|
Housing Forum Highlights from Housing Forum Keynote Speaker: Louie Jambois, Director of Business and Community Development with the Department of Employment and Economic Development (DEED). Panelists: Tarry Edington, Housing Development Specialist with Itasca County HRA; Scott Zahorik, Assistant Housing and Energy Director with Kootasca Community Action and Skip Duchesneau, Vice President of D.W. Jones, Inc. The Housing Forum held May 18, 2004 was the thirteenth in a series of JOBS 2020 forums. The purpose of the forum was to show how the availability of housing relates to workforce and economic development. The keynote speaker, Louie Jambois, covered the following points:
Louie described the key elements that help generate (but do not necessarily guarantee) economic development as:
The best economic development creates jobs that sustain families and communities, provides financial support for education, transportation and housing and provides the customers and employees for the existing retail and service businesses. Louie reminded the audience that economic growth cannot happen without change. A mix of support for local economic development and new business development must be given. Growth from within is the most likely, but new investment from outside should be encouraged. In other words, “bring in other people’s money”. Economic development determines the need for housing. Obviously growing areas need additional housing for a growing workforce. Stable areas need preservation of existing units and the replacement of lost units, and declining areas need to preserve decent, safe and sanitary housing options. The type of housing needed is market driven. Job Opportunity Building Zones (JOBZ) JOBZ is the first really big economic development program devised in the past thirty years. Since January 1, 2004, 325 subzone communities have been formed, over 29,000 acres of Industrial or value-added property has been designated and currently 132 deals are “in the works” all over the state. Louie sited several direct and indirect links between economic development and housing that can be attributed to JOBZ. As we move forward, Louie reminded the audience:
Housing Development within Itasca County – Tarry Edington Tarry Edington shared information on the Itasca Housing Coalition which has the ultimate goal of stimulating housing development and services in Itasca County. Information about the Coalition can be found at their website at: www.itascahousingcoalition.com. Figures from the 2003 Grand Rapids Housing Study indicate that 895 additional housing units will be needed in Itasca Countyby 2010. That figure includes 215 senior-occupancy rental units, 350 owner-occupied units, and 330 general-occupancy rental units. Of the approximately 18,000 households in Itasca County, household income is distributed at 30% earning $25,000 or less, 32% earning between $25,000 and $50,000 and 37% earning more than $50,000. The lack of available building materials along with the rising costs of those materials and the anticipated higher interest rates will have a profound affect on the ability to build or buy a home. The definition of “affordable” housing costs is 30% of one’s annual income. With 62% of the population earning less than $50,000 a year, the ability to own a home diminishes along with those rising costs. Tarry outlined the paradigm or model for income requirements, building costs and GAP financing that is being faced today. Cooperation between private/public partnerships is essential to assist the home owner or renter. Housing Rehabilitation – by Scott Zahorik One of the goals of KOOTASCA Community Action is to strengthen and build capacity though tenant organizing, public policy and resource development to assure all low income people have safe, decent, affordable housing and an improved quality of life. In 2002 and 2003 KOOTASCA built four new 3 bedroom single family homes and sold them to four low income families. The average affordability gap on the homes was $13,614. Minnesota Housing Finance Agency (MHFA) provided the gap funding. Since 1997, the agency purchased, rehabilitated and sold 16 homes to low income, “at risk” homeowners. The average subsidy required for these homes averaged over $15,000 and was provided again by the MHFA. KOOTASCA also has worked with the MHFA on their Deferred Loan Program since 1980. Over the past 5 years 94 homeowners have used the program which helps low income, single family homeowners rehabilitate their homes. Currently there are 87 households on the waiting list. KOOTASCA is also working with MHFA to become an administrator of their Fix-Up Fund Program. The program allows homeowners up to $35,000 to make home improvements. The income limits to access this program are higher than the traditional low income programs. Additional programs the agency has worked with include DEED on the Small Cities Development Program, the Low Income Weatherization Program with the Department of Energy. KOOTASCA has also worked with the Home Stretch Program which provides education for potential home buyers and can assist graduates with down payment and closing cost assistance. Scott discussed some of the housing barriers:
Developer’s Perspective - by Skip Duchesneau D.W.Jones, Inc. is a northern Minnesota real estate development company and currently has 1600 multi-family housing units under management contract in the Itasca area. They include the Grand Manor elderly unit constructed in 1998 and more recently Colony Square, a 37 unit Cooperative, which was completed in 2002. Current trends in multi-family housing include contributions from employers, cities and HRAs. Participation from local government, local HRA’s and employers are essential components of developing affordable completion of market rate multi-family housing projects. D.W.Jones uses tax credits to finance the mortgages of these multi-family developments. Unfortunately, tax subsidies are being phased out. In 2003 rental rates were increased by 8.5% in order to keep pace with rising costs. Property insurance rose by 26%. In order for a building complex to be cost feasible, a minimum of between eighteen to twenty-four units must be built. It is an economy of scale: Twelve units cost more per unit to build than eighty units. Conclusion: The bottom line is that housing is a basic need the same as food, clothing and healthcare and each are required for a healthy community and a healthy workforce. Housing and economic development are interrelated and interdependent.
|