctional Corrections
Transitions Recidivism
4.67 4.60
Increased
Crime
4.60
33% 33% 33%
4.03 3.56 3.62
18% 16% 18%
3O
MACSSA Legislative Subcommittee on Housing
Survey of How Supply of Affordable Housing Impacts Social Services
In your county, to what degree does the availability, or shortage, of affordable housing contribute to
the following areas? Rate each item on a scale of 0 to 10 with 0 meaning there is no impact and 10
meaning there is a crisis situation due to the supply of affordable housing.
Name of County
Contact Person/Phone Number
Rating system: No impact at all = 0
Crisis = 10
· Degree to Which Supply
of Affordable Housing
Contributes to Issue
Children and Families Issues
Increased or prolonged out-of-home placement of children
Child protection cases opened or prolonged
Lack of continuity in delivery of preventative healthcare (i.e. vaccinations)
Children's health problems (asthma, lead-based paint, poor nutrition)
caused by or exacerbated by lack of consistent housing
Increased or prolonged homelessness of families
Increased or prolonged homelessness of adults
Increased reports of domestic violence
School Issues
School attendance problems in children
Problems with school performance for children
Lack of parental engagement in schools
Senior Issues
Dislocation of elderly
Frail elderly living in unsafe conditions
Emotional/Mental Health Issues
Increased detox use
Chemical dependency treatment failures
Emotional/mental health problems for children
Emotional/mental health problems for adults
EconomicfVVork Issues
Difficulty securing jobs for welfare-to-work clients
Poor job retention
Lower wages for welfare-to-work clients
Transportation issues (difficulty getting between home/work)
Criminal Justice Issues
Failures in transition from correctional facilities to community
Increased corrections recidivism
Increased crime/criminal activity
Additional Comments/Anecdotal Evidence
31
Appendix C
Committee Membership
The Minnesota Association of County Social Service Administrators (MACSSA) Legislative
Committee charged a sub-committee to study the issue of affordable housing, how the
current status of housing affects clients' lives and what responses might need to be made to
the affordable housing situation. The committee was chaired by Ruth Krueger, Deputy
Director of Employment and Economic Assistance, Dakota Couhty. A total of fourteen
people related to MACSSA and/or the housing community took an active part in the work of
the committee through the completion of the study. In addition to Chair Krueger, they were:
Jim Anderson, Ramsey County
Marian Brandt, Sibley County
Linda Ewen, Anoka County
Nicki Foster, Minnesota Housing Partnership
Cheryl Hanks, Anoka County
Deborah Huskins, Hennepin County
Maribeth Lundeen, Dakota County
Monty Martin, Ramsey County
Tina O'Malley, Washington County
Tonja Orr, Minnesota Housing Finance AgenCy
Maureen Seliski, Hennepin County
Diane Sprague, Minnesota Housing Finance Agency
Marge Wherley, Hennepin County
Kirsten Bansen Weigle, Minnesota Housing Partnership
The Draft report will be discussed, edited and improved by the entire MACSSA
membership before being finalized.
Committee Meetings and Resources
The committee met for the first time on September 22, 1999 and concluded its work on
April 12, 2000. The committee studied a large and varied amount of printed materials
arid heard from the following resource speakers:
William Blazar, Senior Vice President, Minnesota Chamber of Commerce
Karen Christofferson, Public Policy Director, Builders Association of the Twin Cities
Tom Fulton, Family Housing Fund
Katherine (Kit) Hadley, Commissioner, Minnesota Housing Finance Agency
Warren Hanson, Greater Minnesota Housing Fund
Tom McEIveen, Metropolitan Council
Gene Ranieri, Association of Metropolitan Municipalities
Mark UIfers, Dakota County Community Development Agency
Ed Valencia, Regional Labor Market Analyst, Minnesota Dept. of Economic Security
Kirsten Bansen Weigle, Policy and Public Education Director, MN Housing Partnership
Staffing
This report was completed by Nancy Nystuen, Management Analyst, Employment and
Economic Assistance, Dakota County.
32
AFFORDABLE
RENTAL HOUSING
Opening Doors for
Private Development and
Preserving Existent
Housing Stock
Affordable
Rental
Housing
~:~ sk :FOrce
TABLE OF CONTENTS
INTRODUCTION
REPORT CONTRIBUTORS
MISSION STATEMENT
,
EXPERT PANEL PRESENTERS
BARRIERS
PROPERTY TAXES
PUBLIC PERCEPTION
LAND AVAILABILITY AND ZONING
GOVERNMENT FEES, CHARGES AND TAXES
4(9) RENTAL PROPERTY TAXES AND SECTION 8 RENT ASSISTANCE
5
8
9
10
13
GOVERNMENT INCENTIVES
14
TAX-EXEMPT BOND ALLOCATIONS
ALIGNMENT OF SMART GROWTH POLICY AND PUBLIC EXPENDITURES
SALES TAX EXEMPTION
14
15
17
INTRODUCTION
The lack of affordable rental housing in
Minnesota has reached a critical level. It
has been the focus of considerable
discussion and media attention recently.
Minnesota communities are impacted by
the shortage; economic development is
stunted, family stability and children' s
school performance are adversely
affected and smart growth principles are
jeopardized.
In the sevcn county metropohtan area of
Minnesota, building permits for
multifamily housing were consistently at
a level of 61,600 units per decade for
both the 1970s and 1980s. According to
Metropolitan Council data for the period
1990-1997 (available figures),
multifamily permits dropped to 19,748.
(over a 60% decline). During the past
two decades, there has been a substantial
decline in federal support for subsidized
housing and the 1986 tax reform act
adversely impacted market rate
construction. However, these two
factors do not explain the
disproportionate percentage drop in
Minnesota's rental housing construction
during the decade of the 90s compared
to other states. In addition, to the
dramatic decrease in production,
thousands of rental units have been
demolished and not replaced.
As the supply of affordable rental
housing declined dramatically in the
1990s, demand increased. This resulted
in a historical low vacancy rate of 1.5%
and increased rents. A strong local
economy and low employment rate are
drawing more people to Minnesota.
Approximately 30% of Minnesota
households are renters; however,
continued economic growth and an
aging population will increase the
demand for various types of lifecycle
housing.
The Affordable Rental Housing Task
Force was designed as a broad-based
think tank to explore solutions to the
state's shortage of affordable rental
housing. Although many organizations
and groups have also looked at the issue,
there had not been a focus on identifying
the barriers, which'Contribute to private
industry's inabilky to provide an
adequate supply of rental housing in
Minnesota. The Task Force membership
represents key constkuencies concerned
about this issue with an emphasis on
providers of housing both nonprofit and
for profit.
Barriers identified by the task force
include high property taxes, hostile
public attitudes, hck of land availability
and restrictive land use regulations,
cumbersome municipal review processes
and excessive costs. One of the most
significant barriers to the development
of affordable multifamily housing in
Minnesota are high property taxes,
approximately double the national
average. Private sector builders and
investors are unable to "make the
numbers work" in Minnesota compared
to other places in the county. The task
force developed creative solutions that
could make Minnesota more competitive
in the multifamily rental housing market.
REPORT CONTRIBUTORS
Colleen Carey, The Cornerstone Group, Inc.
Gary Fields, Minnesota Department of Trade & Economic Development
Kevin Filter, Glaser Financial Group, Inc.
Steve Frenz, JAS Apartments
Tom Fulton, Family Housing Fund
Para George, ReM Estate Equities, Inc.
Howard Goldman, U.S. Department of Housing & Urban Development
Dan Goldman, Twin Realty Investment Company
John Hagen, Minnesota Department of Revenue
Chip Halbach, Minnesota Housing Partnership
Jack Homer, Homer Law Office
Doug Mayo, CommonBond Communities
Tom McElveen, Metropolitan Council
Lee Meier, Northwest MN Multi-County Housing and Redevelopment Authority
Bob Odman, Minnesota Housing Finance Agency
Tonja Orr, Minnesota Housing Finance Agency
Guy Peterson, Metropolitan Council
Sue Watlov Phillips, Elim Transitional Housing
Mary Rippe, Minnesota Multi Housing Association
Lee Schutz, Minnesota Planning
Laura Sether, Minnesota Planning
Dave Thies, Thies & Talle Management, Inc.
This public, private partnership of developers, financial representatives,
government officials, nonprofit leaders and apartment owners came together with
ideas and suggestions to solve a shared problem. The ideas, issues and proposed
solutions in this report are not necessarily those of the organizations they represent.
MISSION STATEMENT
The goal of the Affordable Rental Housing Task Force is to develop recommendations to
encourage more efficient and cost-effective private sector involvement in the preservation
and production of rental housing in Minnesota. The Task Force will focus on ways to
create a healthy rental housing market in greater Minnesota and the metro area by
identifying the barriers to providing and producing rental housing and recommending
solutions. A goal of the Task Force will be to look at ways to build upon existing
programs and create new strategies as necessary to make our resources work better.
EXPERT PANEL PRESENTERS
Norm Bjornnes
Namron Company LLC
Colleen Carey
The Cornerstone Group, Inc.
Mark Haveman
State of Minnesota
Minnesota Planning
Environmental Quality-Board
Frank Lang, President
Lang-Nelson Associates, Inc.
Tim Mardell, MAI Principal
Mardell, Amundson, Jolmson, Leirness
Stu Nolan, Owner
Stuart Corportation
Michael Podawiltz, President
Podawiltz Development Corporation
Mark Sween, Vice President of Asset Management
The Paramount Companies
Paul Sween
Development & Acquisitions
Dominium Management
BARRIERS
PROPERTY TAXES
B ack;,round/Problem
The Task Force identified property taxes
on Minnesota apartments as a very
significant, perhaps the most significant,
impediment, to building needed
apartments. The Task Force found that
Minnesota's property tax system
imposes an excessive burden of taxation
on an essential industry, namely rental
housing. In addition, the property tax
impediment has a dkect and easily
understood solution. The legislation
needed to enact the recommendations in
this area is well understood by many
legislators and by a broad range of
people involved in attempting to produce
affordable housing, and by people who
have been involved in reforming
Minnesota's property tax system.
Reducing apartment property taxes
especially helps to provide middle
market rental housing. At present,
virtually ali apartments being built in
Minnesota are either very high rent
apartments in which the market rent is
sufficient to pay the property taxes and
m~e the project economically feasible,
or government subsidized rental
housing. Construction of more rental
housing in all rent levels helps all those
who rely on rental housing, including
low-income residents. An adequate
supply of rental housing reduces the
pressure on all housing, including low
income rental housing, stabilizes rents.
by creating competition and allows a
wider range of choices for all rental
housing residents, including those with
low incomes.
Recommendations/Proposed Solutions
1. Enact legislation to reduce the
property tax statutory class rate
for rental housing in Minnesota
over a three-year period to be the
same as the homestead tax rate.
,
Enact legislation to reduce the
class 4d statutory class rate for
low-income apartments
proportionately as the property
tax rate for market rate
apartments is reduced.
o
Amend the tax abatement law to
increase utilization for new rental
housing construction projects.
Allow the state to match with its
funds the amount of property
taxes abated by local taxing ~
jurisdictions. Provide for
delayed assessment of qualified
rental housing rehabilitation.
.
If the limited market value law
continues for single family
homes, cabins, and 1-3 unit
rental properties, or some other
form of capping assessed values
of properties is enacted, the law
should be made applicable to
apartments as well.
o
Long term efforts to reform
Minnesota's property tax and
school and local government
funding system should continue.
In particular, the use of state
funds to finance the kindergarten
through twelfth-grade education
system, as well as other major
statewide services, such as the
district courts, should continue to
grow. The state should increase
broad programmatic funding in
these areas, and not rely on
credits that benefit specific
classes of property, such as the
education homestead credit, to
provide property tax relief.
Rationale for Proposed Solutions
Property Tax Class Rate:
For taxes payable in the year 2000,
market rate apartments will pay property
taxes at a statutory class rate of 2.4%.
Homesteads will pay 1% on the first
$76,000 of value and 1.65% on the value
over $76,000. Since most apartment
units and their proportional share of the
value of the common area and land are
less than $76,000 in value, apartments
pay property taxes at 240% of the rate
applicable to homesteads. That is, on
equivalent value an apartment pays 2.4
times the property taxes levied on a
homestead.
In the year 2000, the Research
Department of the Minnesota State
House of Representatives projects that
market rate apartments will pay
approximately $246,000,000 in property
taxes statewide. The effective tax rate
(taxes divided by market value) of all
apartments statewide on average next
year is projected to be 3.2%.
Meanwhile, the effective tax rate for
homesteads in the year 2000 on
statewide average is 1.4%. If apartments
paid property taxes at a 1.4% effective
tax rate, instead of their 3.2% rate,
apartments would pay approximately
$108,000,000 statewide instead of
$246,000,000 in the year 2000.
Consequently, rental property pays
$138,000,000 more than ff apartments
were taxed as homesteads. The Task
Force could find no justification for this
huge disparity.
By drawing so much revenue from
apartments, Minnesota's property tax
system makes new apartment
construction generally unfeasible. The
property tax either forces the required
rents higher than can be obtained in the
market or effectively reduces the value
of the apartment unit. In Minnesota the
net effect in either case is that builders of
moderately priced rental housing often
cannot attract investment capital because
they cannot demonstrate sufficient return
to the investor. They also cannot obtain
adequate mortgage loan funds because
they are unable to demonstrate that the
property can repay the loan to the
satisfaction of a lender.
Data provided in testimony by
experienced developers indicate that the
effect of taxing apartments at the 2.5%
rate effective in 1999 versus a 1%
homestead tax rate results in addkional
monthly rent required of $50 to $85. If
the property tax burden is capitalized, it
produces a reduction on the amount of
mortgage that can be supported by the
unit ranging from $6671 to $11,336.
These figures frequently spell the
difference between a project's being
feasible or not feasible. A faker
property tax on apartments in Minnesota
would greatly increase the economic
feasibility of developing new
apartments.
4d Low Income Housing Class Rate:
The Task Force determined that class 4d
should be retained even when the
property tax class rate for market rate
apartments is reduced. The Task Force
understands that class 4d will not
produce new housing by itself for
residents with income levels at or below
60% of the median income, which is the
target population for units qualifying for
class 4d. A deep subsidy will be
required in addition to the class 4d
property tax treatment; however, class
4d is extremely useful because it
effectively reduces the amount of
subsidy necessary and it assists in the
preservation of affordable rental
housing. It helps to fill the gap between
available funding and subsidy sources
and the cost of building and operating
the low-income housing. A special
treatment for low-income housing will
perhaps always be needed, and the class
4d property tax treatment is an important
part of that.
Property Tax Abatement and Delayed
Assessment for Qualified
Rehabilitation:
The tax abatement law is a relatively
new program, and so far is generally
unused and is considered cumbersome to
developers and unappealing to cities. A
recommendation to offset the reluctance
of cities, counties, and school d~tricts to
give up tax base, which they do Under
the tax abatement law, would be to
provide that the state reimburse the local
taxing district for 50% of the lost tax
revenue due to the tax abatement. The
tax abatement must be available for at
least a 10-year period for a given
property. A ten year abatement provides
a stabilized income stream which, when
capitalized, will produce enough
mortgage loan proceeds to be an
effective benefit.
Rehabilitation is often an excellent
means of preserving and providing
needed rental housing. However,
rehabilitation can increase the value and
the property taxes payable to the point
where the project becomes unfeasible.
Limited Market Value:
A serious and growing problem in the
taxation of apartments is the increasing
market values of apartments statewide.
The Research Department of the State
House of Representative projects a
statewide average 'increase in apartment
values from taxes payable in 1999 to
taxes payable in the year 2000 of 7.7%,
and a metro area average increase for the
same period of 8.9%, although annual
increases in excess of 20% are not
uncommon. These are sharp increases in
value, and values are projected to
continue increasing in the future.
There is a lot of interest in applying the
limited market value to apartments or in
some way capping valuation increases in
order to provide for smoother 'and more
predictable budgeting. This is
particularly important when the source
of income is residential rent. Sharp
increases in property taxes create
pressure for sharp increases in rent..As a
result, the housing becomes even less
affordable.
The current hmited market value law
that apphes to certain classes of
properties, not including apartments,
works to the disadvantage of apartments
by requiring them to pay additional
property taxes that would otherwise be
paid by the classes favored under the
limited market value law. Therefore, the
Task Force does not specifically call for
applying a value capping technique to
apartments. However, it does include in
its recommendations that ff the current
limited market value law is to continue,
then it should be applied to apartments
as well as the homesteads, small rental
properties, and cabins to which it
currently applies.
Continued General Property Tax
Reform:
Finally, the legislature and the Governor
should continue the effort and the
progress that has been made in the
general reform of the state's property tax
system. In particular, paying from
general revenue for a greater percentage
of the kindergarten through twelfth
grade education system and other
statewide systems, thereby removing
them from reliance on the property
taxes, should continue. The Governor
and legislature should continue its work
on reducing the overall disparities
contained in Minnesota's property tax
system.
The Task Force opposes continued
growth and reliance on _narrow property
tax credits that help homesteads but not
other classes of property, such as the
education homestead credit. This credit
seems to go against the stated principles
of fairness and accountability, which the
Task Force has adopted. It is unfair in
that the state reduces the property taxes
for a favored class of property but not
others. The net effect is that even when
the class rates are the same, one class of
property still continues to be heavily
favored over the others. This is not fair.
Secon. dly, it defeats the principle of
accountability by shielding homesteads
from the full burden of paying for the
benefits they receive. It is better tax
policy, and better for the long range
goals of providing affordable rental
housing, that state expenditures reduce
reliance on property taxes, across the
board, rather than reducing taxes only
for favored classes of property.
Although the Task Force does not
support these narrow credits as such, it is
only fair that ff homesteads continue to
receive the education homestead credit,
rental housing should also receive it.
PUBLIC PERCEPTION
Back~,round/Problem
For business to expand (job creation)
and economic development to occur
there must be an adequate supply of
rental housing. This housing should be
in close proximity to the community
where the jobs are being created. Many
companies have decided not to expand
or move to Minnesota because of the
very tight rental market and the
corresponding lack of housing
production. Further, increased rental
production is necessary to meet the
housing needs of Minnesota's growing
population.
Despite the compelling arguments to
increase housing production there is a
public perception that rental housing will
attract the "wrong types of people" and
as a consequence crime will increase and
property values will fall.
Recommendations/Proposed Solutions
1. A strategic communication plan and
housing campaign should be
developed by the Metropolitan
Council, Family Housing Fund
(FHF), Minnesota Housing Finance
Agency (MHFA), Minnesota Multi
Housing Association (MHA),
Metropolitan Interfaith Council on
Affordable Housing (MICAH),
Minnesota Housing Parmership
(MHP), Greater Minnesota Housing
Fund, HUD and other housing
organizations, to educate the public
regarding the long term benefits of
rental housing and to dispel its
negative image. Resources for the
.
.
,
,
campaign will be identified and
discussions held with experts in
public relations regarding the
message, how to sell it and the most
effective use of media.
Request the Family Housing Fund to
develop a PowerPoint presentation
and written material regarding the
relationship of rental housing to
economic growth and job creation.
Request Family Housing Fund and
Metropolitan Council to develop
written material to refute the claims
that rental housing attracts the
"wrong types of people" causing
crime to increase and property values
to decline. In other words, to
demonstrate that renters are good
neighbors and that the vast majority
of rental properties, including.
subsidized properties, are well
maintained and well managed.
Request the Governor to make public
service announcements regarding the
importance of rental housing to
economic growth and to the growing
Minnesota population and address
public perceptions of rental housing.
The Task Force members will
provide expertise to the Metropolitan
Interfaith Council on Affordable
Housing in making presentations to
local units of government, civic,
community and religious groups.
Rationale for Proposed Solutions
Rental housing is often criticized as
attracting crime, costing more to a
community, decreasing property values,
attracting the "wrong types of people"
and not as valued as home ownership.
This public sentiment is a barrier to the
development of affordable rental
housing. Overcoming neighborhood and
local government opposition to
development of rental housing is
extremely time-consuming and
expensive process for developers, which
increases costs.
LAND AVAILABILITY
AND ZONING
B ackground/Problem
Land availability is an issue of
considerably more significance in the
metropolitan area than in Greater
Minnesota. In many communities in the
. metropolitan area, and in particular in
many developing suburbs, there is either
insufficient land available for
development or redevelopment for rental
housing, or communities are changing
land use plans and zoning to
significantly reduce the supply of such
land. The supply of land to provide the
opportunity for the development of new
rental housing in the metropolitan area is
shrinking, thereby making remaining
sites more expensive and identification
of potential sites more difficult.
Recommendation/Proposed Solution
The Task Force recommends that the
Metropolitan Council, through its local
comprehensive plan review process and
the local zoning ordinance preparation
requirements mandated in the Land
Planning Act (LPA), make a concerted,
afffn'mative effort to monitor and ensure
that communities guide and, then
subsequently, zone enough land so there
can be market place price competition
and the existence of measurable
opportunity for the development of new
rental housing.
Rationale for Proposed Solution
An important way of ensuring that land
is available for the potential
development of rental housing is to
ensure that local comprehensive plans
guide sufficient land for medium, high
or multifamily land use. Subsequently,
follow through with zoning that will
permit builders and developers to
identify parcels appropriate for
development proposals is needed.
The Metropohtan Council has the
statutory responsibihty to review local
comprehensive plans to determine their
consistency with regional system plans
and requirements of the Land Planning
Act. The Council does not have ·
authority to review or monitor the local
zoning ordinance preparation or
implementation following adoptionof
the local comprehensive plan.
Reviewing and monitoring would ensure
that a community's zoning is consistent
with the plan's land use element and
permits implementation of the plan's
affordable and life-cycle housing goals.
The Task Force is recommending that
for local comprehensive plans updated
pursuant to the 1995 LPA amendments,
the Metropolitan Council monitor and
report on these local zoning
implementation efforts and their
consistency with the plans' housing
goals and objectives. This effort would
benefit by the collaboration and
cooperation of local government, largely
through the Association of Metropolitan
Municipalities (AMM).
GOVERNMENT FEES,
CHARGES AND TAXES
OPERATING SERVICE COSTS
B ack~,round/Problem
Units of government sometimes consider
charges imposed on mukifamily rental
housing as a revenue source, rather than
as reimbursement for cost of providing
service. Fees and charges of numerous
kinds are imposed on rental housing that
exceeds the actual cost of providing the
service. Case law has held that a fee or
charge that has no relationship to the
cost of the service, and in fact greatly
exceeds the cost of the service, in fact is
a tax. Legislation should specifically
prOvide that the fee or charge should not'
exceed the cost of providing the service
and that a cause of action is available if
it does.
Recommendations/Proposed Solutions
1. The state Legislature and Governor
should enact and sign into law
legislation providing that fees and
charges imposed on rental housing
by cities and other units of
government should reflect only the
actual cost of providing the service
for which the fee or charge is
imposed.
.
The Minnesota Housing Finance
Agency should conduct research and
compile a sUrvey of fees and charges
imposed on rental housing
throughout the state by various levels
of government, prior to the 2001
legislative session.
.
Legislation should be adopted that
provides a cause of action against a
unit of government that charges a fee
on rental housing properties that is
more than the cost of providing the
service.
Rationale for Proposed Solutions
Rental housing is often charged for
services unfairly in relation to the cost of
service to rental housing. Rental
properties are inherently more efficient
to provide services to than are single
family homes. For example, a street
light fee that is paid by each household
on a given block generates a great deal
more income if a 100-unit apartment is
on the block than ff 12 single family
homes are on the block. However, the
cost of operating the fight is the same in
either case. The same disparity is often
created in street maintenance charges
~d many other kinds of charges.
In many communities a minimum charge
per unit is imposed for sewer and water
service on a building regardless of
consumption. A rental housing structure
in one community can easily pay several
times more than an identical building in
a community whose fees are based on
actual costs.
Cities and counties commonly are
issuers of tax exempt multffamily
housing revenue bonds. The cities and
counties often charge application and/or
issuance fees of up to 1% of the bond
amount, despite AAA bond rating.
Since the issuer is being reimbursed for
its direct cost, the fees are a revenue
source exceeding cost of service.
These charges and excessive costs are
seen in all levels of government.
LOCAL REGULATION AND
APPROVAL PROCESS
B ack.round/Problem
As with the issue of land availability, the
question of the impact of local
regulations and alSprovals seems a more
prominent concern in the metropolitan
area than in greater Minnesota. In the
metropolitan area, even where land is
available for £mancially feasible rental
housing development, the perception is
that rental housing proposals,
particularly affordable rental housing,
which is primarily medium and high
density housing, are discouraged, made
more costly or are outright excluded by
the application of local conti'ols and
regulation. Builders and developers and
their trade associations generally believe
local governments dictate land use
standards and regulation such as density,
parking, street width, etc. and other
design and materials standards and
approval processes that are unnecessarily
burdensome and cost-additive to rental
housing development and rehabilitation.
Howeve:, in the absence of a
compilation and assessment of current,
complete and accurate information
regarding local residential official
controls, this lament is often dismissed
as positioning and posturing by
developers or as an issue unique to few
communities and unrepresentative of
most.
If local official controls are preventing
the development and rehabilitation of
rental housing and affordable rental
housing, the identification of the most
prevalent requirements that warrant
examination and revision can not occur
without flu-st compiling the data and
standards that are currently practiced.
Recommendation/Pronosed Solution
The Task Force recommends that the
Metropolitan Council be asked to
undertake, in collaboration and
cooperation with the Association of
Metropolitan Municipalities (AMM) and
local government and multifamily
housing builders, a thorough and timely
study of local residential development
regulations, standards and local approval
process practices. Only after compiling
an accurate and complete accounting of
these local requirements can an
assessment of common practices and
analysis of their cost implications be
undertaken. The study should be
completed in time for consideration by
the 2001 legislature.
Rationale for Proposed Solution
There has not been a region-wide,
thorough and definitive compilation and
analysis of the local standards and
requirements regulating residential
development and their impact on
housing development costs since the
joint Metropolitan Council and AMM
series of repons in the late '70s and early
'80s.
One way to substantiate claims that local
controls and regulation unnecessarily
impede rental housing development and
rehabilitation is to identify local official
controls that impact the cost of building
rental housing and determine how wide-
spread these requirements and
regulations are and try to quantify their
impact on the cost of building rental
housing.
To do this will require the cooperation of
the very local governments that are the
target of the criticism. Collaboration
with local government through the
AMM to examine this issue has much
greater opportunity for success.
Since all communities in the'
metropolitan area have examined or will
be examining and rewriting their zoning
ordinances within the statutorily
mandated nine-month timeframe
following adoption of their updated local
comprehensive plans, most communities
will not have new zoning ordinances
until the latter half of 2000. However,
much collaboration and coordination
about the parameters, expectations and
ground work for such a study, including
considerable input on the study and the
data to be collected could be initiated
well in advance of the information
gathering in the second half of 2000, and
should involve members of the
Affordable Rental Housing Task Force.
The MetrOpolitan .Council's. role in
regional housing planning and
comprehensive planning review
responsibilities make it the appropriate
agency to lead a study of the issue.
However, timing of comprehensive plan
completion and zoning ordinance
preparation will delay examination of
the issue until the second half of 2000.
BUILDING CODES
B ackground/Problem
Housing developers in Minnesota
encounter two situations with
Minnesota's uniform building code that
increase the cost ofbuilding affordable
housing. One is that the building code is
often interpreted quite differently by
building officials (fire marshals and
building inspectors) in different
municipalities, usually to the real estate
developer's detriment.
Another frequently encountered situation
occurs when building officials, who have
reviewed the plans and issued permits
12
for construction, revisit the plans and
require significant changes that do not
seem to be required by code. Changes to
the plans late in construction are
frequently more costly than plan
revisions made earlier. These required
changes are typically requested at the
time a Certificate of Occupancy is
needed, when the developer has no
option but to complete the required
changes, since the appeals process is
lengthy.
Recommendations/Proposed Solutions
1. Fire marshals and building inspectors
should uniformly enforce statewide
building standards.
,
Any change orders required by local
building officials must be issued in
time for an appeal to be completed
before the anticipated date of
substantial completion.
An expedited appeal process should
be created so developers have the
opportunity to obtain a quick review
and decision by a third party.
.
Request that the Department of
Administration convene a meeting of
developers, architects, builders, city
officials, building inspectors, fire
marshals and local elected officials
to discuss and develop uniform
interpretation of building standards
and create a review and appeal
process that provides quick
resolution of disputes regarding
building code interpretations.
Rationale for Proposed Solutions
1. Uniform interpretation and
enforcement of Minnesota's building
code would reduce developer's risk
and costly design changes.
,
,
.
Eliminating substantial change
orders late in construction would
reduce the cost of producing
affordable housing.
An expedited appeal process would
provide for timely review of
decisions issued by local building
officials.
The Department of Administration is
responsible for administering the
state building code and assisting
clientele in interpreting and applying
the state building code.
4(d) RENTAL
PROPERTY TAXES AND
SECTION 8 RENT
ASSISTANCE
B ackground/Problem
Many owners of rental housing that can
obtain lower property taxes through the
state's 4(d) classification are not doing
so because they are concerned about
losing the flexibility to promptly evict
disruptive, rent-subsidized tenants.
The 4(d) property tax classification
makes available a property tax rate as
low as that provided owner occupied
property. It is available to owners of
rental housing who' commit to keeping
their properties in compliance with the
4(d) rules. Under 4(d), the owner must
keep the rents of apartments submitted
for this tax classification in good
condition and affordable to households
with incomes at 60% of median. Also,
20% of the Twin Cities apartments
receiving 4(d) status must be made
available to families with Section 8
certificates. (For Greater Minnesota,
10% of apartments must be available
under Section 8.)
A tenant with a Section 8 certificate pays
30% of his or her income for rent with
the federal government contributing the
balance of the rent payment. The Section
8 program is one of the few resources
available to make housing affordable to
very low-income tenants.
Under recent changes to Section 8
regulations the local public housing
authorities that administer this rent
subsidy program have been granted the
authority to allow rental owners to use
month-to-month rental agreements.
Previously, Section 8 leases had to be
annual and automatically renewable.
Rental housing owners state that they
have been less likely to participate in the
Section 8 program and therefore not
willing to apply for 4(d) property tax
status because of the.one-year lease.
They were concerned that it would be
too difficult to cancel the lease and evict
a tenant who was being disruptive.
Recommendation/Pronosed Solution
Work with the Minnesota Chapter of the
National Association of Housing and
Redevelopment Officials (NAHRO) to
encourage its local housing authority
members to permit month-to-month
leases for Section. 8 subsidized tenants.
Rationale for Proposed Solution
If the month-to-month lease is available
for Section 8 tenants more owners are
likely to both accept families with
Section 8 certificates and apply for 4(d)
property tax status. The lower taxes and
rent restrictions under the 4(d) program
will help to keep rents lower, and the
acceptance of Section 8 certificates will
mean more housing opportunities for
very low income tenants. NAHRO as the
leading trade association for housing.
authorities should encourage the local
housing agencies to make the Section 8
program and 4(d) property tax status
more attractive to rental owners by
allowing month-to-month leases.
GOVERNMENT INCENTIVES
TAX-EXEMPT BOND
ALLOCATIONS
access to federal low income housing tax
credits, another limited resource.
B ackl, round/Problem
One valuable tool available to assist in
the financing of affordable rental
housing is tax-exempt bonds. Tax-
exempt bonds provide f'mancing at a
lower interest rate than is available from
conventional £mancing. In addition, use
of tax-exempt bonds allows owners
Minnesota's share of the tax-exempt
bond authority, based on population, was
$236,270,000 in 1999. Federal law
imposes the volume cap on tax-exempt
bonds. It has not been adjusted for 13
years, despite a 50% increase in costs
due to inflation. Congress has adopted a
14
5-year phased-in increase of
$5/capita/year, beginning in 2003. A
campaign to accelerate the increase was
launched last spring.
The use of tax-exempt bonds for
residential rental projects is restricted by
state law to essentially projects that:
contain single-room occupancy units
and serve very low income persons,
, contain predominantly 2 and 3
bedroom units, or
, are occupied by households with
incomes at or below the tax credit
income limits and meet the tax credit
rehabilitation standard or involve the
f"mancial participation of MHFA or a
local unit of government.
Rents are restricted in these projects.
Recommendations/Proposed Solutions
1. Urge the Minnesota Congressional
delegation to continue to support
acceleration of the volume cap
increase and to identify it as a
priority item for tax legislation in
2001. The phased-in increase of the
volume cap should be accelerated
fom'ard to 2001.
.
Encourage the state Legislature to
increase the amount of Minnesota's
bond cap that is set aside for rental
housing. Fifty million dollars ($50
million) should be set aside from the
housing pool for the next two years
for use on residential rental projects.
.
Encourage the state Legislature to
ease the restriction on the types of
residential rental projects for which
tax-exempt bonds may be used.
Rationale for Proposed Solutions
Of the total tax-exempt bond authority
available in Minnesota, $113,233,000
was designated for housing statewide in
1999. $23 million was set-aside for
rental housing out of the housing pool
and MHFA used $8,885,000 of its
entitlement authority for rental housing.
Combined 28% of the bond authority
available statewide for housing was used
for rental housing in 1999.
An acceleration of the volume cap
increase coupled with a larger set-aside
of bond authority for rental housing
could help increase the production of
affordable rental housing.
Federal law requires some restrictions on.
the incomes of the' households
occupying a portion of the units, but is
less restrictive than state law. Needed
rental units to serve the mid-range of
incomes cannot access Financing with
tax-exempt bonds. Production of these
types of units could be increased ff the
state restrictions were eased.
ALIGNMENT OF SMART
GROWTH POLICY AND
PUBLIC
EXPENDITURES
B ackt, round/Problem
Currently the Metropolitan Council in its
administration of over $150 million in
federal TEA 21 transportation funding
employs a funding application scoring
and ranking process that gives
significant weight to the consistency of ·
individual transportation project
apphcations with Regional BIuel)rint
policy. This encompa, sses several
Blueprint concepts such as intensified
and mixed-use development, housing
near jobs and vice-versa, neighborhood
revitalization and development that
supports life-cycle housing and
diversification of type and cost.
However, regarding an assessment of the
specific affordable and fife-cycle
housing planning performance of the
applicant communities seeking TEA 21
funds, the Council gives little or no
weight to local government efforts and
track record regarding its support as
evidenced by land availability and the
use of official controls to permit or
encourage fife-cycle housing, including
rental housing.
Similarly, in its administration of other
discretionary dollars such as regional
parks funding, or environmental grants
such as recent programs to address
inflow and infiltration of stormwater into
the wastewater system, or its current $7
million plus grant program to address
non-point source pollution, housing and
in particular the production affordable
and fife-cycle housing and the regulation
of land for such, is not on the Co'ancil's
radar screen as it makes grants to local
government.
Recommendations/Solutions
1. The Metropolitan Council should
develop and implement criteria and
standards for the allocation of
Council funding to facilitate and
encourage the development of
affordable rental housing. This
recommendation concerns the
following Council funding activities:
· transportation and transit (e.g.,
TEA21),
· parks and open space,
· wastewater infrastructure,
environment related loan and
grant programs,
,
o
.
· community development/tax base
revitalization and housing.
The Metropolitan Council should
allocate resources at its disposal
giving priority to communities that
have achieved or are making
significant [~rogress in achieving
their Livable Communities Act
(LCA) Affordable and Life Cycle
Housing Goals or to help them to
achieve these goals.
The Metropolitan Council should
also give priority to communities
that are supporting the development
of affordable rental housing by
identifying and Zoning land for
multi-family housing and by
adopting local regulations that will
encourage rental housing
development.
Representatives of the Rental
Housing Task Force should meet
with the leadership of the
Metropolitan Council or its
leadership to request adoption of
these recommendations. Once
adopted, the Council should report
on how these recommendations are
being implemented and report on the
impact they have had toward
expanding the availability of rental
housing in the Twin Cities.
Rationale for Proposed Solutions
The Twin Cities metropolitan area is
growing much faster in population than
it is adding housing. Between now and
2020 planners forecast the need for an
annual production of 15,000 housing
units, with about 1/3 of the needed
housing being rental. This is about two
times the production of rental housing
than is now occurring. Why are
16
incentives needed in the Twin Cities
communities and not elsewhere? While
rental housing is needed across the state
of Minnesota to support the growing
number of households with lower wage
jobs, growing suburban communities in
the metro area often abdicate this
affordable rental housing responsibility
to the central cities and older, first-ring
suburbs. Land suitable and affordable
for rental housing development is much
harder to come by in the Twin Cities.
This is why metropolitan cities need
stronger incentives to locate rental
housing than do their greater Minnesota
counterparts.
Fortunately, metropolitan area cities
have other infrastructure needs and are
often willing to accommodate a limited
amount of rental housing in order to
access other public resources, such as
those controlled by the Metropolitan
Council. This is particularly true in the
case of transportation funding. The
Council, however, must be encouraged
to strengthen its system of allocating
resources under its control in ways that
get the local communities to also accept
and support development of affordable
rental housing.
SALES TAX
EXEMPTION
B ack,round/Problem
Approximately 60% of the costs of new
housing and an even higher percentage
of the costs of rehabilitating existing
housing are materials and supplies.
Sales tax is paid on these materials and
supplies. The sales tax adds to the cost
of producing affordable housing.
Recommendation/Solution
Urge the Minnesota Legislature and
Governor to include a sales tax
exemption for materials and supplies for
the construction of new rental housing.
and qualified rehabilitations for a limited
period of time, fol/owed by evaluation to
determine the effectiveness.
Rationale for Prol~osed Solution
A sales tax exemption could "jump start"
the construction and rehabilitation of
affordable rental housing and qualified
rehabilitation. It could reduce the cost of
units by 4% for example; a $100,000
unit could cost $4000 less if no sales tax
was paid on the material and supplies.
Ill
Joint Center for Housing Studies
of Harvard University
Graduate School of Design
John F. Kennedy School of Government
Principal funding for this report was provided by
the Ford Foundation and the Policy Advisory Board
of the Joint Center for Housing Studies.
Additional support was provided by:
Association of Local Housing Finance Agencies
Fannie Mae Foundation
Federal Home I,oan Banks
Freddie Mac
Housing Assistancc Council
Mortgage Bankcrs Association of America
National Association of Itousing and Redcvelol)ment' Officials
National Association of Realtors
National Council of State ttousing Agencies
National ttousing Endowment
National Low Income Housing Coalition
National Multi Housing Council
Research Institute for ltousing America
Thc opinions exprcssc,l in The State of the Nation's ttousing: 1999 do not ncccssaril);
rcprcsent thc views of ttan,ard Univcrsit); the PoliO' Advisor), Board ofl the loint Ccntcr for
Housinx Studics, the Ford Foundation, or thc other sponsorinx aeoencies,
Executive Summary
18
~ 16
.-' 10
~8
Housing had another record-setting
year in 1998. Home sales reached
new peaks, housing starts topped
1.6 million units, and the value of
residential construction hit an all-
time high. With effective mortgage
interest rates and unemployment
at their lowest levels since the
1960s, the national homeowner-
ship rate climbed to a record 66.3
percent last year (Fig. I).
Notwithstanding these impressive .
achievements, progress on certain
longstanding housing problems
remains stalled. At the same time
that ho~neownership has become a
reality for more Americans than
ever before, the gap between
minority and white homeowner-
ship rates has barely narrowed.
And despite steady gains in both
employment and income, about
four million extremely low-income
renters still pay more than half
their incomes for housing.
Housing Contributes to Expansion
Housing has not only benefited
from the strong economy, but it
has also contributed significantly
to its growth. Total spending on
home building and remodeling
was up nine percent in 1998, to
$300 billion. The blistering pace of
home sales generated about $2.2
billion in additional spending by
homebuyers making improvements
to their newly purchased homesl
What is more, revenues to busi-
nesses and state and local govern-
With 14ortgage Interest and Unemployment Rates
· at 30-Year Lows, Homeownership has Soared
- 67
66
65
I I I I I I I I I I ! I I I I I I I I I I I I I I I I I I I I 56
1966 1970 1974 1978 1982 1986 1990 1994 1998
~ Homeownership Rate ~,~.'=: Effective Interest Rate ~.'.::.~ Unemployment Rate
Note: Bre,~3: ~n hc3tecT~nership series in 1993 is due to chan~e in Cev--~as m~thodolocjqr.
Sources: Hc~w~o'~ership from Census Bureau Series I{-111; effective ~ortga~e
interest rate frc~, Federal Hc~asing Finance Board; un~,n:ployw~nE rate frc~,
Bureau of Labor Statistics·
64 ~
6O ~
59 ~
ments from home selling activity
surged by 17 percent.
Heavy mortgage refinancing activi-
ty also put more money into con-
sumers' hands. A recent Freddie
·
Mac survey reveals that over three
million homeowners took out more
equity in cash last ),ear than they
needed to refinance their loans.
Development Intensifies
Housing production in 1998 stood
at its highest level in more than a
decade. Including manufactured
housing, new homes have been
added at nearly a ~.8 million unit
ann~al rate since 1996. In 17
states, more housing permits were
issued last year t~an during the
previous peak in the 1980s.
The housing boom has rekindled
concerns over the pace and pattern
of development. Between 1990 and
1997, home building activity
exceeded 200,000 units in 8 metro-
politan areas, and 100,000 units in
21 metropolitan areas. Most of this
construction is in medium- and
lower-density counties at the met-
ropolitan fringe or beyond (Fig. 2).
In fact, nearly one million building
permits issued in nonmetropolitan
areas during the 1990s have been
in counties bordering metro areas.
Meanwhile, the nation's largest
cities have experienced varying
rates of groscth. While housing
permits in most locations are up
from early 1990s troughs, a large
number of cities in the Northeast
and Midwest continue to lose pop-
ulation, tn contrast, strong eco-
nomic growth in dozens of large
cities in the South and West con-
tinues to attract new residents.
Homeownership Booms
In the past four },ears alone, the
number of owner households has
grown by 5.4 million. All age and
income groups, household types,
and ethnic and racial groups have
registered homeownership gains.
Remarkably, minorit7 households
have contributed over 40 percent of
this growth even though they ~nakc
up less than 20 percent of all own-
ers. Minorities now account for 30
percent of first-time homebuyers,
up from just 19 percent in 1985.
Even with these advances, though,
homeownership rates among
minorities still lag those of whites
by a substantial margin. A key fac-
tor in this persistent disparity is
education and its returns in the
labor market. For minorities, the
likelihood of becoming a home-
owner increases dramatically with
completion of a bachelor's degree.
But 38 percent of Hispanics and 12
percent of blacks aged 25 to 34
have not even completed high
school. Moreover, even young,
married, college~educated minorities
Development Is Increasingly Concentrated in
Medium- ~--~d Low-Density Counties
Thousands of Permits
Medium
,--
I I I I I I I I
50 100 150 200 250 300 350 400
1990 ~ ~997
Notes: P~pulation de_n~sities defined using 1990 po~a!ation and land area. Each
der~ty category ccntaip~d one-fifth of the US population in 1990.
Sources: Joint Center oou~nt¥ datah~.se; Census D~reau Series C-40.
450
have lower ownership rates than
high school-educated whites with
similar demographic characteristics
-- in large measure because minori-
ties still earn lower median wages.
Affo~'dable Housing Needs Grow
Despite this long economic expan-
sion, the number of severely cost-
burdened renters remains stub-
bornly high. In 1995, almost 3.9
million unsubsidized households
with extremely low incomes spent
more than half their incomes on
housing. Although changes to fed-
eral data sources make more current
estimates impossible, this number-
has likely grown in the past four
years because incomes have not
kept pace with rents.
While the jury is still out on the
success of welfare reform, its
impact on housing needs is becom-
ing clearer. If recent experience is
any guide, the wages ex-recipients
earn -- at least initially -- are
inadequate to cover the costs of a
modest two-bedroom rental with-
out exceeding the 30-percent-of-
income standard. At today's rent
levels in eight states, at least two
people in each household would
have to work full time earning
$7.00 an hour to comfortably
afford this tTpe of housing (Fig. 3).
On the supply side, 337,000
unsubsidized units affordable to
extremel}, iow-income renters were
lost between 1991 and 1995. The
number of units receiving direct
federal subsidies has also dropped
by 65,000 in the past four years
alone. Meanwhile, federal pro-
grams have replaced long-term
subsidy contracts with annual
extensions, leaving a growing
share of landlords free to opt out
at almost any time.
Contracts on another million units
will expire within five years, many
of which are located in areas with
rising market rents. Tens of thou-
sands of very Iow-income renters --
many of them elderly- may face
stiff rent hikes or be forced to leave
in search of more affordable units
that accept "portable" subsidies.
Expanding Housing Opportunities
Over the next decade, the pace of
household growth should match or
slightly exceed the 1.1-1.2 million
annual rate averaged in the 1990s.
Including manufactured homes,
the number of housing units added
~Lould thus be on par with the 16
million or so built in this decade.
As the baby boomers reach their
40s, 50% and early 60s, they will
continue to drive both homeowner-
ship rates and home values to new
heights. They will also spend more
on remodeling their older and more
valuable properties, further stimu-
lating housing investment. Those
boomers who remain or become
The Working Poor Are Struggling to Afford
Even Modest Rentals
Number of Full-Time Jobs Needed to
Rent a Typical Two-Bedroom Apartment
r~;~ 1.2 to 1.4 Jobs 1.5 to 1.7 Jobs ~::.i::.: 1.8 to 1.9 Jobs ~ 2.0 to 2.9 Jobs
Notes: Assu~s 1998 Fair Market Rents, take-hc~e wages of $7 per b~ur, a
40-hour ~ork ~x~ek., and a rent burden of no wore than 30% of incc~-~.e, b'.~vde!ed
on the National lo.'-Ivromm Housing Coalition wnthodolcx3y.
Source: Joint Center analysis using HUD Fair M~rket Rents,
renters will delnand more expensive
and amenity-rich apartments.
Meanwhile, the "echo boomers"
will be gradually entering the hous-
ing market, fueling demand for
rentals and starter homes. 'Ihe chil-
dfc fi of the baby boomers differ
from their parents in important
ways that affect their housing pref-
erences. In particular, more echo
bomners are immigrants or second-
generation Americans. More will
have college degrees, more of the
women will work, and more
delay marriage and childbearing.
At the same time, most of the par-
ents of the baby boomers are now
past 70 and an unprecedented share
is expected to live well past the age
of 80. Demand for structural modi-
fications that allow the elderly to
function safely Within their lion]es
will therefore increase. As.these
seniors grow more infirm, though,
independent living will become
more difficult and alternative
arrangements combining healthcare
with housing will gain popularity.
The overall aging of the popula-
tion thus favors rising homeowner-
ship rates, strong home building
and remodeling activit}; and
record home sales well into the
next decade. Unfortunately, the
,enduring strength of housing mar-
kets may add to the affordability
problems of poor households with
weak income growth. Indeed, with
housing costs on the rise, expand-
ing the supply of low-cost units
and preserving the subsidized stock
will be especially important hous-
ing challenges.
Housing Markets
Housing markets turned in another
stellar performance in 1998, set-
ting new records for home sales as
,,,,'ell as for the value of residential
construction (Fig. 4). Single-family
production stood at levels not
seen since the 1970s, and multi-
family construction achieved a
fifth straight year of growth.
Condominium sales also heated
up to a record 655,000 unit
seasonally adjusted annual rate
in the first quarter of 1999.
Housing has drawn its strength
from the lowest effective mortgage
interest rates in 30 years. In addi-
tion, 1998 marked the third con-
secutive }'ear of tame inflation, -
low unemployn~ent, and nearly
four percent economic growth.
Housing Production Surges
Housing starts jumped nearly 10
percent to 1.6 million units last
year, and were up strongly in the
first quarter of 1999 over the first
quarter of 1998. Housing permits
reached 1990s peaks in 32 states
and eclipsed their previous cyclical
peaks in 17 (F/g. 5).
California, Florida, Georgia, North
Carolina, and Arizona -- which
together account for nearly a third
of total 1998 production -- all
posted their best },ear since 1991.
Indeed, it was the best year ever
for Georgia and North Carolina. In
many of these states, permits were
double or triple their recession
lows. Even ~narkets with relatively
Home Production and Sales Reached All-Time
Highs in 1998
I I I I I I I I I
1975 1980 1985 1990
~ Value of New Residential Construction (Right Scale)
;-: Existing Home Sales (Left Stole) New Home Sales (Left Scale)
Source: Table A-1.
1995
I
300
250
200 _m.
_
150 ~
100 ~"
0
1998
low housing production were at
1990s peaks, including several
states in the Midwest and Northeast.
No state displayed major signs of
hous. ing market wea 'kness relative
to 1997. In the 10 states where
permits declined last year, the
losses were only modest. Of this
group, Arkansas, Nebraska,
Oregon, and West Virginia issued
more permits in 1998 than in peak
},ears of the I980s. Still, produc-
tion in many states -- including
Alaska, California, and t'Iawaii --
remains well below 1980s levels.
Single-family production registered
its best },ear since 1978, exceeding
1980s peaks in 29 states. Multi-
family housing increased its share
of total production from a iow of
11 percent in 1993 to 18 percent in
1998. Although its share fell from
about 19 percent in 1995 to 17
percent last },ear, manufactured
housing production continued to
grow. Indeed, manufactured hous-
ing accounted for more than a
third of 1997 home production in
10 states.
Housing Outpaces the Economy
The 9.4 percent surge in combined
spending on home building and
remodeling provided a substantial
lift to the national economy in
1998. Strong home sales, mortgage
refinance activity, and home equi-
ty lending also helped to fuel
Housing Production Has Topped 1980s Peaks in
One Out of Every Three States
1998 Permits as Share of 1980s Peak
~.:._~t.{ 0%to50% 51%to100% 101%to125% ~ 126%to186%
Source: Connus ~zreau Series C-40.
up cash through lower mortgage
payments. A 1998 Freddie Mac
survey indicates that about half of
the six million homeowners who
refinanced last year took out new
mortgage loans that were at least
five percent larger than the ones
they retired. By comparison, only
about a third of borrowers drew
on their home equity to such an
extent during the record refinanc-
ing boom of 1993. What is more,
the median amount of cash taken
out in 1998 equaled 11 percent of
the home value, up from 6 percent
in 1993.
growth. Including lender and bro-
ker fees, transfer and title taxes,
and fixed costs, home sales directly
contributed $60-70 billion to the
economy and generated about
$12-14 billion in state and local
tax revenues. Indeed, sales-related
revenue grew more than four times
faster than the economy in general
and helped to offset weakness in
other sectors.
Strong home sales also stimulate
remodeling activity. According to
Joint Center estimates, buyers of
existing homes spend roughly
$1,900 more, and buyers of new
homes about $1,300 more, on
improvements within the first year
of purchase than owners who do
not move. Growth in home sales
thus generated about $2.2 billion
in additional home improvement
spending in 1998 over 1997.
At the same time, hear3, refinanc-
ing activity pumped money into
the econmny, both by allowing
homeowners to borrow against
their home equity and by freeing
Borrowing against home equity in
the form of second tnortgages and
lines of credit has also surged in
the past five years (Fig. 6). Even
after adjusting for inflation, home
Growth of Home Equity Borrowing Has Pumped
Cash Into the Economy
Home Equity Loans Outstandin~
450
350 ~
300
~50
200
150
100 -- .
0
1993
1994 1995 1996
1997
Source: Federal Reserve Bulletin, "Recent D~velop~nts in Home Equity Lending,"
April 1998, p. 248.
equity lending of this type rose
some 45 percent between 1993 and
1997 -- more than 10 times faster
than the 3.9 percent rise in home
prices. Not all of this $130 billion
became available for spendin§,
however, since more than half of
these borrowers used some portion
of their equity loans to pay off
higher interest-rate debt. Never-
theless, second mortgages helped
even these homeowners spend
more on goods and services by
reducing their debt payments.
For all these reasons, housing has
made important contributions to
this unprecedented economic
expansion. Whether this support
can continue will
depend primarily on
the strength of job
growth and the direc-
tion of mortgage
interest rates. While
exceeding expecta-
tions throughout this business
cycle, the vigor of housing produc-
tion, home sales, and refinancing
activity will be difficult to sustain.
Decentralization Continues
Home building has set a spectacu-
lar pace, exceeding 10,000 units
in 240 counties across the country
from 1990 to 1997. Since the
beginning of the decade, 21 met-
Many Areas Across the Country Have Experienced
Intense Home Buildin~ Activity
Counties Adding at Least 10,000 Homes, 1990-1997
Notes: A_~n. uai place-level per.it ciata aggregated to cou~ties. Does not include
,?ma~.ufactul'c~d housLng. Tb~ e_~:tent of gr~.'th in the Southwest a~4>ea/-s s~r~what
exaggerated because the c~.hnties in that regicn are p~azTicu!ariy large.
So'arce: Cen.~zas Bureau Series C-40.
Since the
beginning of the
decade, 21
metropolitan
areas have
issued more than
100,000 permits.
ropolitan areas have
issued more than
100,000 permits (Table
A-4). Topping the list
are Washington, DC
with more than
330,000 permits, Los
Angeles with nearly 310,000,
Atlanta with 303,000, and Chicago
with 276,000.
When mapped, the extent of
development around many of
the nation's large metropolitan
areas becomes apparent (Fi~,. 7.).
Southern California, the San
Francisco Bay area, southern
Florida, southern Arizona, the
Boston-Washington corridor in
general (and Seattle, Portland,
Las Vegas, Denver, Chicago, and
Atlanta in particular) have all
experienced heavy building activi-
ty outside traditional city centers.
But so too have smaller metropoli-
tan areas such as Mobile, AL,
Boise, ID, and Greenville, SC.
I)evelopment is pushing to the
boundaries of metropolitan areas
and spilling over into nonmetro-
politan areas. One indicator of this
growth is the number of housing
permits per thousand people,
which conveys the intensity of
new construction relative to the
population already residing in a
particular county. By this measure,
medium-density counties are
undergoing the most intense
development, averaging 54 permits
per thousand people in the South,
52 in the Midwest, $1 in the West,
and 29 in the Northeast. In fact,
even the low-density counties in
the West registered a rate of 46 per-
mits per thousand people.
Nationwide, 14 counties that
issued 10,000 or more permits dur-
ing the 1990s also averaged more
than 150 permits per thousand
people. Assuming an average of
three persons per household, this
level of activity means that almost
half as many permits were issued
as there were households. More-
over, four of these counties (Clark
County in Nevada, Collin Count),
in Texas, Collier Count), in Florida,
and Douglas Count), in Colorado)
issued 30,000 or more permits
between 1990 and 1997.
lvleanwhile, more Americans in the
1990s than in the 1980s have been
bypassing metropol-
itan areas altogether
in choosing where
to live. For the first
t:,'~.e since the
1970s, the pace of
growth of the non-
metro population is
approaching that of
the metro popula-
tion. In addition, 60
percent of the 1.6
For the first
time since the
1970s, popula-
tion 9rowth in
nonmetropolitan
areas is
approach~r~
9rowth in metro-
politan areas.
million nonmetropolitan housing
permits issued since 1990 have
been in counties adjacent to met-
ropolitan areas.
Population Trends
Domestic and foreign immigration
patterns continue to strongly favor
the South and West. Indeed, the
share of the population living in
the West has now surpassed that in
the Northeast. In addition, the
South's share of the US population
is at its highest level since before
the Civil War. As a result, major
metropolitan areas in the South
and West have experienced the
fastest growth during the 1990%
with development pressures
extending into the surrounding
nonmetropolitan areas.
1AqHle the suburt3s continue to
grab population share from central
cities in all four regions, there are
hopeful signs that the exodus from
some of the nation's largest cities is
reversing. Both Boston and New
York posted modest population
gains from 1994 to
1996. These cities, how-
ever, would have contin-
ued to lose population
to domestic outmigra-
tion if not for the arrival
of foreign immigrants.
Indeed, many cities con-
tinued to lose population
through the mid-1990s,
including Baltimore,
Buffalo, Chicago, Cincinnati, Cleve-
land, Milwaukee, New Orleans,
Philadelphia, Pittsburgh, Rochester,
St. Louis, and Washington, DC
(Fig. 8). In nearly all cases, the losses
continued even as their metropoli-
tan areas gained population. With
domestic migrants primarily head-
ed to the South and West, it will be
difficult for these cities to attract
o
residents back to their centers.
In contrast, dozens of large cities
in the South and West have man-
aged to parlay regional economic
growth into city population grovd2h
(Table A-5). Even so, San Antonio is
the only one of the 39 largest met-
ropolitan areas where population
growth.in the city exceeded that in
the suburbs between 1990 and
1996. San Antonio is an exception
because its central city spans 333
square miles and contains 75 per-
cent of the metro area popula{ion.
Many of the other fast-growing
cities -- such as Charlotte, Orlando,
and Phoenix -- also include large
tracts of undeveloped land within
their boundaries.
V~q~ile up overall since the 1980s,
population growth in nonmetro-
politan areas is uneven. PopuIation
continued to decline in just over a
quarter of the more than 2,200
nonmetro counties from 1990 to
1997, with ongoing losses concen-
trated in Appalachia, the Great
Plains, and the Mississippi delta
region. But these declines were
more than offset by gains in loca-
tions adjacent to metropolitan
areas, and also in retirement desti-
nations and communities that.
Population Growth in Large Cities Lags Gains in
Surrounding Areas
Annual Average Percent Change in Populaticn, 1990-1996
New York
Boston
Buffalo
Cleveland/Akron
Detroit
Hartford
Philadelphia
Pittsburgh
Providence
Rochester, NY
St. I.ouis
San Antonio
Charlotte
Dallas
Denver/Aurora
Houston
Phoenix/Mesa
Portland
Salt Lake City
Columbus
Kansas City
Los Angeles
Miami
Norfolk
San Diego
San Francisco
Seattle
Tampa/St. Petersburg
Atlanta
Indianapolis
Orlando
Sacramento
Baltimore
Chicago
Cincinnati
Milwaukee
New Orleans
Washington, DC
Minneapolis/St. Paul
Less titan i% i% to 1.99% 2% ~
Surrounding Area Growth
N~tes: garge cities defined as the primary m~..ed city off the NSA/.~_.ISA plus any ether
city in Ehc ~tro area with a population greater than 200,000 in 1990. Surrounding
area defined as the remainder of the me~ro area. New York includes Newark and Jersey
City. Los Angeles includes I~ng Reach, ~maheim, Santa Asa and R~verside. San Francisco
includes San Jo~e a~':d Oakland. Dallas includes Ft. ~';czth and Arlington.
Source: Table A- 5.
specialize in services and manufac-
turing. In fact, population growth
in nonmetro retirement communi-
ties was up a remarkable 19 per-
cent between 1990 and 1997.
Housing Market Prospects
Over the next decade, residential
construction will probably proceed
at a rate similar to the 1.6 million
unit annual pace averaged so far in
the 1990s. With the leading edge
of the baby-boom generation well
into their peak earning years and
the trailing edge fast approaching,
strong demand for larger, well-
appointed new homes will keep
construction values climbing. The
addition of 16 million homes over
the next decade and the
aging of the overall hous-
ing stock will also serve
to boost spending on
home improvements,
repairs, and alterations.
Unless the baby boomers
and their children reverse
what is now a century-
long trend toward decen-
tralized development,
home building activity
will remain concentrated
at the metropolitan
fringe and beyond. And
although some urban
areas could see turn-
arounds, the share of the
LIS population living in
central cities is likely to
continue ~o decline unless
key issues such as school
quality and public safety
are addressed.
While the South and
West will continue to
draw population on
net from the Northeast
and the Midwest, most of the
growth is expected to occur in just
a few states -- including Arizona,
Colorado, Florida, Georgia, Oregon,
North Carolina, Texas, and Wash-
ington. Growth patterns could,.
however, change if quality-of-life
and environmental concerns lead
to constraints on land supply
and make housing in these areas
less affordable.
Demographic Drivers of Demand
Growth in the number of households
is the single largest source of resi-
dential construction demand,
accounting for over 70 percent of
home building activity during the
1990s. The rest of demand comes
from the replacement of housing
lost to abandonment or disaster,
expansion of the stock of second
homes, and the increase in the
number of vacant units needed to
accommodate the turnover gener-
ated by movers.
will come from the movement
of the population into ages with
higher household headship rates
(the share of individuals heading
independent households). The
remaining 10 percent of the
growth will result from the over-
all rise in headship rates caused
by relatively high divorce rates,
declining marriage rates, and iow
remarriage rates.
The Echo Boomers
Over tile next decade, the number
of US households should continue
to increase by an average of 1.1-1.2
million annually, adding to the
roughly 104 million that exist
today. While immigration will
contribute about a quarter of this
growth, 65 percent of the increase
The 84 million native-born chil-
dren of the baby boomers make up
the lion's share of the so-called
"echo-boom" generatio, n bom
since 1977. Another five million
foreign-born individuals living in
the US are also echo boomers, and
immigration will continue to fuel
The Echo Boomers Are Rev',~,rsin9 Recent
Declines in the N~,mber of Youn9 Households
1,500 --
1,00-~
500 --
0
-500
-1.12}00 __
2 4,5oo
-2,0~0
1990-1995
Age 18 to 24
1995-2000
I~ Age 25 to 34
2000-2005 2005-2010
Source: Table A-2.
growth of this population group
over the next 10 years.
The echo boomers are already
beginning to reverse the recent
decline in the young-adult popula-
·
tion, adding an average of about
20,000 each year to the ranks of
households headed by 18 to 24
year-olds (Fig. 9). The number of
households headed by 25 to 34
year-olds will also show substantial
increases after 2005. By 2010, the
echo boomers will account for
more than one in ten owner and
four in ten renter households.
Today as the first echo boomers
enter the housing market, they
face economic conditions that are
remarkably similar to those their
parents encountered when they
started to form households in the
mid- to late-1960s -- strong CDP
growth, accompanied by low infla-
tion and low unemployment. But
while market conditions are com-
parable, the echo boomers them-
selves differ in notable ways that
affect their housing choices.
Compared with the postwar baby
boomers who reached young adult-
hood around 1968, the leading
edge of the echo boom is more
racially and ethnically diverse. The
first wave of echo boomers is also
more educated than their parents
were at the same ages, although
they earn slightly less. In addition,
more women in this age group are
10
10
Leading-Edge Echo Boomers Are More Diverse
and Slower to Marry
Percent in Each Category at Ages 18 to 22
Population
Minority
Foreign-Born
Second-Generation
Never Married
Women in Labor Force
Baby Boom Echo Boom
16.8 34.0
3.4 10.1
9.8 11.7
67,0 88.4
52.3 66.1
I]ouseholds
Single-Person 13,7 23.1
Married-Couple 69.O 21.4
Any Household with Children 43,S 32.4
Homeownership Rate 16.2 15.2
Single-Person 8,5 1] .4
Sources: Echo-boom race and i~mi~rant characteristics are for people aged 18-22
from the 1998 Current Pcpu!ation Survey. Baby-boom race and immigrant characteris-
tics are for people aged 20-24 from the 1970 Census PU~S files. Household charac-
teristics are for households with heads aged 18-22 from the 1968 and 1998 Current
Population Surveys.
in the labor force today titan in
1968 (Fig. i0). And most important
for housing demand, larger shares
of leading-edge echo boomers live
alone. Even so, the first echo
boomers have only slightly lower
homeownership rates overall than
their parents did, in part because
relatively more single echo
boomers are buying homes.
Whether the next wave of echo
boomers will have as much home-
buying success remains to be seen.
Slightly lower earnings relative to
their parents, combined with rising
home prices, will make buying more
difficult if interest rates climb.
Nevertheless, it is noteworthy that
echo boomers who mart3, are far
more likely to be tn dual-earner
households than married baby
boomers at the same ages. On aver-
age, thc echo boomers also have
fewer siblings and wealthier par-
ent's than the previous generation,
and may therefore receive more
family help in making a downpay-
merit on a home.
The echo boomers
will have the biggest
impact on housing
markets in the South
and West. They
already make up a
larger share of the
The echo bocm~rs
~.,i 11 have the
biggest impact
on housing
markets in the
South and West.
population in these regions than
elsewhere, and continued migra-
tion will only add to their concen-
tration. Although heralded by some
as a boon to central cities, the
movement of the echo boomers
into their 20s may not bolster city
population growth as much as pre-
dicted. The fact is that only indi-
viduals in their late teens have a
net migration pattern favoring
urban areas, possibly because of the
attractions of city-based colleges
and 'universities. By ages 20 to 24,
young adults are akeady moving to
the suburbs.
Senior Households
At the same time that the children
of the baby boomers are growing to
young adulthood, their parents are
reaching their 70s and 80s. With
life expectancies rising, the fastest
growing segment of the elderly
population will be age 85 and
older. Currently, over 70 percent
of this age group are women, most
of whom are widows 1Mng alone.
Despite infirmities that increase
with age, the overwhelming majori-
ty of seniors want to -- and do --
remain in their homes.
Of those households
with members aged 70
and over living outside
institutions, only 3 per-
cent reside in assisted or
congregate facilities that
provide health, domestic,
or personal-care services. Of the
remaining 97 percent, about 42 per-
cent live alone, 34 percent with
spouses, and 24 percent with others.
Senior living arrangements take a
varieD, of forms. In 10 percent of
11
households with an elderly mem-
ber, the senior has moved in with
a caregiver or a caregiver has moved Age
70 to 79
in with him or her. Another 20
percent are supported by friends or
family who already live in the
Age
home or visit to provide help. Only s0 to s9
about 7 percent get assistance from
outside organizations or unrelated
individuals. Regardless of the set- Age
90 ~r Older
ting, though, the proportion
receiving care increases with the
age of the senior (Fig. 11).
Although 5.0 million households
now include a senior citizen with
disabilities, just 2.1 million express
the need for structural modifica-
tions to their homes to function
safely and comfortably. And only
about half of these households
actually have the modifica-
tions they say they need
(Fig. 12). With the number
of households headed by a
person aged 65 or older
rising by about 300,000
per year over the next
decade, demand for such
Is:ne modifications will
clearly grow.
Handrails and
Grab Bars
Ramp
Bathroom
Modifications
Extra-Wide Doors
or Hallways
Elevator or
Stair Lift
Kitchen
Modifications
Door Handles
Instead of Knobs
Modified Faucets
or Cabinets
Perhaps the biggest impact
that seniors will have on
housing markets, however,
will come when they
depart their homes for
smaller or more appropri-
ate units, move in with
other individuals, or die.
Given that elderly owners
The Share of Households with Seniors Receiving
Care in Various Settings Increases With Age
I
0 10 20 30 40 50 60 70 80 90 100
~ Reside in Assisted Living or Congregate Facility
U,?Z Moved in with Helper/Helper Moved In
Receive Help from Outside Organization or Nonrelative
Receive Help from Other Caregiver
~ Without Help
Note: Age refers to the olde. st ~rber of the household.
Source: Joint Center tabulation~ of the National InstituCe c~n Agir~'s Assets
and H~_alt]l E~.~naw~cs Afrong the Oldest-Old (A~{EAD)_ Survey, 1993-94.
Only Half of Households With Disabled Seniors
Have the Home Modifications They Need
Households E.~pressing Need for Modifications, 1995
80 100
Note: Exclude~ all households with seniors that did not express need for
structural modifications.
Source: Joint Center tab%ulations of the 1995 American Housing Su~vey.
1,309
638
486 ,~
309 ~
305 ~-
207
193
130
11
seldom make discre-
tionary improve-
ments to their
homes, the new own-
ers of these units are
likely to invest in
substantial modifica-
tions or upgrades to
their properties.
With the baby
boomers strug-
gling to care
for their aging
parents, public
attention will
increasingly
focus on the
intersection of
housing and
healthcare.
With increasing
numbers of baby boomers strug-
gling to care for their elderly par-
ents and the leading edge of the
boomers themselves only 12 ),ears
away from retirement, more public
attention will become focused on
the intersection of housing and
healthcare. In the meantime,
efforts under way to reform
Medicare will have a sig-
nificant impact on what
home-based health and
personal-care options
remain viable and
affordable in the future.
Because the elderly pop-
ulation is concentrated
geographically, the
effects of their housing
choices will be felt most strongly
in certain markets. Some states --
particularly in New England, the
Great Plains, and the Mid-Atlantic
region ---have large shares of
seniors simply because young
adults have moved away to other
parts of the count'ry. Others, such
as Florida and Arizona, have siz-
able elderly populations because
they provide popular retirement
destinations. While the states in
the Western and Mountain
regions, along with those in the
Southeast (excluding Florida),
·
have relatively small elderly popu-
lations today, these locations are
expected to show the fastest
growth in senior households over
the next 20 years.
Foreign-Born Households
Now accounting for just over 10
percent of the US population, for-
eign-born households are impor-
tant contributors to housing
_
demand. Although generalizing
across immigrant households --
'13
Immigrant Adults Residing Together Are a Potential Source of
New Households
Percent cf Households Under Age 45 Sharing Quarters
30 --
~0 ---~7:~
WRh Any W~ ~y Aduk ~ ~re~ W~ AduR ~ Adult W~ Other
Adult Reladve Non-Rel~e Sibling Child Adult Relate
~"T:':_ Nafiv~born ~(:~ Head ~om Euro~R~sia ,~::~,..:.~ Head ~om~ia ~ Head ~om ~tin Ameri~
Notes: l~migrant defined as tony foreign-born person. Adult relatives exclude spouse.
Source: Joint Center tabulations of the 1998 Cu~ent Population Survey.
even of the same nationality -- is
risky, their living arrangements do
differ from those of the native-born
population in specific ways that
affect their housing preferences.
For example, even after accounting
for the younger age structure of
the foreign-bom population, a
larger share of immigrants under
the age of 45 head married-couple
households with children. Some
54 percent of Latin American
immigrants head this type of
household, compared with 40 per-
cent of native-born Americans of
all races and ethnicities.
At the same time, the foreign-bGrn
are also more likely to live with
other adults (excluding spouses).
While native-born households more
commonly include an unmarried
partner, immigrant households are
more apt to include parents, adult
siblings, or other adult relatives
(Fig. 13).
l lousehold composition varies not
c;n:y between the foreign- and
native-born, but also among immi-
grants frmn different regions. For
instance, Asian and I.atin American
immigrants are much more likely
to have adult siblings and adult
cousins, aunts or uncles living in
their households than European or
Russian immigrants. Asians are more
likely than any other group to
have a parent living with them
and least likely to be single parents.
These cultural patterns have impli-
cations for future housing demand
as well as for current consumption.
Foreign-born adults who currently
share a single unit are a potential
wellspring of new households.
Over time, the household headship
rates of immigrants converge with
those of the native-bom popula-
tion. For example, immigrants aged
20 to 29 in 1980 were 83 percent
as likely as native-bom individuals
to head their own households.
By 1990, though, these same
immigrants (then aged 30 to 39)
were 92 percent as likely to head
households.
Second-Generation Americans
Over half of the country's 28.3 mil-
lion second-generation Americans
(native-born children
of immigrants) are
under the age of 30.
Although represent-
ing only a small share
of today's households,
these younger second-
generation Americans
make up nearly a
sixth of the echo-
boom population. As
such, they ,,viii have a growing
influence on housing demand over
the next decade.
Many second-generation
Americans have already taken
advantage of economic mobility
in the United States to become
homeowners. Indeed, homeowner-
ship rates among second-generation
households under age 30 far exceed
those of same-aged immigrants.
Moreover, their ownership rates
approach those of other native-bom
Americans even though they are
more concentrated in metropolitan
and Western areas where ownership
rates are relatively low. Their prog-
ress is not wholly surprising given
that the share of younger second-
generation Americans with a bache-
lor's degree or higher approximates
that of same-age native-born
Americans, and their median house-
hold' incomes are also similar.
.,
Like foreign-born households who
have been in the United States for
several years, second-generation
Americans are less likely to live in
M~ny second-
generation
Americans have
already taken
advantage of
economic mobility
in the United
States to become
hon~°wners.
bentral cities than
recent immigrants.
Since they are also
unlikely to live in non-
metropolitan areas,
second-generation
Americans have a sig-
nificantly greater pres-
ence in the suburbs
(in percentage terms)
than even those whose
families have been in this country
for more than two generations.
Geographic Impacts of
Immigration
While media attention has focused
on the growing pluralism of the US
13
14
population, most locations remain
untouched by the sharp influx of
immigrants since the 1980s. The
vast maiority of foreign-born house-
holds and second-generation
Americans live in just 11 "gateway"
metropolitan areas. Indeed, immi-
grants or their native-born children
make up a third of all young house-
holds in these gateways ('Fig. 14).
Outside these metro areas, the
impact of immigration is most
noticeable in a handful of Western
states, hnmigrants and their US-
born children account for about 20
percent of households under age
45 in large Western metro areas, 26
percent in smaller metro areas, and
14 percent in nomnetro areas.
Elsewhere in the country, though,
these shares are a modest 10 per-
cent in metropolitan areas and 5
percent in nonmetropolitan areas.
Household Prospects
While the baby boomers will con-
tinue to dominate housing markets
over the next 10 years, their par-
ents and their children are begin-
ning to exert a growing influence
on demand, tn keeping with the
general shift of the population to
the South and West, the racially
and ethnically diverse echo
boomers will make their presence
felt particularly in these regions.
With the leading edge of the baby-
boom generation still 12 }'ears
14
Gateway Metros
The Impact of Immigration Is Greatest in
Gateway Areas and the West
Percent of Young Households Headed by !~igrants
or Their Children, 1998
W-B S"2
Large Metros
Smaller Metros
Nonmetro
NORTHEAST
Nonmetro :~ ..
MIDWEST
L~rge Metros i~
Smaller Metros~
Nonmetro i~
SOUTH -- ]
Large Metros I
Smaller Metros
Nonmetro ~
0 5 10 15
20 25 30 35
Notes: Gateway n',~tzos i::alude Leu Angeles, New l%rk, S~~. Franzis{~,
O~icago, Wasldngtcn, l~?, H.suston, S.mq Diego, ~oston, Dallas and
Philadelphia. b%~e ~tros have ~ulati~ ~,'er 1 million.
contai~ s~n ~%11 m~tros not identified by the ~_nm:s ~reau. Y~
households defined as ~tder ~e 45.
Source: Joint Center tah~:lations of the !99~3 ~rr~nt Pci~dlation
from retirement age, many have
parents who are now in their late
7Os, 80% and even 9Os. Since most
of these seniors live in convention-
al housing, the demand for hmne
modifications to deal with the
infirmities of aging will increase.
Meanwhile, the baby boomers will
become increasingly involved in
the search for new housing alterna-
tives for the elderly.
Barring a significant change in
immigration policy, the foreign-
born population will continue to
account for a substantial share of
household growth. Although sec-
ond-generation Americans are
more apt to move away from the
gateway areas than their parents,
immigrants and their adult children
will likely remain concentrated in
relatively few areas of the country.
Homeownership Trends
With effective mortgage interest
rates at their lowest levels in three
decades, the national homeowner-
ship rate reached a new high of
66.3 percent in 1998 and has
continued to rise in 1999. Even
though home prices climbed 3.8
percent faster than general price
inflation between 1997 and 1998,
favorable interest rates pushed the
after-tax costs of a typical home
down by 1.7 percent (Fig. 15).
Mounting pressures could, howev-
er, slow the pace of homeowner-
ship growth even if the economy
continues to prosper. House price
inflation has already made it more
difficult for marginal borrowers in
some areas to save enough to buy a
home. And because mortgage inter-
est rates are unlikely to fall much
15
150
~ 12u
~ 9O
~ ~o
further, they will not give much
additional lift to homebuying.
Broad-based Gains
Households of all ages and races
have made impressive homeowner-
ship progress since 1994 (Fig. 16).
After dropping by over three per-
centage points between 1983 and
1992, homeownership rates among
younger households (under age 35)
have recovered lost ground despite
declining shares of married cou-
ples. The homeownership rate
among young unmarried adults
has also jumped 2.2 percentage
points from its previous high of
21.4 percent, placing the baby-bust '
generation (born from 1965 to
1977) on a higher homeownership
trajectory than past generations.
Homeownership Costs Are Holding Near 20-Year
Lows Despite Rising Price~..
1998 Dollars
1,200
400 "'"
1975 1980 1985 1990 1995 1998
Home Price r~-~.7 Monthly After-Tax Housing Payment
Scarce: Table A-7.
200
Meanwhile, women living alone or
heading single-parent households
have increased as a share of home-
buyers from 10 percent in 1985 to
15 percent in 1997.
Homeownership gains are particu-
larly dramatic among low-income
and minority households. Falling
interest rates and specially tailored
mortgage loan programs have
given a significant boost to low-
income homebuying. Between
1993 and 1997, loans to buyers
with incomes less than 80 percent
of the local median increased by
38 percent, con]pared with 25 per-
cent. for higher-income buyers. At
the 'same time, fhe minority'share
of first-time homebuyers climbed
from just 22 percent to 30 percent.
While immigration flows have
helped to lift the minority share
of net additional homeowners
to above 40 percent over the
past four years, they have also
masked the progress of some
native-born minorities in
achieving homeownership. For
example, when foreign-born
Hispanic households enter this
country, they start out with
lower homeownersMp rates
than US-born Hispanic house-
holds and never close the gap.
As a result, while homeowner-
ship rates among Hispanic
immigrants only inched up
from 37 percent in 1994 to 38
percent in 1998, rates among
15
16
P~ACE/ETffNT CITY
Hispanic
Black
V,~ite
AGE
Under 35
35 to44
45 to 54
55 to64
16
65 and
Over
INCOME
Less than
Median Income
Moro than
Median Income
All Groups Have Achieved Homeownership Gains
Percent of Each Group Owning Homes
0 lO 20 30
[~ ~994 E~ ~9~
40 50 60 70 80
grant shares. But even when
compared with whites of
similar characteristics,
minority homeownership
rates still fall short.
S~arces: Cen~ds Bureau Series }{-11! cund Joint Center tabu!atio~ of t,¥.~ 199,1 and
1998 C>drlent Fc~dlation Su~'eys.
the native-born Hispanic popula-
tion jumped from 46 percent to
$1 percent.
Education is Key
that similar progress in closing the
homem~mership gap made during
previous expansions was later
erased when the economy went
into a downturn.
Although minority households are
making advances, their homeown-
ership rates are still less than two-
thirds those of whites (Fix. 17). In
addition, it is important to note
Minorities have lower homeowner-
ship rates in part because they have
lower average incomes and wealth,
different living arrangements and
age distributions, and higher immi-
The importance of educa-
tion to homeownership
progress has increased as
employment growth has
shifted toward professional,
technical, and managerial
iobs on the one hand, and
non-union, Iow-skill service
jobs on the other. As a
result, each successive edu-
cational degree commands
a larger return.
Compared with male full-
time workers aged 25 to 34
without high school diplo-
mas, males with high
school diplomas earn 60
percent more, those with
~0
bachelor's degrees earn 2.3
times more, and those with
graduate degrees earn 3.0
times more. Indeed, the disparity
in earning power between full-time
workers with and without high
school diplomas widened from 47
percent to 60 percent beP, veen
1987 and 1997.
Closing the homeownership gap
will be especially difficult because
far fewer minorities than whites
manage to earn high school or col-
lege degrees. Fully 38 percent of
Hispanics between the ages of 25
17
Minorities Are Making Limited Progress in
Closing Persistent Homeownership Gaps
Minority Rates as Shares of Non-Hispanic White Rate
7O
BLACK ~LISPANIC
-
11 ''I I
°,ll II
o ..: I I _
1994 1995 1996 1997 1998 1994 1995 1996 1997 1998
their bachelor's degrees. Indeed,
young college-educated black
males working full time had medi-
an earnings of only $27,000 in
1997, compared with $36,000 for
their white counterparts. Among
35 to 44 year-olds, median earn-
ings for black male full-time work-
ers with bachelor's degrees were
$35,000 in 1997 -- some $15,000
below those for white male workers.
Lagging Central City Rates
Source: C~nsus BuIeau Series
and 34 lack a high school diploma,
compared with only 12 percent of
blacks and 7 percent of whites.
Similarly, only 8 percent of young
Hispanic adults have a bachelor's
degree, compared with 12 percent
of blacks and 25 percent of whites.
Educational attainment among
Hispanics is so much lower in part
because many Hispanic immigrants
arrive in this country without a
high school diploma.
For minorities in particular, earn-
ing a college degree dramatically
improves the likelihood of becom-
ing a homeowner. Even so, the
homeownership rates of young
married minorities with bachelor's
degrees still lag those of whites
with just a high school diploma
(Fig. 18). This holds for suburban
as well as central city residents.
In large measure, thig disparity.
reflects the much lower returns
that black male workers receive for
Homeownership gains have largely
bypassed the nation's central cities.
According to preliminary results
from the. 1997 American Housing
Survey (using 1980 census defini-
tions of metropolitan areas),
18
A Bachelor's Degree Gives a Major Lift to the
Ownership Prospects of Young Minorities
(~nership Rates (Percent)
9O
CENTRAL CIT~ SUBURB
V~ite Blac~ His ~anic Vfnlte Rlac~ Hispanic
~ Less than High School Diploma [~ High School Diploma Only
~ Bachelor's Degree Only
Notes: Includes orhly ~arried-couple ~useho!ds under age 45. Data was averaged
o~-er 1996, 1997, and 1998 to increase sample size.
Source: Joint Center tabulations of the Current Population Survey.
17
19
18
suburban areas added nearly 3.6
million homeowners and non-
metropolitan areas about 1.6 mil- 400
lion between 1991 and 1997, while 300
central cities added only about __.
520, O00. Over this same period, the ~ 200
suburban homeownership rate rose
from 71 percent to 73 percent and
the nonmetropolitan rate from 73 gt 0
percent to 75 percent. The central
-100
ci~, rate, in contrast, edged up less
-200
than half a percentage point to just
49 percent. -300
In the Northeast, central cities
both lost owner households and
saw a drop in homeownership
rates (Fig. 19). Although central
cities in the West added over
300,000 homeowners, the overall
ownership rate fell in the region
because an even larger number of
renters were added. While Mid-
western cities posted only modest
increases in the number of owners,
homeownership rates were up
sharply because the number of city
renters fell. Meanwhile, homeown-
ership rates in Southern central
cities inched higher with the addi-
tion of about 160,000 owners.
Minority and Low-Income Buyers
Large and growing shares of both
minority and low-income house-
holds are buying homes in the sub-
urbs. Fully 60 percent of minority
buyers and 66 percent of tow-
income buyers within metropolitan
areas purchased suburban homes in
City Homeow~ership Rates Reflect the Shifting
Balance Between Owner and Renter Growth
C~nership Rate Ownership Rate Ownership Rate Ownership Rate
Down 2.9 Points Up 3.6 Points Up 0.6 Point Down 0.1 Point
Northeast Midwest South
Change in Number of Owners ~ Change in Number of Renters
West
Sc,drce: Joint Center tabu!aticp~ of the 1991 ~nd 1997 ;¢a~_rican llc*asir~ Su~;oys.
1997. Two-thirds of loans to minor-
ities in Southern metropolitan
areas were made in the suburbs; in
Miami, Atlanta, and Washington,
DC, the share exceeded 75 percent
(Table A-6). Meanwhile, the share of
loans to low-income buyers made in
the suburbs of Atlanta, Cincinnati,
Detroit, Hartford, Miami, New York,
Pittsburgh, St. Louis, and Washing-
ton, DC was also over 75 percent.
In all regions, the share of minori-
ty buyers purchasing
homes in the suburbs
now exceeds the
share of minority
owners living in such
neighborhoods in
1990. Indeed, the
share of minority
suburban homebuy-
ers in the South and
West is now on par with the share
of suburban owners of any race liv-
ing in those regions in 1990.
Similarly, even though low-income
families have traditionally been
underrepresented among suburban
owners, the share of these house-
holds buying in the suburbs in
1997 approached that of owners
of all income groups living there
seven years earlier. In the South,
the share of low-income house-
holds buying in the suburbs actual-
In all regions,
the share of
minority buyers
purchasing homes
in the suburbs
now exceeds the
share of minority
owners living in
such neighbor-
hoods in 1990.
ly exceeded that of all
mxmers residing there
in 1990.
The growing concentra-
tion of low-income and
minority owners in the
suburbs does not neces-
sarily mean, however,
that more of these
households are buying into higher-
income or less-segregated commu-
nities. Many older suburbs have
attributes more often associated
with central cities, such as high
concentrations of poor and rninori-
ty households. Thus, while two-
thirds of low-income buyers pur-
chased homes in suburban areas in
1997, only one-third bought in
neighborhoods where the median
income was at least equal to the
metro area median.
Meanwhile, roughly three-quarters
of higher-incotne buyers (with
incomes at least 20 percent above
area medians) are also choosing to
live outside central cities. Of the
eight largest metropolitan areas
in each region, Atlanta, Buffalo,
Detroit, Pittsburgh, Rochester, and
St. Louis have had the least success
attracting higher-income home-
buyers to their central cities. Less
than 10 percent of upper-income
buyers purchased homes in such
neighborhoods in 1997. The places
that were most successful in attract-
in6 higher-income homeowners are
a mix of amenity-rich cities with
high home prices (such as San
Francisco) and central cities that
include large suburban-like areas
(such as Phoenix and San Antonio).
Cities had an even harder time
drawing upper-income homebuyers
to low-income neighborhoods. In
the 32 metropolitan areas analyzed,
the share of upper-income buyers
purchasing homes in low-income
neighborhoods was consistently
below eight percent.
Escalating House Prices
As measured by the Freddie Mac
Repeat Sales Index and adjusted
for overall inflation, house prices
rose eight percent between 1993
and 1998. Last year alone, house
prices were up by
more than four per-
cent in nearly a quar-
ter of the states.
Itouse price inflation
has been particularly
strong on the West
Coast, topping seven
percent in Seattle, San
Francisco, San Diego,
and Los Angeles. Massachusetts and
New Hampshire have also seen
notable advances, caused in large
part by the more than five-percent
increase in metropolitan Boston
housing prices.
In the Mountain states, though,
home price inflation slowed in
1998 after exceeding the national
average rate for the preceding five
years. Similarly, home price infla-
tion in the Great Lakes region
(with the exception of Michigan)
has also retreated from previously
strong gains. Hawaii is the only
state where house price increases
failed to keep pace with general
price inflation.
With house prices rising faster
than the incomes of the bottom
third of households, it has become
increasingly difficult for these fam-
ilies to save enough to buy a home.
In inflation-adjusted dollars, the
amount of money required to
make a 10 percent downpayment
on a typical home increased from
$11,$60 in 1978, to $12,000 in
1988, to $12,450 in 1998.
The pressure of
risin~
prices has been
offset to so~e
exten~ by ~d-
ed access to
low-downpayment
loans.
Flexible Underwriting
The pressure of rising
home prices has been
offset to some extent by
expanded access to low-
downpayment loans:
According to a Federal
Housing Finance Board
survey, the share of
loans with downpayments of five
percent or less (excluding those
that are government-insured) in-
creased from one percent in 1985,
to three percent in 1990, to seven
percent in 1998. Some lenders are
even experimenting with no-down-
payment loans. Lenders have also
relaxed other standards, such as
debt-to-income ratios, cash reserve
requirements, and documentation
of credit history.
Research conducted by Freddie
Mac and other industry partners
reveals, however, that delinquen-
cies and defaults mount when sev-
eral underwriting standards are
eased simultaneously. Even in the
2O
2O
absence of multiple risk factors,
low-downpayment loans pose legiti-
mate concerns for lenders because
None
they are known to trigger greater ~
losses than loans with a larger equi- 8 One
ty cushion. In fact, if forced to sell ~
immediately, borrowers with five- ~ Two
percent downpayment loans would *a
~ Three
not have enough equity to cover ,~
average selling costs.
.~ ~our
With weaker performance of
affordable loans even in the midst
of a booming economy, liberal
underwriting practices have raised
concerns over what might happen
when prices turn down or unem-
ployment rises. I louse price
declines sizable enough to wipe
out home equity of five percent,
however, are relatively rare events
at the metropolitan level. Over the
period 1975 to 1998, P, vo-thirds of
the nation's 39 largest metropoli-
tan areas experienced no three-year
intervals when nominal prices fell
five percent or more (f'iS. 20).
Even in the other 14 metropolitan
a;~ as, the risk of buying during
such a period of sustained price
declines was relatively low: 10 per-
cent or less in eight metropolitan
areas and under 20 percent in
another five. The only metropolitan
area where the risk exceeded 20
percent was Hartford, CT. Still,
when combined with job losses,
even modest price declines can eas-
ily force homeowners without cash
reserves and with little equity to
Five
Most of the 39 Largest Metros Have Avoided
Major Sustained Eouse Price Declines
Nu~er of Metropolitan ~eas
I I I I
5 10 15 20 25
Note: b~jor sustained house pzice ,&eei£ne defined as a ncr~.inai house price drop
of five percent or more ever a three-y~ar period, measured bet~en 1975 and 1998,
Source: Table A-3.
become delinquent and ultimately
default on their loans.
I,ow-downpayment loans are also
no panacea for affordability. While
easing wealth constraints, low-
downpayment loans actually wors-
en income constraints by adding
to the size of loans. In addition,
they' require payment of mortgage
insurance, which adds half of a
percentage point or more to inter-
est rates. As a result, below-market
interest rate programs (such as
mortgage revenue bonds) that can
be used in tandem with low-down-
payment loans are vital to the
future growth of homeownership.
Homeownership Prospects
The aging of the US population
favors increases in the national
homeownership rate in the decade
ahead. Minorities will, however,
have a difficult time catching up
with rates achieved by whites
because of their lower levels of
education, income, and wealth,
and because their younger age
structure and family characteristics
are less conducive to homeowner-
ship. Indeed, the gap between
minority and white ownership
rates has barely narrowed even in
the best of times.
Nevertheless, minorities should
make up a growing share of home-
owners. Not only do minorities
represent an increasing share of .all
households and therefore of poten-
tial owners, but they will also be
reaching their peak homebuying
years during the next decade.
Rental Housing
Even if homeownership rates by age
and household type continue to
rise at the pace set over the 1990%
about 30 percent of US households
will still rent their homes in 2010.
Some families rent simply because
they cannot afford to buy. For oth-
ers, though, renting is an attractive
alternative to owning. In fact,
many households of all income
levels -- particularly those who are
changing job locations, are in the
process of divorce, or are in some
other life transition -- prefer the
flexibility that renting allows.
Rent Increases
the pace in the Northeast and West
in 1997. Nevertheless, inflation-
adjusted contract rents in all four
regions remain below their previ-
ous peaks (Fig. 2I). Rent increases
are now outpacing inflation in all
23 metropolitan areas (within the
contiguous US) tracked by the
Consumer Price Index. Real gains,
however, are modest in most
places, with rent levels reaching
record highs in just 5 of the 23
areas: Portland (up 12 percent
since 1990), Chicago (up 6 per-
cent), San Francisco (up 6 percent),
Seattle (up 6 percent), and New
York (up 2 percent).
Rents in the South and Midwest
started to rise faster than overall
inflation in 1994, arid picked up
Though meager overall, rent
increases have nonetheless out-
stripped even smaller renter
21
600
Although Rents Are Rising, They Still
Remain Below 1980s Peaks
550 ........................................
50~ --
450 --
400 ~ .-
300
I I I I ! I I I I I I I I I I I I
1980 1985 1990 1995 1998
:, ,~. Northeast ~ Midwest ~:=::: South ~?._~ West
Notes: b:edian rents fr~ the A}L~ were adjusted by the BLS Residential Rent
Price Index. Data before 1987 w~re adjusted separately for depreciation.
Sources: Joint Center tabulations of th~ 1977 American Housing Survey; Bureau
of Labor Statistics' R~sidantia! Rent Price Ir~lex.
income gains over the past two
years. The median income of renter
households rose just 0.3 percent
between 1996 and 1998 while rents
climbed by 1.6 percent. For renters
earning the median income and
living in typical units, then, hous-
ing has become less affordable.
Nationally, renter households
devoted 27.7 percent of their
incomes to housing last year, up
slightly from 27.4 percent in 1996.
Even consistently declining real
rents between 1987 and 1996
failed to reverse the rapid run-up
in cost burdens that occurred in
the early and mid-1980s. Because.
of sluggish income growth, renters
thus pay more for their housing
today than they did for compara-
ble units in the 1970s (Table A-7).
Demand Shifts
Rising homeownership rates,
together with the passage of the
baby boomers into their late 30s
through early 50% have held
growth in the number of renter
households to only 2.0 percent
since the economic expansion
began in 1991.
Nevertheless, rental demand has
been relatively strong in the West,
with the number of renter house-
holds up 7 percent over this period.
The region's recovering economy,
relatively young population, and
steady influx of the foreign-born
22
In the 1990s,
have all contributed to the growth
in renters. Meanwhile, record-high
rents in some of the major metro
areas in the Midwest, together
with especially affordable home-
buying markets, have Pushed the
while the minority
share jumped from
33 percent to a
record 38 percent.
In the late 1980%
the number of
both lo~_r~ and
higt~r-inco~e
renters has
increased while
that of middle-
income renters
of a million renters
added between 1991
and 1997 had incomes
that are 20 percent or
more above regional
medians. In 1995 (the
renter population in that region households in all
has deeli_ned, last year for which local
down four percent.
income groups
income comparisons are
joined the ran'ks of
possible), more than six
Growth in the number of renter renters. In the 1990s, however, the million renter households earned
households has been strongest in number of both lower- and higher- incomes that exceeded the local
locations where immigration is income renters has increased while area median by at least 20 percent.
most concentrated. Despite their that of middle-income renters has In fact, nearly 3.5 million of these
homeownership gains, immigrants declined (Fig. 22).
renter households had incomes
and minorities make up a growing
that topped area medians by 50
share of renters. Between 1990 and
1998, the foreign-born share of
Although households in the lowest- percent or more.
income brackets are responsible for
renter household heads increased most of the absolute growth in tt4e These highest-income renters tend
from 13 percent to 16 percent,
number of renters, about a quarter to be younger singles and those
who are ending marriages or are
divorced. While only 21 percent of
22
Very Low-Income Households Account for Most
of the Growth in Renters
high-earning households under age
45 are renters, 33 percent of the
divorced, 43 percent of the recent-
1,400
1,200
- 17), separated, and 49 percent of the
never married in this age group
1,000
I:::
800
40o
200
rent their housing. Among upper-
income households over age 45,
rentership rates are 23 percent for
the never married and 21 percent
for the divorced.
Like the rest of the renter popula-
tion, upper-income renters are
Very Low Low Moderate Moderate-High High
Income Income Income Income Income
1985 to 1991 ~ 1991 to 1997
Notes: Very 1(~*' irz~,~e~ defined as less thnn 50% of r~ionai ~i~ ~c~s; i~ is
~tween 50% ~d 80%; ms. rate is ~tvc~n 80% ~n~ 100%; ~o~ate-high is ~t,~en
100% ~d 120%; hi~ is ~ 120%.
So.ce: Jolt Center t~!atiop~ of ~e 1986, 1992, ~d 1998 ~nt Pc~alation
Su~'eys.
highly mobile. Half of these house-
holds report having lived in their
homes for one year or less. By
comparison, half of all homeown-
ers with comparable incomes have
remained in their homes for seven
years or more.
For highly mobile households,
renting can make more financial
sense than owning. In general,
the advantages of owning --
including the ability to lock into
payments based on current house
prices, build equity by paying
down the loan, and gain from the
long-term rise in house prices --
increase with the length of occu-
pancy. Nonetheless, surprisingly
large shares of homeowners move
within just a few years of buying.
23
450
400
350
~oo
250
200
150
100
50
Multifamily Construction Eas ~eated Up
Particularly in the South
I I I
1995
I I I I I II I I II I I I
1980 1985 1990
:-. Northeast l~ Midwest ~:~?~ S o u [ [;I~ West
1998
Analysis of the American l{ousing
Survey indicates that 20 percent
of owners who purchased homes
in 1985 (when home prices were
generally on thc rise) moved w~h-
in three years, 35 percent moved
within five years, and over 70 per-
cent moved within ten years. Even
among those who bought in 1989
(when prices were generally weak-
ening and homeowners had
a disincentive to sell), 16 percent
moved within three years and 28
percent moved within five. For
these homeowners, renting may
wt i1 have been a more sound
financial choice.
Rental Housing Characteristics
Contrary to popular notions, fully
one-third of the nation's 34 million
rental units are single-family homes,
and only about one-sixth are locat-
ed in n~ultifamily structures with 20
or more units. In addition, about
two-thirds of private rental proper-
Source: Co_nsu~ F~reau Series C-,IO.
ty Owners are individuals or mar-
fled couples -- tnost of whmn Own
less than five units.
Moreover, a large and growing
share of the natiop's rental hous-
ing stock is now located outside
central cities. In 1997, 54 percent
of rental units were in suburban or
nonmetropolitan areas. Indeed, 68
percent of the new rental housing
construction that took place
between 1994 and
1997 occurred out-
side central city
boundaries.
Mirroring population
growth, the South
has been adding
rental housing at the
fastest clip (Fig. 23).
Production of mul~-
family units in both
the West and the Northeast has
increased modestly in the past two
years, while activity in the
Midwest has declined slightly.
Even though multifamily produc-
tion has rebounded somewhat
from its recession lows, construc-
tion of affordable units has not
kept pace with demand. In fact,
the number of low-cost units
produced under the Low Income
Contrary to
popular percep-
tions, one-third
of the nation' s
34 million rental
units are single-
family hcmes,
and only about
one-sixth are
located in large
multifamily
structures.
Tax Credit program has
actually dropped
because the program
has not received an
inflation adjustment
since 1986.
Because of the lack of
incentives to build at
the low end of the mar-
ket and the strengthen-
ing of demand at the
23
24
24
The Baby Boomers and the Echo Boomers Will
Bolster the Ranks of Renter~
Change in Renters by Age Group, 2000-2010
8OO
20-24
600 25-29
200
~5-~9
o
-600 __
-800
-1,000
35-39
55-59
50-54 6064
4549~ ~
70-74 75+
Source: Joint Center projections.
high end, rental housing produc-
Lion has shifted toward more
as the echo boomers begin to forTM
independent households. Conse-
expensive units. Between 1990
and 1997, the median
quently, more new renter house-
holds will be added to
size of new multi-
family housing units
increased by nearly
100 square feet and
the share with two
bedrooms rose from
65 percent to 71 per-
cent. At the same
time, the median ask-
i~ rents in apart-
ment buildings with
five or more units,
Because of the
lack of incen-
tives to build at
the low end and
stren~
demand at the
high end, multi-
family production
has shifted
toward more
expensive units.
the 20 to 30 year-old
age range than in the
past 10 years (Fig. 24).
Minorities, immigrants,
and second-generation
Americans will continue
to make up growing
shares of these new
renter households.
At the same time, the
number of renters
after adjusting for
inflation, saw a striking 16 percent
between the ages of
30 and 44 will decline with the
increase from $645 in 1994 to
$724 in 1997.
aging of the baby-bust generation.
Although the post,var baby-boom
Rental Housing Prospects
Over the next decade, the number
generation will be in the age
groups when homeownership is
highest, the sheer size of this gen-
eration will mean considerable
of renters should increase sharply growth in the number of renters
age $0 to 64. The fastest-growing
market segments will therefore be
young adults with modest incomes
(many of them minorities) who are
forming households for the first
time, and older, higher-income
households who choose to rent
rather than own for a variety of
lifestyle reasons.
After a decade of tepid growth,
the opportunities are expanding
for rental housing providers who
can fill these niche markets. New
rental housing construction is,
however, likely to focus even more
on the high end of the market,
particularly in suburban locations.
In the absence of additional gov-
ernment subsidies, meeting the
housing demand of low-income
renters through new construction
will remain difficult.
Rising real rents and the shift in
demand at the margin to higher-
income tenants will also restore
incentives for owners to improve
their rental properties. Some
upgrading of lower-cost units to
appeal to more affluent renters is
therefore likely. Like new construc-
tion, the remodeling of rental
units to accommodate low-income
tenants will depend on scarce fed-
eral subsidies.
Low-Income Housing
The booming economy has done lit-
tle to relieve the chronic housing
problems of low-income house-
holds. The supply of low-cost
unsubsidized rental units continues
to dwindle as rent increases outpace
growth in renter median incomes.
Indeed, the number of units afford-
able (at 30 percent of income) to
extremely low-income households
fell from 1.9 million in 1991 to 1.5
million in 1995. The stock of subsi-
dized housing units is also shrink-
ing as property owners increasingly
opt out of federal subsidy programs
in search of higher returns.
Low-income homeowners face sig-
nificant cost burdens as well. While
in theory these owners should ben-
efit from the drop in mortgage
interest rates, in practice their low
incomes often make it difficult for
them to refinance their home loans.
Housing Affordability and
Structural Adequacy
Despite the long economic recov-
ery, the number of unsubsidized,
very low-income renters (incomes
below 50 percent of area median)
paying more than half their
incomes for housing was vktually
unchanged between 1993 and
1995. Although changes in the
primary data source used to track
these trends tnake a more recent
5 Severe Housing Probleans Are as Prevalent in
the Suburbs as in the Central Cities
3.0
CENTP~L CITY SUBURB NONMETRO
--.,
Renters Owners Renters Owners Renters Owners
~ Severely Burdened ~lm Severely Burdened and Living in Severely Inadequate Units
[~_~ Living in Severely Inadequate Units
Notes: Very low income is less than 50% of area median. Severely burdened
defined as households paying 50% or more of their incomes for gross rent.
Severely inadequate defined as having severe problems in plumbing, heating,
electrical systems, upkeep or hallways. Renter households exclude units
that are federally subsidized.
Source: Joint Center tabulations of the 1995 American Housing Survey.
comparison impossible, the num-
ber of severely burdened house-
holds probably did increase between
1995 and 1997. Over this period,
incomes for renters in the bottom
quager of the income distribution
fell 2.9 percent and costs for units
in the bottom quarter of the rent
distribution rose 4.5 percent.
Severe payment burdens are most
prevalent among the 5.8 million
unsubsidized renters with extreme-
ly Iow incomes (less than 30 per-
cent of area median). Almost 3.9
million of these households spent
more than half their incomes on
rent in 1995 (Table A-9). Of those-
who ~'eported utility costs separate-
ly from their rents, over one in
four paid 25 percent or more of
their incomes for utilities alone.
Although affordability has become
the predominant housing issue,
problems of structural inadequacy
and overcrowding still affect a sig-
nificant number of US households.
In 1995, HUD classified 2.0 million
housing units as seriously inade-
quate. In addition, 2.8 million
households lived in units housing
more than one person per room.
Among households living in unsub-
sidized units, very low-income
renters in central cities most com-
monly face severe housing prob-
lems. As of 1995, over 2.7 million
(53 percent) of these households
paid half their incomes for gross
25
26
rent or lived in severely inadequate
units. But both owners and renters
in the suburbs also make up a
substantial share of households
suffering from severe housing
problems. In fact, the number of
households in the suburbs living
in these conditions equals that in
central cities, but a larger share
are homeowners (Fig. 25). Even
though the number of households
with severe housing difficulties is
lower in nonmetropolitan areas
than elsewhere, the incidence (on
a percentage basis) of severely
inadequate housing is considerably
higher in these locations.
While minorities in general are
more likely to experience housing
problems, the difficulties of Native
Americans in particular arc often
overlooked. Native American
26
households are nearly
twice as likely as the
general population to
live in substandard
conditions. According
to the 1990 Census,
At current rent s,
a full-time work-
er earning $7.00
per hour cannot
afford a ~odest
two-bedroom unit.
28 percent of Native Americans on
tribal lands either lived in over-
crowded housing or lacked complete
kitchen and plumbing facilities.
Impacts of Welfare Reform
Welfare reform has had its greatest
impact on the renter population.
While only a third of US house-
holds rent their homes, 80 percent
of those reporting receipt of public
assistance (TANF and general relief)
in 1998 are renters.
Although it is still unclear how
many former welfare recipients
Welfare Reform Could Affect Over One Million
Households Who Receive Housing Assistance
Number of Households Receiving Assistance ip. 199S
h~otes: incc~me assistance includes payw~nts such as T;~:F and general assistance.
Housing assistance includes Public Housing and other gcvelnm~e, nt rent subsidies.
Source: Joint Center tabulations of the 1998 Current Population Survey.
have made the transi-
tion to work, there is
no doubt that many
who are now employed
do not earn enough to
afford decent housing.
A rec~nt compilation of studies by
the Center on Budget and Policy
Priorities found that former welfare
recipients typically earn less than
$8.00 per hour, and many earn less
than $6.00 per hour. Assuming
take-home pay of $7.00 per hour
and full-time work (40 hours per
week, 52 weeks per year), a single
earner could not pay the rent on
an average, modest two-bedroom
unit an)~vhere in the US without
incurring a significant cost burden.
In fact, at current rent levels in
eight states, at least two people in
each household would have to be
employed at $7.00 per hour to
earn enough to pay the rent. Even
this estimate is very optimistic,
given that many workers are not
full time and have periods of
unemployment throughout the
),ear. Moreover, over half (57 per-
cent) of non-elderly households
receiving welfare in 1998 con-
tained only one adult.
Also troubling is the fact that
about 1.1 million renters (almos.t
16 percent) receiving housing assis-
tance in 1995 also received income
assistance (Fig. 26). As a result, the
federal housing budget may have
to pick up more of the difference
7 After Years of Growth, The NLunber of Rentals
Receiving Direct Federal Subsidies Has Fallen
350
300
·
250 --
2°° - I.
_
t
o
-50
I I I [.__ I I I I I I I I I I II I I I I II
-100
1977 1982 1987 1992 1998
Fiscal Year
Note: IUJD rent oub0idy progran"~ include Public ll3u~oin~3, Section 8, Section 236 and
rent supplest, tnt u.
Source: Co~l-essional Budget Office in IIUD's "$qaitiP~3 in Vain," b~arch 1999.
between tile rents and 30 percent
of the incomes of former recipients
who earn less than they collected
on welfare. The hope remains,
however, that welfare reform will
start former recipients on a path of
rising wages that will ulti~nately
give them more housing choices
and reduce the need for federal
housing assistance.
Lo,~s of Assisted Units
Mong with tile nmnber of low-cost
unsubsidized units, the stock of
subsidized housing has also dwin-
dled. After slowing drastically in
the 1980s and early 1990% growth
in the number of rental units
receiving HUD subsidies turned
negative between 1995 and 1998,
with the loss totaling 65,000 units
(Fig. 27). While funding for a mod-
est number of new units was.
approved in 1999 and is likely to
increase in the next budget, it is
far below the amount required to
meet the housing needs of the
large and apparently growing num-
ber of severely burdened renters.
,.
ment. The other 3.1 million subsi-
dies are tied to specific units --
roughly 45 percent of which are in
public housing and the balance in
privately owned buildings.
Years' of neglect have led to a seri-
ous backlog of repairs among the
1.1 million assisted and 350,000
unassisted units insured by HUD.
An Abt Associates study estimates
that restoring systems in these
buildings to their original wor 'king
condition would have cost $4.2 bil-
lion in 1995, up from $2.2 billion
in 1989. The price tag for repairing
a typical two-bedroom unit would
be $2,800 in newer assisted proper-
ties and $3,845 in older properties
(Fig. 28). An estimated fifth of these
costs relate to repairs to systems
essential to health and safety.
The federal government directly
subsidizes about 4.5 million units
to ensure that no
renter has to pay
more than 30 per-
cent of income on
housing, unless by
choice. Of these sub-
sidies, 1.4 million
allow recipients to
rent any unit that
meets minimum fed-
eral standards where
the landlord agrees to accept par-
tial rent payment from the govern-
On top of losses due to neglect and
demolition, increasing numbers of
subsidized units may be lost as
property owners convert their units
to market-priced rentals. In 1998
alone, the nation lost
Increasir~3
numbers of
subsidized units
may be lost
as property
owners convert
their properties
to market-priced
rentals.
17,000 subsidized units
as owners opted out of
federal programs, bring-
ing total losses since late
1996 to 30,000.
During the next five
years, contracts on two-
thirds of all Section 8
units -- involving
14,000 properties and 1 million
apartments -- are set to expire.
27
28
Forty-four states thus stand to lose
more than half the affordable units
subsidized through Section 8.
While the government promises
"portable" rental vouchers to the
low-income residents of these
units, vouchers in many cases will
not cover the difference between
30 percent of income and rents
that are above "fair market" levels.
Significant rent hikes will force
tenants either to take on high rent
burdens or to move.
HUD is now requesting authority
to use vouchers to cover the higher
rents and is working to retain these
older assisted units in the afford-
28
4,500
able stock. The barri-
ers to success, how-
ever, are formidable.
First, hot rental mar-
kets in many cities
Retaining older
subsidized units
in the affordable
stock is
more difficult.
are making the conversion to mar-
ket rates increasingly attractive.
Second, the duration of Section 8
contract renewals is now just one
year, increasing the share of own-
ers that can opt out annually and
adding to the uncertainty property
owners feel about keeping their
units affordable for extended peri-
ods of time.
Third, low federal caps on subsi-
dized rents discourage owners from
participating in the subsidy pro-
The Repair Needs of FftA-Insured Multifamily
Rentals Are Growing
1998 Dollars
grams in areas where
they can earn higher
market rents. And
fourth, HUD has
heightened enforce-
ment against owners of substan-
dard 'units. While this crackdown is
not intended to frighten landlords
already in compliance, it has raised
concerns among some property
owners that relatively minor prob-
lems may land them in court. This
fear, in turn, has reduced land-
lords' willingness to partner with a
government agency.
Even as it stands, finding enough
property owners to participate in
federal housing programs is dLfficult
in some areas. After waiting years
to obtain a subsidy, many families
ultimately have to return their
rental vouchers because they can-
not find a landlord that is willing
to take them.
4,000
3,500
3,000
2,5 r&; --.
2,000
1,500
1,000
500
0
All Properties
Needs as of 1989
Il:-' I
:.i
Unassisted Newer Assisted Older Assisted
~1~ Needs as of 1995
Notes: Based on repairs to two-bedI-oc~,, equivalent, includes r~st properties insured
before 1990 and still insured (or held) in 1995. Unassisted includes units with
~\ insurance but r~o rent subsidies.
Source: ~bt Associates, ~Status of }fo-D-insured (or }{eld) b~itifa~dly Rental
Housing," Septerl~-r 1998.
Very Low-Income Homeowners
Some 45 percent of very low-
income households are homeown-
ers. Over half of these households
are headed by females or include
at least one elderly member. In
addition, nearly one quarter are
headed by minorities (Fig. 29).
Unlike very low-income renters,
who tend to live in central cities,
very low-income homeowners are
more often found in suburban
neighborhoods (47 percent) and
normmtropolitan areas (27 percent).
29
Over Half of Very Low-Income Owner Households
Include An Elderly Member
Household Types as a Percent of Owner Households in 1995
Low-Income Housing Prospects
Households with
Elderly Member
Single Elderly
Household Head
Households vdth
Dkabled Member
Disabled Elderly
Household Head
Female
Household Head
Minority
Household Head
I I I I I
10 20 30 4O SO
Very Low Income ~1~ All Others
Notes: Very low-inc~rm defined as less than 50% of !cea! area ~=~dian. Elderly
is a~e 65 or over.
Sources: Joint Center tabulations of the 1995 A~,mrican Housir~3 S~urvey.
Nearly 60 percent of very low-
income homeowners pay more
than 30 percent of their incomes
for housing, while 10 percent pay
more than 50 percent. Faced with
these high payment burdens, some
poor owners defer basic upkeep. In
1995, only 74 percent reported per-
forming routine maintenance with-
in the preceding two years, and the
amounts they spent were signifi-
c,~.tly lower than those reported
by other homeowners. In fact, from
1984 to 1993, a million very Iow-
income owners spent less than $250
on home maintenance and/or
replacements each year on average.
As a result, an estimated 1.1 million
very Iow-income homeowners lived
in substandard housing in 1995.
Making the necessary improve-
ments is difficult even for low-
income owners that are equity-rich
but cash-poor. Low incomes often
prevent these home-
owners from being
able to refinance their
mortgages or qualify
for home equity loans
or lines of credit.
Barring unprecedented progress in
securing better-paid employment,
the only solution to the plight of
the nation's 4.9 million severely
cost-l~urdened renters is some form
of housing subsidy or income sup-
port. For at least a decade, though, '
federal policy has moved to contain
or curtail funding for such programs.
To make matters worse, the gov-
ernment recently shortened the
duration of contracts for project-
based rental assistance to just one
year. As the number of projects
with.expiring contracts rises, the
risk that property Owners will stop
participating in subsidy programs
also increases. As they
An estimated
1.1 million very
low-income
homeowners lived
in substandard
housing in 1995.
For seniors, reverse
mortgage products
that pay the owner an annuity that
is later repaid upon sale of the
home may be a viable way to gen-
erate cash to cover healthcare
needs and necessary home modifi-
cations. But even if they can get
financing, many elderly owners
hesitate to borrow against their
equity because they view their
homes as a last protection against
emergencies or because they fear
fraud or abuse by lenders.
do, the tens of thou-
sands of renters who
face displacement will
have difficulty finding
landlords willing to
accept vouchers in par-
tial payment for rent.
Adding to the nation's housing
policy challenges, many properties
that still receive federal assistance
have been seriously undermain-
tained, threatening the health and
safety of residents. Although there
have been recent efforts to demol-
ish the most dilapidated housing
projects and to make improve-
ments to others, the need for
extensive rehabilitation of assisted
units is growing.
29
30
TableA-1 Housing Market Indicators: 1975-1998
PermiB 1
(Thousands)
Single- Multi-
Year family family
1975 676 263
1976 894 4O2
1977 1,126 564
1978 1,183 618
1979 982 S70
1980 710 481
1981 S64 421
1982 S46 454
(Thousands)
Single- Multi- Manu-
family family fa~ured
892 268 229
1,162 376 250
1,451 S36 258
1,433 S87 280
1,194 551 280
852 440 234
705 379 229
663 400 234
1,068 635 278
1,084 665 288
1,072 669 283
1,179 625 256
1,146 474 239
1,081 407 224
1,003 373 203
895. 298 195
840 174 174
1,030 170 212
1,126 162 243
1,198 258 286
1,076 278 311
1,161 316 320
1,134 340 297
1,271 345 333
1983 902 703
1984 922 757
1985 957 777
1986 1,078 692
1987 1,024 510
1988 994 462
1989 932 407
1990 794 317
1991 754 195
1992 911 184
1993 987 212
1994 1,068 303
1995 997 335
1996 1,070 356
1997 1,062 379
1998 1,184 421
Note: Manufactured housing starts defined as mobile home
Pr:ce Index (CPI -UX) fez All Items.
5ales Price of
Size 2 Single-family Homes
(Med~n sq. fi.) (1998 dollars)
Single- Multi-
family family New 4 ~is~ng s
1,535 942 139,930 101,254
1,590 894 143,735 103,376
1,610 881 152,303 107,869
1,655 863 163,626 t15,639
1,645 893 171,766 118,718
1,595 915 170,188 115,815
1,550 930 167,781 111,222
1,520 925 161,786 107,992
1,565 893 158,592 107,278
1,605 871 158,166 106,974
1,605 882 154,638 108,602
1,660 876 157,821 114,009
1,755 920 160,412 117,653
1,810 940 159,776 120,032
1,850 940 158,568 121,528
1,905 955 153,272 119,101
1,890 980 149,046 116,554
1,920 985 146,596 116,293
1,945 1,005 148,456 115,453
1,940 1,0IS 151,688 115,755
1,920 1,040 151,692 116,354
1,950 1,030 150,094 117,641
1,975 1,OSO 1S1,72S 119,917
2,000 1,020 153,183 124,500
Residential Upkeep
and Improvement 6 Va~nw Rates 7
(Millions of 1998 dollars) (Percent)
Owner- ~r - For
occupi~ Rental Sale Rent
56,485 24,726 1.2 6.0
64,687 24,159 1.2 5.6
68,969 21,487 1.2 5.2
73,984 26,966 1.0 5.0
77,436 26,566 1.2 5.4 '
78,730 24,207 1.4 5.4
67,951 25,533 1.4 5.0
63,139 23,034 1.5 5.3
65,517 24,445 1.5 5.7
73,155 36,321 1.7 5.9
76,969 44,624 1.7 6.5
85,846 49,899 1.6 7.3
83,356 51,643 1.7 7.7
90,173 49,151 1.6 7.7
82,602 50,021 1.8 7.4
78,927 54,234 1.7 7.2
74,096 42,623 1.7 7.4
81,162 39,356 1.5 7.4
82,213 39,958 1.4 7.3
89,900 36,618 1.5 7.4
84,049 35,402 1.6 7.6
83,183 36,205 1.6 7.9
86,634 33,782 1.6 7.8
86,336. 30,050 1.7 7.9
placements as reported by the li~ Bureau of the Census. All value series are della
Sources: ' US Bureau of the Census, Construction Reports, Series
2. US Bureau of the Census, Construction Reports, Series
3. Naticnal Aosociation of Realtors.
4. New home price is tile 19~0 national media~t home price
5. Existing hone price ~s the 1990 median sale~; price cf
]{u~e Price Index fret, Freddie b{ac.
6. US Ex:eau of thc Census, Con~tructlon Repolts,Series
change i~i survey in !984.
7. US Bureau cf the Census, Construction Reports, Se/les
E. US Bureau of the Census, Constr~ction Reports, Selies
C-2C.
C-25.
ind~'~xed L,,v the Census Bureau's Construction Reports C-25 Constant Quality
ex!:~t:n:j 5ingle.fatally hsmes d~ter~i::ed by the National Association of Re
C-SC. ~995 figures are estimated D5' the Joint Center for Housing Studies.
H-il!.
C-3O.
TableA-2 Houseb~__,~lds b-/ Las.., end i-'exniq,r~; Type: ...... qc:n,~:,:;,_.,_20:O
Thousands
Revised
1990 1995 1995 2000 2005 2010
Total 92,257 98,262 99,202 t 04, 731 110,390 116,342
A§e of Head
Under 25 Years 5,049 4,801 4,843 4,944 5,398 5,704
25 to 34 Years 19,841 18,855 19,028 17,433 16,971 17,848
35 to 44 Years 20,518 22,898 23,107 24,096 22,802 20,859
45 to 54 Years 14,420 17,812 17,971 21,323 23,735 24,869
SS to 64 Years 12,379 12,492 12,606 14,482 18,000 21,426
65 to 74 Years 11,549 11,963 12,070 11,713 11,951 13,745
75 Years and Over 8,501 9,441 9,577 10,740 11,533 11,891
Family Type
Single Person 23,112 24,932 25,198 27,421 29,733 32,052
Married With Children 23,808 24,787 25,011 25,828 25,834 25,699
Married Without Children 27,500 28,545 28,810 30,640 33,245 36,221
Single Parent 7,477 8,734 8,813 9,193 9,327 9,463
Other Households 10,360 11,264 11,370 11,649 12,251 12,907
Notes: 1995 data are consistent with the 1990 Census. Revised 1995 data are consistent with the 1995 Current Population Survey.
Source: Hasnick, ~:cArdle, and Apgar, "US Household Trends: The i990s and Beyond,~ Joint Center for Housing Studies, 1996.
Value Put in Place s Home Sales
(Billions of 1998 dollars) (Thousands)
ngle- Multi- Additions &
',mlly family Alterations New 2 Existing
20.6 47.0 549 2,476
20.0 50.7 646 3,064
26.1 51.6 819 3,650
29.4 55.7 817 3,986
34.8 55.7 709 3,827
31.1 57.2 545 2,973
30.4 51.9 436 2,419
26.2 46.8 412 1,990
36.9 50.9 623 2,719
44.7 63.5 639 2,868
44.4 68.1 688 3,214
46.1 80.2 750 3,565
36.2 77.8 671 3,526
30.5 81.0 676 3,594
29.3 75.4 650 3,346
24.5 69.9 534 3,211
19.1 59.1 509 3,220
16.2 72.2 610 3,520
12.7 78.4 666 3,802
15.9 80.2 670 3,946
19.3 73.4 667 3,799
21.6 81.8 757 4,086
23.4 81.1 804 4,213
24.7 85.7 888 4,782
the Bureau of Labor Statistics' Cennu~,.er
~rice Index.
indexed by the Cor;vet;tlcnal Hortga~e
loccupied series modificd to accou:;%
%ppendix tables can be downloaded in
~{icrosoft Excel format from the Joint
Zenter for Housing Studies website at
;Vww. gsd.ha rvard.edu/jcenter
?he following tab[es are also available:
:k Housing Permits by State: 1995-1998, including
a comparison of 1998 levels to 198Os peaks.
!. Single- and Multifamily Housing Permits by
State: 1991-1998; Manufactured Housing
~ Placements by State: 1991-1997.
L Households by Detailed Age and Family Type:
1990-2010.
i. Home Prices by Region and Metropolitan Area:
1991-1998.
;. Terms of Conventional Single-Family
Mortgages: 1975-1998.
Homeownership Rates by Race, Age, and Family
Type: 1983-1998.
Table A-3
Large bietropolitan Areas E.%qperiencing
Three-Year Nominal House PriCe Declines
of Five Percent or More: 1975-1998
Number of
Three-Year Periods
of Prke Declines
One
Two
Three
Years of Decline
Metro Area Start End Percent Decline
Denver
Milwaukee
Providence
Boston
Detroit
New Orleans
San Francisco
San Diego
Dallas
1986 1989 -5.5
1979 1982 -6.4
1989 1992 -5.8
1988 1991 -8.5
1989 1992 -9.3
1980 1983 -6.3
1981 1984 -8.4
1985 1988 -6.5
1986 1989 -8.3
1990 1993 -7.7
1991 1994 -5.1
1991 1994 -7.4
1992 1995 -7.1
Sacramento
1985 1988 -7.8
1986 1989 -12.3
1987 1990 -8.0
1991 1994 -10.3
1992 1995 -10.0
1993 1996 -7.4
Four
ltouston 1982 1985 -11.6
1983 1986 -16.2
1984 1987 -19.0
198S 1988 -11.2
l~s Angeles 1990 1993 -9.2
1991 1994 -1S.0
1992 1995 -16.2
1993 1996 -11.9
San Antonio 1984 1987 -7.1
1985 1988 -9.3
1986 1989 -16.1
1987 1990 -11.9
Five tIartford 1988 1991
1989 1992
1990 1993
1991 1994
1992 1995
Note: Metropolitan areas are the primary named PblSA.
Source: Freddie Mac lqei§hted Repeat Sales Index.
-8.4
-10.5
-8.7
-8.2
-7.4
31
32
Table A-4
Housing Production in !tigh-Growth 14etropolitan Areas and Counties:
1 9 9 0 - 1 9 9 7 Ra~Xed by To:al Pemi~s (Thousands}
Metropolitan Areas
1990 1991 1992 1993 1994 1995 1996 1997
Total Total Total
PermiB 1993 Permi~ per
1990-97 Population 1,000 People
Washington, DC 41.8 31.9 42.4 43.8 45.2 40.9 42.4 42.1 330.5 6,978 47.4
Los Angeles 68.3 40.8 35.0 28.2 35.7 28.8 32.6 39.6 308.9 15,200 20.3
Atlanta 27.2 24.1 28.7 35.7 41.2 48.3 48.3 49.8 303.2 3,229 93.9
Chicago 31.9 27.1 32.4 35.1 38.4 36.8 38.9 35.4 276.0 8,467 32.6
New York 27.2 22.6 25.4 36.6 36.7 34.8 41.7 44.5 269.6 8,594 31.4
Dallas 20.0 19.6 21.9 26.5 34.0 36.7 38.8 44.3 241.8 4,283 56.5
Phoenix 13.4 15.4 21.0 25.5 34.8 3?.5 39.6 43.2 230.4 2,392 96.4
Las Vegas 23.9 19.8 15.7 21.0 27.8 29.5 32.4 30.9 201.0 1,013 198.5
Seattle 35.0 19.5 23.7 22.9 23.5 21.9 24.4 25.3 196.1 3,184 61.6
Miami 21.6 14.0 17.1 22.0 2?.0 27.6 21.0 22.9 173.2 3,351 51.7
Detroit 19.6 16.4 18.1 19.3 23.4 24.0 26.7 24.9 172.4 5,246 32.9
Houston 13.3 15.6 16.7 17.3 22.5 21.7 24.1 32.3 163.5 4,030 40.6
San Francisco 21.9 17.7 16.8 15.1 18.0 15.7 21.4 26.5 153.2 6,470 23.7
Philadelphia 17.7 15.2 17.7 20.1 20.1 17.7 19.5 22.0 150.1 5,941 25.3
Portland, OR 18.3 12.6 14.0 16.2 18.9 20.4 21.6 22.3 144.3 1,945 74.2
Minneapolis 15.6 14.2 18.5 19.3 17.6 17.8 18.2 16.7 137.9 2,655 51.9
Orlando 21.0 15.3 14.3 16.6 16.7 16.0 16.1 21.4 137.5 1,335 103.0
Denver 6.2 8.1 13.9 17,0 20.6 21.4 21.5 24.8 133.S 2,148 62.2
Tampa 13.1 11.1 11.0 12.5 14.7 13.6 14.7 17.0 107.7 2,135 50.5
Boston 7.8 7.7 10.5 15.7 16.3 14.8 16.0 16.4 105.2 5,467 19.2
Charlotte 10.8 8.4 9.7 10.8 13.8 13.8 185 18.2 104.0 1,233 84.3
Counties
Maricopa, AZ 13.0 14.9 20.4 24.8 33.7 36.7 38.6 41.5 223.6 2,268 98.6
Clark, NV 20.7 17.9 13.4 19.0 25.6 27.8 30.9 29.2 184.5 880 209.7
Harris, TX 10.2 12.6 12.6 13.2 15.9 14.1 14.5 23.0 116.0 3,005 38.6
Broward, Fl, 10.7 6.5 8.7 13.0 15.7 12.9 14.4 13.0 95.0 1,351 70.3
I.os Angeles, CA 25.1 t5.9 12.0 7.4 7.8 7.8 7.7 9.8 93.5 9,135 10.2
Dallas, TX 8.8 8.2 8.8 tl.2 12.? 15.1 13.2 14.5 92.5 1,928 48.0
King, WA 15.8 7.3 9.3 7.9 8.3 8.2 10.3 I 1.8 78.8 1,577 50.0
I)ade, FI, 10.9 7.5 8.3 9.0 11.3 14.7 6.6 10.0 78.2 2,001 39.1
Palm Beach, FI. 9.9 7.5 8.3 8.9 11.6 10.3 10.0 9.0 75.5 932 81.0
Orar~ge, CA 12.0 6.6 5.8 6.3 12.6 8.2 10.2 12.3 74.0 2,516 29.4
Orange, FL 9.6 9.0 6.9 8.3 9.2 9.7 8.7 11.4 72.8 728 100.0
Riverside, CA 15.4 9.3 8.2 7.3 8.0 6.8 7.5 9.7 72.2 1,321 54.7
Cook, IL 9.5 6.2 7.8 8.5 9.0 8.9 9.6 9.4 68.8 5,142 13.4
San Diego, CA 15.7 7.9 6.1 5.8 6.9 6.6 6.8 11.1 67.0 2,611 25.7
Wake, NC 4.2 4.6 5.8 7.0 10.1 8.9 9.2 10.1 59.8 476 125.6
Gwinnett, (iA 4.0 4.4 5.9 7.8 8.3 9.8 9.5 9.3 59.1 413 143.1
Mecklenburg, NC 6.1 4.3 5.1 6.0 8.2 7.7 10.4 10.3 58.2 549 106.1
Tarrant, TX 4.9 5.0 5.1 6.0 7.4 8.9 9.5 10.1 56.8 1,235 46.0
Travis, TX 1.8 2.8 4.9 7.0 8.7 9.8 11.8 9.4 56.0 631 88.7
Collin, TX 4.3 3.8 4.8 5.6 8.5 7.0 8.5 11.6 54.2 308 175.9
Franklin, OH 6.9 5.9 6.7 7.1 7.3 6.8 7.3 6.2 54.0 999 54.0
Hillsborough, FL 5.5 4.4 4.7 5.2 7.5 7.l 8.9 9.1 52.5 865 60.6
San Bernardino, CA 13.3 6.8 7.3 5.8 4.8 3.9 4.8 5.4 52.1 1,546 33.7
Fulton, GA 6.2 3.8 3.9 5.1 7.8 8.9 8.1 8.1 52.0 677 76.8
Notes: Includes metropolitan areas with over iC0,COC permits and counties with over 50,090 pern!ts. Metropolitan areas are
CMSAs and HSAs with only the name of the principal central city given. Hetropolitan areas are defined by the Office of
Hanagenent and Budget as of 1993. For Uew York and Boston, metropolitan area dufinitions are those in effect for the par-
ticular year, while populatlen estimates are based on 1996 area definitions.
Sources: US Bureau cf the Census, Construction Reports, Series C-40, and ~etropolltan and Count}' Population Estimates.
Table ^-5
Population Growth in Large Cities and Their Surrounding Areas: 1990-1996
Thousands
Metropolitan Areas
_ Population Absolute Change Annual Percent Change
1990 1996 1990-96 1990-96
City Area Central Surrounding Central Surrounding Central Surrounding Central Surrounding
(Square Miles) City Area City Area City Area City Area
Total 7,697 39,414 91,323 39,916 99,001 502 7,678
Atlanta 132 394 2,566 402 3,139 8 573
Baltimore 81 736 1,646 675 1,799 -61 153
Boston 48 574 4,881 558 5,005 -16 124
Buffalo 41 328 861 311 864 -17 3
Charlotte 174 420 742 441 880 21 138
Chicago 227 2,784 5,456 2,721 .%,879 -63 423
Cincinnati 77 364 1,454 346 1,575 -18 121
Cleveland/Akron 139 729 2,131 715 2,198 -14 67
Columbus 191 633 712 657 791 24 79
Dallas 716 1,716 2,321 1,828 2,747 112 426
Denver/Aurora 286 690 1,290 750 1,527 60 237
Detroit 139 1,028 4,159 1,000 4,284 -28 125
Hartford 17 140 1,018 133 1,012 -7 -6
Houston 540 1,639 2,092 1,744 2,509 105 417
Indianapolis 362 731 649 747 745 16 96
Kansas City 312 435 1,148 441 1,249 6 101
Los Angeles 668 4,702 9,830 4,822 10,673 120 843
Miami 36 359 2,834 365 3,149 6 315
Milwaukee 96 628 979 591 1,052 -37 73
Minneapolis/St. Paul 108 64] 1,898 618 ~,147 -23 249
New Orleans 181 497 788 477 836 -20 48
New York 348 7,826 11,724 7,878 12,060 52 336
Norfolk 302 654 791 664 876 10 85
Orlando 67 165 1,060 174 1,243 9 183
Philadelphia 135 1,586 4,307 1,478 4,495 -108 188
Phoenix/Mesa 529 1,273 965 1,504 1,243 23l 27.6
Pittsburgh 56 370 2,025 350 2,029 -20 4
Portland, OR 125 464 1,329 481 1,S97 17 268
Providence 19 161 973 153 971 -8 -2
Rochester, NY 36 230 832 222 866 -8 34
Sacramento 96 369 1,112 376 ] ,256 7 144
Salt Lake City 109 160 912 173 1,045 13 133
San Antonio 333 959 366 1,068 422 109 56
San Diego 324 1,111 1,387 1,171 1,484 60 97
San Francisco 274 1,878 4,372 1,941 4,664 63 292
Seattle 84 516 2,454 525 2,796 9 342
St. ! cuis 62 397 2,095 352 2,196 -45 101
'Ia:: pa/St. Petersburg 168 520 1,548 521 1,678 1 130
Washington, DC 61 607 3,616 543 4,020 -64 404
0.2 1.4
0.3 3.7
-1.4 1.5
-0.5 0.4
-0.9 0.1
0.8 3.1
-0.4 1.3
-0.8 1.4
-0.3 0.5
0.6 1.8
1.1 3.1
1.4 3.1
-0.5 0.$
-0.8 -0.1
1.1 3.3
0.4 2.5
0.2 1.5
0.4 ] .4
0.3 1.9
-1.0 1.2
-0.6 2.2
-0.7 1.0
0.1 0.5
0.3 1.8
0.9 2.9
-1.1 0.7
3.0 4.8
-0.9 0.0
0.6 3.4
-0.8 0.0
-0.6 0.7
0.3 2.2
1.4 2.4
1.9 2.6
0.9 1.2
0.6 1.1
0.3 2.3
-1.9 0.8
0.0 1.4
-1.8 1.9
Notes: Hetropolitan areas shown are those with population over I million in 199C. ~etroFgl~tan boundaries are as of ~996.
Central city includes named central city and all other cities in the ~etro area with population over 200,000 in 1990. New
York include~ Newark and Jersey City. Los Angeles includes Long Beach, Anaheim, Santa Ann, and RiYers~de. San Francisco
includes San Jose and Oakland. Dallas includes Ft. Worth and AIlin~ton.
Sources: US Bureau of the Census, "Estimates of the Population of Cities with Populations of 100,000 and Greater," July I,
1996; ~Estimates of the Population o~ Metropolitan Areas,# July i, !996; and 'County and City Databook," 1994.
33
Table A-6 Home Purchase Loan Activity for Large ~,ietropolitan Areas: 1997
34
% Residing
in Suburbs
All Minority
Number of Owner~ Owners
Loans (1990) (1990)
% of Loans
to Minorities
% of Loans Made: Made:
To To
Low- High- In Mostly
in To income Income In White
Suburbs Minoritie~ Borrowers Borrowers Suburbs Suburbs
% of Loar~ % of Loans
to Low-income to High-income
Borrowers Made: Borrowers Made:
In
Moderate/
High- In
In Income In Low-Income
Suburbs Suburbs Cities City Areas
Total
3,241,681 67.7 47.5 70.7 19.0 28.4 43.2 60.0 19.2 66.1 33.1 27.2 3.7
All Metro Areas in the:
Northeast
Midwest
South
West
501,974 75.8 42.7 77.6 15.0 25.5 45.6 52.0 22.6 71.5 36.7 20.0 2.9
729,107 67.1 31.2 70.1 12.1 33.0 37.0 49.2 26.3 61.3 33.6 23.2 4.6
1,203,530 66.6 49.0 72.7 20.9 29.7 43.5 65.7 13.8 70.5 33.9 26.9 3.3
807,070 61.6 56.8 64.0 24.9 24.2 47.1 60.6 7.0 60.3 28.8 34.8 4.2
Largest Northeastern Metros
New York
Philadelphia
Boston
Pittsburgh
Hartford
Providence
Rochester
Buffalo
192,632
72,854
77,810
23,564
14,168
12,327
12,589
10,314
71.8
71.1
78.9
87.9
92.7
65.9
84.7
75.3
45.5
33.0
50.7
57.7
64.5
41.9
41.2
22.1
73.3
81.0
77.5
89.9
92.0
65.8
85.5
81.6
23.1
17.9
9.8
6.0
14.9
8.5
8.9
8.3
20.6
32.2
26.5
24.3
37.8
27.5
30.6
26.8
51.0
41.8
,13.1
49.5
32.1
40.1
39.2
41.9
53.2
51.4
51.2
68.2
74.0
32.6
42.7
37,2
16.4
21.4
36.5
47.5
36.1
26.1
37.6
30.6
78.5
63.0
65.8
84.8
87.2
S1 .S
74.0
64.9
37.0
34.2
34.0
31.6
48.6
37.9
36.6
40.3
30.3
8.1
15.5
7.7
3.7
24.0
7.4
9.7
3.2
1.7
4.1
1.7
0.9
4.1
3.2
2.6
Largest Midwestern Metros
Chicago
Detroit
Cleveland
Minneapolis
St. l.ouis
Cincinnati
Kansas City
Milwaukee
128,744 69.7 33.9 71.2 25.1 29.9 39.6 54.4 17.0 65.1 40.8 24.9 7.1
90,730 77.9 24.3 86.8 13.0 34.2 36.7 52.1 28.7 78.4 42.1 7.2 2.1
40,643 75.2 37.2 77.6 12.2 30.1 40.3 48.2 25-.5 60.8 37.4 10.8 4.1
50,666 78.9 50.2 81.8 8.6 41.2 28.6 53.4 49.7 73.5 38.6 12:0 2.3
43,096 81.1 53.9 85.5 13.0 37.6 34.2 73.4 32.1 79.6 38.2 9.2 3.0
32,675 80.5 ,16.3 83.3 7.1 31.6 38.6 60.2 38.0 78.2 37.7 13.9 4.7
29,169 60.6 17.4 68.2 9.9 33.7 37.0 40.9 34.4 60.4 32.0 26.4 2.1
22,638 61.5 13.1 66.1 12.6 25.7 41.9 21,3 20.0 43.1 31.3 19.7 4.1
Largest Southern Metros
Washington
Dallas
t4ouston
Atlanta
Miami/Ft. Lauderdale
Tampa/St. Petersburg
Norfolk, VA
San Antonio
Largest Western Metros
Los Angeles
San Francisco
Seattle
Phoenix
Sacramento
San Diego
Denver
Portland
117,865 81.2 60.7 85.1 26.7 37.0 34.5 79.1 12.4 81.2 42.1 13.0 3.0
83,216 59.1 35.6 69.1 19.1 27.4 46.4 58.4 12,0 61.4 28.0 27.5 3.2
63,930 58.4 40.2 71.7 28.0 28.0 48.1 61.7 6.5 64.3 40.3 26.0 3.9
83,080 90.3 69.9 92.9 24.7 32.6 39.3 92.6 32.2 93.9 44.6 9.2 1.5
62,354 87.3 83.5 88.1 54.1 23,7 49,0 89.9 5.3 91.2 46.3 15.1 4.8
41,370 73.6 48.5 77.4 13.8 29.3 45.3 66.7 25.1 74.4 32.2 21.5 2.1
22,039 27.9 22.6 34.6 22.2 28.3 40.8 25.4 4.4 26.4 16.4 57.9 4.5
20,005 32.6 19.8 46.4 38.6 24.7 50.2 38.1 2.7 40.1 25.9 50.8 2.8
192,321 69.1 67.5 70.0 39.3 20.7 5I .7 68.2 0.9 68.8 32.9 29.9 3.6
102,420 60.9 48.1 62.0 32.0 17.2 56.4 55.9 1.9 56.4 26.3 34.9 5.1
66,892 71.4 54.3 74.8 13.3 24.9 42.5 70.1 35.5 72.9 32.7 25.4 3.5
67,997 35.0 36.7., 45.5 15.4 30.3 42.4 38.8 9.8 41.8 19.9 SS.2 3.S
26,002 72.7 51.6 77.3 22.6 25.9 45.9 61.9 6.8 69.1 40.0 17.9 2.2
37,0tl 53.8 43.4 51.7 22.7 17.8 56.6 48.5 2.3 50.7 24.6 49.3 3.1
S7,388 70.1 S2.1 75.S 15.4 34.0 35.8 64.7 18.4 70.7 38.0 22.4 5.8
41,293 69.3 51.9 74.4 10.5 20.5 49.1 70.0 47.3 67.4 32.2 23.0 5.7
No[es: Hetropolitan areas shown are the e:ght largest in each region. Hetro boundaries are as of 1996. Excludes loans made
outside metro areas, in Puerto Rico, or for which valid applicant income was not given. Mostly white areas are those in which
minorities made up less than i0% of the population in 1990. Low-income loans are those to borrowers with incomes less than
8C% of metro median in 1997. High-income loans are those to borrowers with incomes at or above 120% of metro area median in
1997. Low-income areas are those in which the tract median income was less than 60% of the metro median in 1989. Moderate/
high-income suburbs are those in which the tract median income was at or akove the metro median in !9~9. Freddie Hac data on
the share of tract population in central cities was used to apportion the loan and owner data to central cities and suburbs.
Sources: Joint Center tabulations of the 1597 }[one Hortgage Disclosure Act data and i99C Decennial Census STF 3A files;
Freddie Mac data on the share of tract population in central cities.
TableA-7 Income and Housing Costs, US Totals: 1975-1998 1998 Dollars
Cost as Percent of Income
Owners Renters
--
After-Tax Before-Tax After-Tax
Home Mortgage Mortgage Mortgage Contract Gross Mortgage Mortgage Contract Gross
Year Owner Renter Price Rate Payment Payment Rent Rent Payment Payment Rent Rent
1975 3,287 1,909 101,254 8.92 728 600 407 468 22.1 18.2 21.3 24.5
1976 3,316 1,875 103,376 8.87 740 610 407 471 22.3 18.4 21.7 25.1
1977 3,439 1,891 107,869 8.82 769 680 408 475 22.4 19.8 21.5 25.1
1978 3,381 1,871 115,639 9.37 865 744 409 477 2~.6 22.0 21.8 25.5
1979 3,359 1,836 118,718 10.59 985 837 401 470 29.3 24.9 21.9 25.6
1980 3,268 1,733 115,815 12.46 1,109 919 394 466 33.9 28.1 22.7 26.9
1981 3,287 1,719 111,222 14.39 1,217 991 392 467 37.0 30.2 22.8 27.2
1982 3,296 1,677 107,992 14.73 1,208 999 399 479 36.6 30.3 23.8 28.6
1983 3,328 1,691 107,278 12.26 1,012 840 406 490 30.4 25.2 24.0 29.0
1984 3,412 1,739 106,974 11.99 990 827 411 494 29.0 24.2 23.6 28.4
1985 3,509 1,767 108,602 11.17 943 790 423 505 26.9 22.5 23.9 28.6
1986 3,631 1,797 114,009 9.79 885 745 440 521 24.4 20.5 24.5 29.0
1987 3,671 1,782 117,653 8.95 848 741 442 519 23.1 20.2 24.8 29.1
1988 3,674 1,826 120,032 8.98 868 777 441 515 23.6 21.1 24.2 28.2
1989 3,724 1,895 121,528 9.81 945 840 437 510 25.4 22.6 23.1 26.9
1990 3,617 1,819 119,101 9.74 920 819 432 503 25.4 22.6 23.8 27.6
1991 3,560 1,735 116,554 9.07 849 760 429 499 23.9 21.4 24.7 28.8
1992 3,534 1,694 116,293 7.83 756 685 427 496 21.4 19.4 25.2 29.3
1993 3,488 1,692 115,453 6.93 686 628 424 494 19.7 18.0 25.1 29.2
1994 3,575 1,732 115,755 7.31 715 655 424 492 20.0 18.3 24.5 28.4
1995 3,617 1,758 116,354 7.69 - 746 681 422 489 20.6 18.8 24.0 27.8
1996 3,657 1,781 117,642 -7.58 746 681 421 487 20.4 18.6 23.7 27~4
1997 3,748 1,784 119,917 7.52 756 690 424 490 20.2 18.4 23.8 27.5
1998 3,819 1,787 124,500 6.97 743 681 431 495 19.5 17.8 24.1 27.7
Monthly Income Owner Costs Renter Costs
Notes: All dollar amounts are expressed in 1998 constant dollars using the Bureau of Labor Statistics' Consumer Price Index
(CPI-UX~ for AIl Items. Monthly incomes of families and primary individuals from 1975 to 1983 are from the ~mer~can Housing
Survey; incomes from 1984 to 1997 are from the American }lousing Survey adjusted by the Current Population Survey. Incomes for
1998 ar~ adjusted by HUD median family income data, weighted by o',~ers' and renters' contribution to income growth as calcu-
lated from tile 1996 and 1997 Current Fopulation Surveys.
Home price is the 1990 median sales price of existing single-family homes determined by the National Association of Realtors,
indexed by the Freddie Mac Conventional Mortgage Home Price Index, deflated by the CPI-UX.
l~ortgage rates are from the Federal !lousing Finance Board Monthly Interest Rate Survey. Mortgage payments assume a 30-year
msrtgage with 10% down. After-tax mortgage payment equals mortgage payment less tax savings of homeownership. Tax savings are
based on the excess of housing (mortgage interest and real-estate taxes) plus nonhousing deductions over the standard deduc-
tion. Nonhousing deductions are net at 5% of income through 1986; they decrease to 4.25% in 1987 and 3.5% from 1988 on.
Contract rent equals median 1977 contract rent from the A~erican Housing Survey, indexed by the CPI residential rent index,
wLth adjustments for depreciation in the stock before 1987. Gross rent equals contract rent plus fuel and utilities.
35
Table A-8
and Renter Households and ~.{on[eo'.,,~-..-~ezship Rates by Age of !{earl:
2000-2010
2000
Owners Renters Homeownership
[Thousands) (Thousands) Rate
Total 70,277 34,459 67.1
Under Age 25 830 4,112 16.8
Aged 25 to 34 7,945 9,489 45.6
Aged 35 to 44 15,936 8,160 66.1
Aged 45 to 54 16,138 5,187 75.7
Aged 55 to 64 11,574 2,909 79.9
Aged 65 to 74 9,569 2,144 81.7
Aged 75 and Over 8,285 2,457 77.1
Source: Joint Center projections.
2005 2010
Owners Renters flomeownership Owners Renters flomeownership
(Thousands) (Thousands) Rate (%) (Thousands) fihousand$) Rate (%)
75,349 35,041 68.3 80,461 35,883 69.2
908 4,490 16.8 960 4,744 16.8
7,790 9,182 45.9 8,160 9,688 45.7
15,308 7,494 67.1 14,169 6,689 67.9
17,922 5,813 75.5 18,904 5,966 76.0
14,528 3,470 80.7 17,392 4,035 81.2
9,809 2,143 82.1 11,389 2,357 - 82.9
9,083 2,450 78.8 9,488 2,404 79.8
36
Table A-9
Housing Quality and Cost Burdens Among E~trenaely and Very Low-Income
Households: 1995 ?no ....
Owners Renters
Severely Severely Severely Severely
Total Burdened Only Inadequate Units Total Burdened Only Inadequate Units
Extremely Low Income
Total 5,638 2,566 195 5,751 3,753 245
Region
Northeast 1,020 587 24 1,373 892 94
Midwest 1,349 635 32 1,160 768 43
South 2,253 877 108 1,697 1,013 69
West 1,016 467 32 1,520 1,079 39
Location
Central City 1,506 708 45 2,994 2,004 152
Suburb 2,693 1,330 72 1,908 1,298 48
Nonmetro 1,438 529 79 850 450 45
Race/Ethnicity
White 4,203 1,940 l 18 3,023 1,956 96
Black 869 387 54 1,329 861 81
Hispanic 436 178 16 1,097 712 62
Other 129 61 7 303 224 6
Household Type
Married with Children 659 410 31 670 419 25
Single Parent 418 250 17 1/180 1,035 45
Single Elderly 1,726 600 36 925 525 27
Other 2,834 1,307 112 2,675 1,775 149
Age of Head
Under 25 Years 63 35 2 938 720 31
25 to 34 Years 379 220 12 1,370 908 58
35 to 44 Years 713 416 31 1,105 709 S0
45 to 54 Years 725 409 26 639 398 37
55 to 64 Years 9.55 484 31 485 318 29
65 Years and Over 2,803 1,004 93 1,214 699 40
Very Low Income
Total 6,069 895 163 5,021 l, 178 l S 1
Region
Northeast 1,203 206 2l 893 266 49
Midwest 1,489 168 35 946 151 39
South 2,338 296 76 1,701 341 40
West 1,O38 224 31 1,480 421 24
Location
Central City 1,518 244 45 2,237 532 68
Suburb 2,853 468 63 1,949 450 49
Non metro 1,697 183 54 834 196 34
Race/Ethnicity
White 4,804 661 114 2,91 l 768 70
Black 721 101 31 906 185 40
ttispanic 425 82 1 S 962 166 30
Other 119 51 2 241 60 11
Household Type
Married with Children 778 163 20 963 109 27
Single Parent 497 136 14 982 196 25
Single Elderly 1,609 149 26 544 194 10
Other 3,184 447 103 2,532 679 89
Age of Head
Under 25 Years 80 26 0 806 201 18
25 to 34 Years 437 100 10 1,468 283 30
35 to 44 Years 783 199 24 1,081 192 39
45 to S4 Years 638 181 20 538 163 30
SS to 64 Years 773 108 41 340 88 19
65 Years and Over 3,358 281 66 788 251 14
Hotes: Extremely low income ~s less t~n 30t of area median; very low is between 30% and 50%. Severely burdened defined as households
paying 50% or more of their ~ncomes for gross monthly housing costs. Severely inade~aate defined as having severe problems in plum~-
lng, heating, electrical systems, upkeep or hallways. Renter households exclude those with federal subsidies. Kispar~ics may be of any
race. Other households includes Asians, Pacific Islanders, ~ative Americarm, and all other racial groups not shohT, separately.
Source: Joint Center tabulaticns of the 1995 American Housing Survey.
Prepared by the staff of the Joint Center for Housing Studies of Harvard University
Kermit Baker
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CITYOF
~90 Ci(y Center Ddve, PO Box' 147
Cl~anhassen, Minnesota 55317
Pho,e 612937.1900
General Far. 612.93Z5739
£ngineering tax 612.937.9152
Public Safbo, Fax' 612.934.2524
Web www. ci. &anhassen. mn. us
MEMORANDUM
TO:
FROM:
DATE:
SUBJ:
Scott Botcher, CiW Manager
Kate Aanenson, Community Develop.ment Director
January 18,2001
Bluff Creek Watershed
Attached please find the Bluff Creek Watershed Natural Resources Management
Plan and the Bluff Creek Overlay Ordinance. I will discuss the background on
the creation of this district at Monday's meeting.
~ Cit~, ofChmlhassen./l ~,'owhte community, with clean lakes, attalin, school~, a cha,nh~e downtown, thrivine businesses, and beautifid ~arks. ,4 vreat ~/ace to live. work. and t#av.