In her initial public housing press release last week, Lisa McDonald said
her Affordable Housing Trust Fund 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...", and goes on to mention
using CDBG funds (federal block grant money) as part of the plan.
The CDBG funds are currently being used as operating funds for a number of
programs (earlier detailed by C. Becker) in areas of health, finance and
communications- in addition to planning, public works, zoning and
inspections-- all seemingly priority programs since the federal funds have
been attached/diverted to keep them in place.
My question to Lisa (and please, other Mayoral and City Council candidates
should feel free to consider/reply as well)--
How does doubling the City's housing assistance program (from $10 to $20
million annually) fit in with the existing $100 million (approx. current
balance and growing) deficit accounts in the areas of internal services, the
infrastructure gap and the public safety initiative, given the lack of any
identified and consistent workout plan in any of those areas? These are
growing taxpayer liabilities.
In addition the City has a current over-obligation of the CDBG funds to the
tune of $7 million dollars (I hope the feds don't cut the block grant
program before we at least balance it!). Then there's the MCDA plan to
settle the 'Gavidae problem loans' for sixty cents on the dollar; the
increasing vacancy rates in non-TIF downtown commercial areas that will
increasingly place upward pressure on residential property tax rates; the
viability of the near bankrupt MCDA (what's the plan there over the next 5
years and will it involve a property tax increase in some shape or fashion
to fund the MCDA?)?
And of course we need to consider the impact of the MPS and MPL referendums
on residential (owner occ & rental) property taxes as property values
increase at a 5-10% yearly clip (a conservative estimate) and the full force
of the referendums kicks in in a few years, plus library operating fund
shortfalls (current and projected), etc-- which all add to the above
situation. And of course the legislature is still in session, only adding
uncertainty to future municipal budget projections.
Due to all of the above, I expect property taxes will soon begin to sky
rocket in Minneapolis (50% in five years might be considered a ballpark
estimate-- even without funding a new sports facility or two). Rising
property values, coupled with the need to continually raise property taxes
to balance all these current deficits will raise hell with city residents--
especially those existing on low and fixed-incomes. The housing 'problem'
could compound, affecting even more people, as their living expenses rise
faster than incomes.
These are just a few of the budgetary issues on our table here in Mpls. We
need more than a housing plan! I can't imagine how the City will maintain a
triple A bond rating as we move forward, which will only exasperate the
situation. Just what are our priorities in Minneapolis?
Let the debates begin!
Michael Hohmann
13th Ward
http://www2.visi.com/mahco
> -----Original Message-----
> From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED]]On Behalf Of
> List Manager
> Sent: Sunday, May 06, 2001 5:20 PM
> To: Mpls list
> Subject: [Mpls] Lisa McDonald's affordable housing trust fund.
>
snip
re: Davids request to Lisa for clarification about use of CDBG funds in
housing program...
snip
>
> David,
>
> As I indicated in my press release our decision to reallocate resources is
> really a matter of shifting priorities and believing that affordable
> housing is a high priority
>
> I identified CDBG as one of several sources that could be used. Certainly
> it is not my intention to use the whole $16.9 million, just a portion. For
> two years we have been discussing the necessity of moving staff off using
> CDBG for administrative expenses.. I would rather spend those funds on
> capital projects and low income needs which is what they were intended
> for.
>
> Currently funds are used for administrative purposes for the Health
> department, finance, planning and the MCDA. Other funds are used for
> capital. I believe much of CDBG dollars go to not only worthy causes, but
> also to gain political leverage by council members.
> .
> Instead of a buckshot approach to social services funding a
> little here and
> a little there, I think the city should say we're going to take this
> affordable housing issue on and tackle it in a big way. My friends in the
> foundation community tell me that see no organized plan for how the city
> operates on this issue.
>
> As to the issue of staffing, the irony is that planning, zoning and
> inspections generate revenues (because of permits and fees) often greater
> than wages and overhead. So I wouldn't cut there. But I believe there are
> efficiencies that can be achieved in other departments.
>
> Hope this helps.
>
> Lisa
>
>
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