EVICTION NOTICE
Nicolai, Dan
EVICTION NOTICE How City Hall helps Washington push people into the streets BY DAN NICOLAI To write an article about low-income housing in Minneapolis, go to a shelter for the homeless and find...
...The relocation allowance, which the city pays, is based on the rent difference over forty-two months...
...High-profile cooperative ventures...
...The tax had to be approved by the state legislature...
...When displaced by new construction, single-room tenants of the old downtown buildings, mostly dating from before the 1920s, are given $3,000 to $4,000 in relocation money and referred to other apartments in the general vicinity...
...The city council recently voted to sell $102 million in bonds to finance the dubious project and an adjoining parking ramp...
...The mechanism enabled the city council to aid the expensive Laurel Village apartments in an area near downtown that now contains a vacant drugstore and two run-down hotels...
...A nonprofit partnership took over a large group of low-rent units this spring, after the owners of a building with 669 rent-subsidized units defaulted...
...The monies the cities are putting into housing are ridiculously minuscule compared to what has gone into what the mayor likes to call 'everybody's neighborhood'— downtown...
...Although Minneapolis's homeless are typically single men who would live in single-room units, a recent study by the University of Wisconsin indicates that the fastest-growing homeless group here consists of families with children...
...Both types of subsidies to privately owned low-rent housing—new public housing projects are virtually nonexistent—have specific expiration dates, and new subsidies are increasingly scarce...
...At the same time, it has aided developers of a new convention center, two new downtown shopping centers, and a number of market-rate apartment buildings...
...One kind of Federal rental assistance provides for contract-renewal dates, usually at five-year intervals, when building owners can opt out of contracts...
...Today the streets are quiet...
...But the cost of "even very modest low-income housing" is around $30,000 per unit...
...You know: poverty with a human face...
...Men are sleeping in the bus stops...
...The reason: Low-rent housing doesn't pay...
...But as long as the city's commitment to low-income housing is outweighed by its commitment to high-profile projects directed mainly at the gentrifica-tion of downtown, all partnerships can do is play catch-up with a crisis...
...This sort of story has appeared countless times in metropolitan newspapers in the past few years, since it became clear that New York was only the first—not the only—American city to endure a plague of homelessness and a shortage of low-cost housing...
...It's sort of like cleaning up pollution, according to Larry McDunna, an attorney with the Minneapolis Legal Aid Society who works with members of Alliance of the Streets...
...Nonprofit developers have created most of the new low-rent units in the city since 1980...
...These units are occupied mostly by families and the elderly...
...Talk to some responsible policy-maker...
...They'll just move up into higher-cost housing for a couple of months...
...Everyone wants to blame Reagan, and that's fine, Reagan's a jerk," says Mary Jo Jackson, director of Minneapolis's Housing Resources Network...
...And the term SRO is deceiving, because several people often live in these efficiencies and one-bedrooms...
...Until the Laurel Village project pays for itself through property-tax revenues, says Jack Cann, "property taxes are going to pay the bonds, tax money is going to go to the bond-holders rather than the city government...
...The city councils of Minneapolis and St...
...H More family units will be eliminated when certain Federally assisted rental contracts and mortgages come up for renewal or prepayment...
...Mary Jo Jackson says her Housing Resources Network placed 220 families last year...
...But the city's policies with regard to development have been just as disastrous...
...Interview her, take some photographs...
...11 An undetermined number of family and multifamily units has been lost to development or to the lack of Federal or city money for renovation or repair of old duplexes...
...Some people are sleeping in the street beside buildings, bundled in gray clothes...
...That's why government has to take charge in the first place, and why the Reagan Administration got out...
...Tax reform repealed those allowances...
...Someone like Hennepin County Commissioner Randy Johnson, who told a Minneapolis Star-Tribune reporter last spring that most people are in shelters "because they made a series of lousy decisions in their lives...
...You have to tell the developer, if you're going to come in you have to replace it [low-rent housing...
...cities, is experiencing both a growing shortage of low-rent housing and a boom in downtown construction...
...But low-income housing doesn't pay up that way, says Minneapolis housing consultant Jack Cann...
...Why can't they do that with housing...
...But an ordinance guaranteeing decent housing for low-income people, or even keeping the inadequate supply from diminishing, is still many political hurdles away...
...Not all of the owners of buildings housing Federally subsidized units will opt out of their contracts, but many may...
...To get the same yield, owners are going to have to raise rents...
...That means that more than half of Minneapolis's low-income households are paying more than 40 per cent, and often as high as 80 per cent, of their incomes for rent...
...since then, most waiting lists have simply been closed to newcomers...
...And they are not just Reagan Republicans...
...Conferences...
...The best provider of low-income housing in the inner city is [nonprofit developers...
...Minneapolis and elsewhere...
...They're tearing the convention center down on this side and putting it up on that side," she said...
...But so far Minneapolis has done little to crawl out of it...
...This is meant to explain why the city has subsidized the construction of virtually no new low-rent housing units in the past ten years...
...It got a lot of people off the hook...
...One resident of the Areola Apartments, condemned to make way for the convention center, says the two places to which he was referred cost $254 and $259 a month, compared to the $180 he was paying at the Areola...
...Their numbers have doubled since 1980...
...Overall, rents in Minneapolis have risen by 25 per cent since 1983, with little concurrent rise in wages...
...Or, increasingly, they are living on the street...
...Poverty in Minnesota has increased by 27 per cent since 1979...
...While the supply of low-cost rental housing was disappearing in the early 1980s, the city was subsidizing such housing projects as Symphony Place and the Churchill Apartments, with 610 units that rent for as much as $995 per month for a two-bedroom place...
...The city's "emergency" shelters consistently operate near their capacity of 750 to 800 beds...
...One day last June, low-income and homeless people gathered there with housing advocates to eat ice cream and talk politics...
...Councilman Brian Coyle, who cosponsored the resolution, says its opponents feared it would discourage downtown development, and the result was a watered-down version...
...The specific mechanism used for Laurel Village, which is used in most city redevelopment," says Cann, "does not work particularly well for low-income housing [because] it doesn't generate any tax increment...
...Jim Ga-bler, supervisor of multifamily housing at the community-development agency, says that owners of rental apartments used to make money from depreciation allowances as well as from rents...
...There is talk of a new airport, a basketball arena to attract the NBA, and a Saks Fifth Avenue store downtown...
...You've got inner-city housing without much cash flow anyway," Gabler says...
...And the 1986 tax reforms removed the few incentives landlords had to operate low-rent housing without government incentives...
...For the most part, the city has been stalled by the lack of creative subsidizing mechanisms—and the lack of political will...
...But this article is not about Sheila Porchia, not about the south Minneapolis families who live in roach-infested homes, not about the old men who bounce from downtown welfare hotels to shelters and back when their government-assistance checks come in, because such portraits of suffering might divert attention from the policy-makers and developers who have fashioned the acute shortage of affordable, decent housing in Dan Nicolai is the editor of Northern Sun News, a monthly newspaper covering politics and the environment, in Minneapolis...
...In Minneapolis, 704 low-rent units are in buildings with Federally assisted mortgages that could be prepaid within five years...
...I have enough money to move to a slightly better place," says the man, who gives his name only as "Steve," "but a lot of them [Areola tenants] are going to drink up the money, or buy a car...
...The city also came up with a creative funding mechanism for the convention center, which is being paid for by a special tax on Minneapolis hotel revenues...
...These cooperative ventures have succeeded in creating some 300 new single-room units since 1985, have rehabilitated many family units, and have provided dozens of photo opportunities for Twin Cities politicians...
...But mainly the costs are borne by low-income people—the kind of people who, in any city, just don't have the political pull to get their share...
...The owners of one building with 640 units recently announced their intention to prepay Federally insured mortgages in 1989 and 1990, possibly returning the units to market-rate rents...
...But so far Minneapolis has done little to crawl out of it...
...The most common analysis of the problem blames Ronald Reagan and his Administration's cuts in Department of Housing and Urban Development funds...
...So what happened, really, when the Federal Government yanked away the safety net and let responsibility for low-income housing fall in the laps of municipalities...
...Almost everyone seems to accept this explanation, except for some of the people with no place to live...
...Thus the city was left with a problem: The costs of the shortage of low-income housing are borne mainly by low-income people—the kind of people who, in any city, just don't have the political pull to get their share...
...There will always be this kind of development going on because the financial incentive is not the reason we're in it...
...EVICTION NOTICE How City Hall helps Washington push people into the streets BY DAN NICOLAI To write an article about low-income housing in Minneapolis, go to a shelter for the homeless and find someone, preferably a woman with children, preferably white, who has had a hard time paying for housing...
...This trend has put more people out on the street...
...Financially, it is much easier for the city to float $28 million in tax-increment bonds to subsidize the market-rate Laurel Village housing project than to build a tenement, because Laurel Village is expected to "pay for itself through increased property taxes and other revenues...
...last summer, another one or two thousand people slept on the streets or by the river...
...When the Federal Government got out of the housing business at the beginning of the Reagan era, city governments were left in a hole...
...In 1986, the Minneapolis city council considered a resolution that would have called for low-income housing to be replaced one-for-one...
...Even the city's contract with Laurel Village Partners, which calls for replacement of eliminated single-room units, takes money away from possible new development of low-income housing in a sense...
...People are as important as parking ramps, basketball arenas, and convention centers," Nordick said...
...Task forces...
...The city will replace fewer than 300 in the foreseeable future, but that many will be lost again when the YMCA stops renting rooms later this fall...
...when the Federal Government got out of the housing business at the beginning of the Reagan era, city governments were left in a hole...
...Carol Kel-leher, executive director of the nonprofit developer, Powderhorn Residents Group, says a number of owners in her neighborhood have "walked," or defaulted, on mortgages because of increased operating costs and reduced incentives...
...The Alliance of the Streets, a low-income-housing advocacy group, has its office in a church basement in downtown Minneapolis next to the nearly completed convention-center complex...
...And, in terms of new housing for poor people, little or nothing...
...It is clear that the supply of housing that low-income people can afford has declined across the board...
...They're going to be leery as hell about reinvesting in the inner city with tax reform taking away one of the main incentives...
...These bonds, which theoretically represent the difference between past and future property taxes from the "developed" area, will be made up after many years if the project is as successful as expected...
...One of the problems in talking about housing issues," says Frederick Smith of the University of Minnesota Center for Urban and Regional Affairs, "is that we tend to call subsidies to the middle class and upper class by different names than we call aid to low-income people...
...The shortage has also meant higher rents...
...The public investment in Laurel Village is about $12,000 per unit, he says, with the Laurel Village Partners developer paying the rest...
...Paul and the governments of Hennepin and Ramsey counties have also created and funded a number of task forces to rehabilitate housing through partnerships of nonprofit and for-profit developers...
...The legislature has not approved any special taxes to build low-income housing—and the city has not asked it to...
...ASaturday afternoon visit to Nicollet Mall, a street in downtown Minneapolis, shows the way the city is going...
...Sheila Porchia, a black woman who said she came here from Kansas City and lived in a city park until the police put her in a nursing home, had a question...
...The evidence of the past fifteen years suggests that, given the way shiny new Minneapolis is developing, Nordick's ideas plus about three or four hundred bucks a month will get him a place to live...
...It's much easier for journalists to find those case studies than it used to be...
...The businesses on Block E, a traditional downtown hangout for the poor and homeless, have been relocated to make way for a park...
...The convention center is another project which is expected to be self-supporting—that is, it will theoretically bring dollars into the city, which low-rent housing won't do...
...Sympathetic editorials...
...In the end," says Coyle, "we came out with a resolution that stated the city's commitment, where possible, to have a one-for-one commitment where public money is involved...
...The other kind of subsidy, mortgage assistance, often includes a clause allowing landlords to prepay the mortgage in full before the end of its term...
...At a recent rally to protest a proposed change in the Laurel Village contract, Alliance for the Streets member Ron Nor-dick called for a one-for-one single-room unit replacement law...
...The costs of the shortage of such housing are paid by everyone, in the form of shelters for the homeless and Federal and state rental assistance...
...They will show you a chart with two lines on it: one that shows Federal funding to the city for low-income housing going down 75 per cent since 1980 and one with the number of homeless people going up...
...Then go to the Minneapolis Community Development Agency and ask why Minneapolis, like most large U.S...
...That ought to be part of the cost of doing business...
...how to induce developers to build or renovate low-rent housing...
...According to a study by the University of Minnesota Center for Urban and Regional Affairs, about 1,700 of4,300 Minneapolis units with such assistance will expire or come up for contract renewal in the next five years...
...she estimates that 60 per cent of them are paying more than 80 per cent of their income for rent...
...A typical waiting list last year was two to four years long...
...light classical music plays in the enclosures, which the city does not heat in winter...
...Fewer than half of those households receive Federal housing assistance...
...Plans are being made to cover Nicollet Mall with a glass roof, at city expense, to attract more shoppers in the winter...
...The Democratic-Farmer-Labor Party dominates Minneapolis city government, and it, through its finance priorities, is as much to blame for the housing shortage as the Reagan Administration...
...We're asking the city council to look at development the same way you look at a polluter," he says...
...He says flatly that a housing replacement ordinance "is not possible" with the present council...
...And he sounded so sure about it...
...That could be a great opportunity for groups like us," she says, "but we've also got less money from the Federal Government and the city...
...Last spring the council passed an "aggressive-begging" ordinance, making panhandling punishable by a fine of $600 and/or ninety days in jail...
...a study by the National Council of Mayors reports that one in seven residents of Minneapolis lives below the poverty line...
...The best we can do," Jackson says, "is put people in market-rate units and tell them how to get on as many subsidized-housing waiting lists as possible...
...The supply of low-income housing is in sharp decline in Minneapolis: H About 2,000 low-rent single-room-occupancy units (SROs) in downtown Minneapolis have been lost to development since 1973, out of an original supply of more than 5,000...
...A recent report by the Washington, D.C.-based Center on Budget and Policy Priorities estimates that the number of very-low-income renter households in Minneapolis exceeds the number of low-rent units by 110 per cent, some 61,000 units...
Vol. 52 • December 1988 • No. 12
