North Minneapolis green homes program slowing, not sinking

A rear entrance to 4700 Bryant Ave. N. in Minneapolis leads to a semi-private living space that makes the home ideal for larger, multi-generational families. The home is part of the city’s Green Homes North program to bring sustainable houses on the North Side. (Staff photo: Bill Klotz)
A program aiming to fill 100 vacant lots in North Minneapolis with new sustainable homes showcased its first multi-generational houses this week, but in its fourth year, the initiative is lagging behind.
Green Homes North launched in 2012 after the foreclosure crisis with strong support from then-Mayor R.T. Rybak. The city set out to build 100 homes over a half-decade, generally priced between $170,000 and $225,000, but on-site complications and shaky funding prospects set back the timeline.
To date, the initiative has funded the development of 56 homes, 24 of which have sold. About half of the 28 still under construction are expected to hit the market soon, but that still leaves more than 40 homes to build — too many to handle in the original five-year window.
As it stands, Minneapolis officials plan to tack another year onto the program and ramp up construction to hit the 100-home goal. It’s a setback compared to the initial framework, but it’s not a sign of trouble, Green Homes North coordinator Cherie Shoquist said.
“The reason we said five years was because we thought it sounded reasonable,” she said. “But there are so many factors that go into it.”
Some houses took longer than expected because of soil issues, for example. In some cases, new rules, like shoring requirements passed by the City Council, inflated budgets and held up development.
Plus, murky funding prospects loom.
The city’s investment has hovered in the $500,000 to $600,000, covering a majority of program funding. The Minnesota Housing Finance Agency, meanwhile, over the years scaled down its original $500,000 contribution, first to $250,000 and then to zero. It withheld funding entirely in the last fundraising cycle.
Financial support from Minnesota Housing, a state agency, dried up in part because of construction delays that obscured the results it needed to see in order to justify continued investment, Shoquist said. The process is also complicated by differences in funding schedules between Minnesota Housing and the city.
“We could be nine months into a contract period between when state funding is awarded and when our developers break ground,” Shoquist said, noting that the agency is wary of that delay.
Green Homes North is waiting to hear back on a request for another $500,000 from Minnesota Housing for next year. A representative for the agency did not respond to a request for comment.
Despite its stretched-out timetable and tapering funding, the program has its bright spots. Mayor Betsy Hodges this week praised its progress in addressing racial and other gaps in homeownership, and for sprucing up long-blighted swaths of the North Side.
“The work to address disparities in our city is not complete if we don’t make progress in the area of housing,” they mayor said.
Most of the homes constructed through the initiative sell within 60 days of listing, according to the city. Demand is strong, even as the housing market in North Minneapolis recovers more slowly than in other corners of the city.
Households that qualify to buy homes through the program must earn at most $99,500 — 115 percent of the area median income, per city rules. Some developers more focused on affordable housing set stricter standards.
The City of Lakes Community Land Trust, a Minneapolis affordable housing advocate that revamps houses, spearheaded the development of the two multigenerational homes — with attached living spaces that can be separated — to answer rising need in the marketplace.
Both homes will go to households that earn 80 percent or less of the area median income. But the narrower pool of prospective buyers hasn’t dampened interest.
“We’ve had lots of interest so far,” land trust program director Staci Horvitz said. “This has been our busiest year.”
Strong interest translates to developers — both private and nonprofits — who have offered to do more than existing Green Homes North funding can support.
The program provides a testing ground for developers considering their own homebuilding pushes on the investment-starved North Side. If a developer is willing to take on intensive reporting requirements, Green Homes North provides a sense of the market appetite for new North Side housing and subsidies to nudge it along.
Combined with strong market interest, developers’ focus on the program keeps it humming despite financing holdups and other challenges.
“Because we’re trying to build as many houses as we possibly can with limited funding,” Shoquist said, “the construction expectations and schedule are doing just fine.”
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