For release Monday, April 30, 2001 Contact: Jason Amundsen 612-644-5247 The McDonald Plan for Affordable Housing Minneapolis has a crisis in affordable housing. Many of the challenges that we face in our city, whether it is the performance of students in our schools, the continued economic well-being of our business community, or the safety and livability of our neighborhoods, are being affected by the critical shortage of affordable housing. To quote a recent Star Tribune story, �the shortage of affordable housing is crippling employers� ability to retain workers, stifling children�s school performance, and forcing families to live in homeless shelters for an average of two months.� The residents of Minneapolis do not want their city to become a community of just rich and poor. We must create housing opportunities for working families -- the secretaries in our downtown offices, the cooks in our cafes, the bus drivers who take our children to school, and the workers in our day care centers. There is currently a lack of leadership by the city to address the shortage of affordable housing. So today I am proposing a comprehensive, fiscally responsible plan for addressing this issue. City leaders will tell you that it is the Federal government�s fault. That�s an excuse used to avoid digging in and solving a tough issue. But while what we get from City Hall are excuses, I�m willing to act. I have developed a plan that is financially feasible and will support our working families� need for housing. As Mayor, I will create an Affordable Housing Trust Fund that will combine funds from multiple sources to double the city�s commitment to affordable housing, to $20 million per year. Under my plan the city would use housing revenue bonds to generate at least $50 million in each of the next five years for the development of affordable housing. My plan does not rely on new taxes. Instead we will set different priorities that will make developing affordable housing one of the City�s top goals. It is important to note here that my plan will not impact the city�s credit rating. The Fund will be used to build 4,000 affordable rental units for families earning less than 30 percent of the Metropolitan Area�s median household income. For a family of four that translates into an annual income of $19,600, or $9.42 an hour for a full-time job. We will develop an additional 4,000 units for home ownership by families earning less than 50 percent of median income. A portion of the Trust Fund will be dedicated to preserving and maintaining existing affordable housing units. Housing revenue bonds are at the heart of this effort. The $250 million in bonds will be repaid at a rate of $20 million a year over the next 30 years from a variety of sources. I want to stress that the repayment burden will not be borne by property taxpayers. These sources for bond repayments include: � $4 million a year in NRP funds for the next four years. These funds are already dedicated to affordable housing. � A gradual shift in the use of our federal Community Development Block Grant (CDBG) funds -- currently $16.9 million a year -- from paying for the city administrative costs to supporting more affordable housing. � Use of Federal Section 8 rent subsidy certificates for home purchases. � Interest earnings on the city�s $40 million Hilton Hotel Trust Fund. � A portion of the tax revenues from downtown tax increment financing districts that will expire beginning in 2010. I believe that once the City has demonstrated real leadership on this issue, we will be able to enlist the business community and foundations to make multi-year commitments to the Affordable Housing Trust Fund. Once we build momentum on this effort, we increase our chances of getting additional help from Hennepin County, the State of Minnesota and the federal government. Contributions from other levels of government will not reduce the city�s efforts, but it will allow us to build more affordable housing for more families. We estimate that the city�s investment leveraged with others� contributions could generate up to $1 billion for affordable housing. Other City Housing Reforms The first thing we must do is conduct a comprehensive inventory of sites suitable for development of affordable housing, then aggressively market these sites. It is a sad comment on the current leadership that the city currently lacks such a basic piece of information. Next, we need to reform the way that the City supports affordable housing. We will develop innovative strategies such as land trusts and cooperative housing that will allow us to keep housing at affordable levels once they are built. Under a land trust program, for instance, the city would retain ownership of the land and would limit the amount of equity homebuyers could gain when reselling the unit. This approach is already being used successfully in other cities to keep the housing affordable beyond the first owner, and it would work in Minneapolis. We will require private developers that receive city financial assistance to reserve 20 percent of their units for households earning less than 50 percent of the Metropolitan median income, and we will extend that requirement to home ownership as well as rental projects. We will provide incentives for landlords to upgrade their properties and keep rents affordable. We will look for ways to cut costs for non-profit and for-profit developers of housing by streamlining our approval and land acquisition processes, and by holding down the cost of building permits and zoning fees. The City of Minneapolis cannot solve the affordable housing shortage by itself. But we can and must be a leader in addressing the housing crisis that is affecting our entire metropolitan area. What I have proposed will meet about 20 percent of the need for affordable housing in our region. Mayor Sharon Sayles Belton says she has been a champion on this issue by going to the state and the federal government for help. While the Mayor�s actions have been well-intentioned, in today�s political climate � the tight budget of the Ventura Administration, and the massive tax cuts being advocated by the President and Congressional leadership � these efforts are unlikely to produce any real relief. We need an end to scattershot approaches and repetitive debates about housing principles. We don�t need more affordable housing principles. We need more affordable housing. Today I�m proposing a comprehensive program that will make a real impact on a serious problem. I ask others who are concerned about this crisis to join me in this discussion. __________________________________________________ Do You Yahoo!? Yahoo! Auctions - buy the things you want at great prices http://auctions.yahoo.com/ _______________________________________________ Minneapolis Issues Forum - Minnesota E-Democracy Post messages to: [EMAIL PROTECTED] Subscribe, Unsubscribe, Digest option, and more: http://e-democracy.org/mpls
