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Contact:
Jan Callison, Hennepin County Board, 612-348-6885
Peter McLaughlin, Hennepin County Board, 612-348-7884
Margo Geffen, Hennepin County Community Works, 612-543-1965
Maria Elena Baca, Hennepin County Communications, 612-348-7865
The Hennepin County Board of Commissioners, voting as the Housing and Redevelopment Authority, agreed to invest $3 million in a fund that will be used to finance the purchase of about 530 units of existing affordable housing in the county.
The county's investment is part of a $25 million metro-area initiative by the Greater Minnesota Housing Fund, to acquire these units to keep them affordable. The program will target rental properties that are at risk of being converted to higher rents, and where low- and moderate-income residents are at risk of being displaced.
Affordable housing at risk
In Hennepin County, housing costs for 150,000 families consume more than 30 percent of their gross incomes; for about 60,000 households, rent is in excess of 50 percent of their incomes.
In this housing market, nonprofit and socially minded developers cannot compete with investors who are ready to purchase properties with cash on hand, ready to renovate and raise the rent. Their eagerness to buy up housing has further constricted an already tight rental market. More limited use of Federal Section 8 housing choice vouchers and state Group Residential Housing also has hurt county social service clients, who rely heavily on those programs for safe, stable housing.
“We know that stable housing is important to everyone,”
said County Board Chair Jan Callison. “It's particularly challenging for
those in our community who are the most vulnerable and in need of county
services.”
Preservation makes sense
Callison also said that from an economic standpoint, it's more efficient to maintain Hennepin County's existing housing than to look for opportunities to create new housing.
Currently, Hennepin County has approximately 82,000 units of unsubsidized multifamily
rental housing, with rents affordable to households with incomes at or below 60
percent of the county's average median income, which is $51,480 for a family of four. Rents in
these “naturally occurring affordable housing” units average between
$550 and $1,200 per month. The properties range in size, age, location, and
ownership.
About half of the metro area's naturally occurring affordable housing rental units are located in Hennepin County.
Making a difference in people's lives
Safe, clean and affordable housing has a tremendous impact on all aspects of a person's life, said Hennepin County Commissioner Peter McLaughlin.
"For families already in housing, even small increases in rent have an impact on health care, job stability, nutrition, school performance and attendance," he said. "For families experiencing homelessness, the lack of affordable housing forces them to stay longer in emergency shelter. We can do better."
The balance of the initial $25 million invested in this project is expected to come from institutional, philanthropic and socially conscious investors. The county's $3 million investment will leverage $22 million in private investment to preserve affordable housing.The fund will provide 30 percent of the equity needed to finance housing purchases; the remainder will come from traditional mortgage financing.
“Hennepin County is leading the way to preserve naturally affordable, unsubsidized rental housing
before it is lost to market forces,” said Warren Hanson, president and CEO of
Greater Minnesota Housing Fund (GMHF). “The County’s commitment to the NOAH
Impact Fund is a social impact investment that will prevent the displacement of
low-income renters in Hennepin County.”
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Look for more news on
the Hennepin County website at www.hennepin.us/news.
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