IQ Magazine - March 2010 by Initiative Foundation

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Where others see problems, we see opportunity. When some say,“it can’t,” we imagine what could. While others focus on shock, we produce results. Welcome to a new way of thinking from a new kind of advertising agency. Welcome to RedHouseMedia.

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IQ Magazine

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MARCH 2010

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ABOUT THE COVER: Bruce Nygren | Over the River | 2004, oil on canvas The artwork was provided courtesy of the Family Housing Fund’s Home Sweet Home Again exhibition that focuses on the issues of affordable housing, homelessness and the meaning of home. View the full exhibition at www.fhfund.org/homesweethomeagain

30 OUR MISSION:

Unlock the power of central Minnesota people to build and sustain healthy communities. INITIATIVE FOUNDATION GOALS:

35 40

F E AT U R E S 20

–Strengthen Economic Opportunity –Preserve Key Places and Natural Resources –Support Children, Youth, and Families –Build Organizational Effectiveness –Encourage the Spirit of Giving

D E PA R T M E N T S 4

Kathy’s Note Unlocked Doors

IQ Points Your Two-Minute Digest

Housing Mythology Let’s Renovate the Conventional Wisdom . . .

Mobile Makeover Are Manufactured Communities an Overlooked Housing Solution?

The Home Front Why Minnesota Veterans Come Home to Homelessness

Afford Ability Sweat-Equity Powers Habitat for Humanity

Senior Portrait When it Comes to Housing, Boomers Picture Themselves Staying Put

Brainiac An IQ&A with Warren Hanson

Dreams of Home The Gravity of Minnesota’s Affordable Housing Crisis

Second Storm

Can We Solve Homelessness?

New Surge of Foreclosures Looms in 2010

In Minnesota, Growing Numbers Want to Know

Faces of Homelessness

NIMBY

A New Shade of Affordable

This Old House

Chasing the American Dream

Greater Minnesota Housing Fund Photography Exhibit

What’s Behind the “Not In My Back Yard” Reaction to Affordable Housing?

Green & Healthy Homes Cut Costs, Not Corners

Affordable Revolution Begins with Neighborhood Revivals

Three Paths to Affordable Housing

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Kathy’s Note

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unlocked doors Dear Friends, When I moved from California to Minnesota in 1976, my culture shock included getting used to keys. Specifically, how people had no regard for them. No one locked anything. There was no deadbolt on my in-laws’ door. My husband, Neal, would leave his keys in a running car if it was a “mite bit chilly.” In Los Angeles we were open, but not that kind of open. As a newlywed, I had to adjust to cousins and farmhands walking into our mobile home without knocking. “Well, hello there,” I’d say, wrapping my bathrobe a little tighter. “Just lookin’ for Neal,” they’d answer back while searching my fridge for coffee creamer. One Sunday afternoon, we feasted on smoked turkey legs at Pillager’s Constitution Days festival. When the fire whistle blew, someone told us that our hog barn was on fire. We raced back to our farm to find the volunteer fire department and a large number of family, neighbors and friends—many of whom I’d met unexpectedly in my own living room—who came to see how they could help. That day I came to appreciate my new home. The community had accepted me, they cared about our family, and they were there for us. In Minnesota today, people cling to the dream of home but find they can’t pay for one. Our challenge is unlocking the doors to affordable housing in order to build and sustain healthy communities. Having a safe, decent and affordable home to buy or rent is a right, and it’s an achievable goal. Permanent solutions are within our reach. In this issue of IQ, we examine the recession-induced housing crisis from foreclosures to homelessness. To reflect reality, not all of our articles have a happy ending. We thank each featured family for having the courage to share their stories with Minnesota leaders. Amid their own crisis, they hope to unlock doors for themselves and for others. Working together with our publishing partners—the Greater Minnesota Housing Fund, Minnesota Housing Finance Agency and USDA Rural Development—we do, too. Enjoy the magazine!

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4 Initiative Quarterly Magazine

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Kathy Gaalswyk, President Initiative Foundation

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Initiative Quarterly Magazine www.IQmag.org

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Bruce Nygren

Intelligence H Housing is affordable when it requires no more than 30 percent of a family’s monthly income. H

Studies project a 2010 shortfall of 22,000 units of affordable housing in the Twin Cities and 10,600 units in Greater Minnesota.

23,000 Minnesota homes were foreclosed in 2009. Persistent unemployment and adjustable rate mortgages may cause even more foreclosures in 2010.

Affordable housing agencies often battle the NIMBY (Not in My Backyard) response to new developments.

Energy-efficient, green housing is key to affordability, because it reduces utility and maintenance costs.

“ Quotations” “In the richest country in the world, why is it that people have to live in their cars? It’s a basic human right that everyone should have a safe, decent and affordable place that they can call home.” – Tonja Orr Minnesota Housing Finance Agency “We need to make sure our existing multi-family facilities are safe and viable places to live. Our existing portfolio of multi-family housing is a tremendous asset. It will only remain an asset if we maintain it and stay on top of preserving units that need to be preserved.” – Colleen Landkamer USDA Rural Development

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“We keep hearing from consumers who face corporate bureaucracies in which paperwork gets lost and calls aren’t returned . . . We need to cut through the red tape and get some help to people.” – Lori Swanson Minnesota Attorney General “Homeownership for everyone isn’t the goal. It’s nice to think that we could all have a yard, a front porch and a picket fence, but not everyone has the means or the desire to maintain it.” – Kathy Gaalswyk Initiative Foundation

Revitalized core neighborhoods and manufactured home parks are untapped housing sources in Minnesota.

At least 9,200 people are homeless in Minnesota each night. 28 percent of homeless adults are employed.

“The chance to live in safe, decent and affordable homes provides families and communities with stability and opportunities for success. This is exactly why so many private, nonprofit and public agencies work to support and preserve housing options for all Minnesotans.”

–Warren Hanson Greater Minnesota Housing Fund

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Minnesota Housing finances and advances affordable housing opportunities for low and moderate income Minnesotans to enhance quality of life and foster strong communities.

Partnering to change lives and strengthen communities for more than 30 years. www.mnhousing.gov

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Housing Mythology Let’s Renovate the Conventional Wisdom… By Dawn Zimmerman | Illustration by Chris McAllister

> Myth: Affordable housing cheapens neighborhoods. > Reality-Check: Today’s affordable housing reflects the best in architectural design and construction quality. “People have this image of the worst-looking house and think it’s some sort of substandard, subsidized housing,” says Rosemary Dolata, project manager for Aeon, a nonprofit developer of high-quality affordable housing with 1,760 units in the Twin Cities. She urges people to dismiss the images of poorly designed affordable housing built in the 1950s and 60s. Maxfield Research, a private real estate research firm, studied home sales in neighborhoods in 11 Twin Cities suburbs and found that prices of homes located near affordable housing maintained the same or higher values in 98 percent of the cases. These Minnesota results are consistent with a series of studies conducted nationwide over the last 20 years. > Myth: If you’re homeless, you’re lazy. > Reality-Check: If you’re underemployed, you could be homeless. A 2006 study by Wilder Research showed that 28 percent of all homeless adults were employed, and 12 percent were working full-time. Of homeless parents, 33 percent were working. Sixty-one percent of employed homeless adults say they could afford to pay $500 a month in rent, but a one- or two-bedroom apartment was still out of reach. For those not working, the most frequent barrier to employment was lack of transportation. A quarter of rural homeless and a third of urban homeless report that they could not keep their last housing because they lost their job or had their hours cut. > Myth: There are no homeless people in my community. > Reality-Check: Homeless families and individuals live in every region of Minnesota, including rural areas. At least 9,200 people are homeless in Minnesota each night, according the 2006 Wilder Research homeless count. About one-third of them live in greater Minnesota. Minnesota is the only state in the nation that routinely collects information about rural homelessness. In rural communities, homeless people are less likely to be in shelters or sleeping 8 Initiative Quarterly Magazine

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outdoors, and more likely to be in temporary arrangements with family or friends, in a church or abandoned building, or living in a car. > Myth: Affordable housing is a revolving door for flighty residents. > Reality-Check: Like your current neighbors, they tend to stick around for a while. “Individuals who buy a home through our homeownership program often stay seven or eight years, similar to other homeowners who buy their first homes without our financing,” Hanson said. Ripley Gardens, a mixed housing development in Minneapolis, had a 2009 turnover rate of 35 percent in its 52 rental and 8 home ownership units. “There are people who moved in the day we opened and are there today,” Dolata said. A U.S. Department of Housing and Urban Development study showed an annual turnover rate of less than 10 percent on some affordable rental projects. Affordable housing residents invest in their neighborhood and community just as much as other residents and sometimes more, added Janne Flisrand, coordinator of Minnesota Green Communities. > Myth: Blame the homeowners for the foreclosure crisis. > Reality-Check: Blame unemployment, upside-down mortgages, and a few unscrupulous lenders. “Since 2008, homes have lost 20 percent or more of their value in many places, which put many hard-working families upside-down on their brand-new mortgages,” Hanson said. “For every borrower that spent beyond their means, there are probably a hundred more who were victims of economic circumstances beyond their control.” According to Hanson, it was predatory lending to naïve borrowers that truly tipped the scales. Economic recession and high unemployment meant many families couldn’t refinance or sell, which forced their homes into foreclosure. IQ

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Chic Peek: A look inside Sartell’s Evergreen Village changes notions of manufactured homes.

Mobile Makeover

Are Manufactured Communities an Overlooked Housing Solution?

By Lawrence Schumacher | Photograph by John Linn

he negative reputation of the trashy trailer park— quite possibly the last place many people could envision themselves living— may be obscuring one of the largest potential solutions to the affordable housing shortage in Minnesota. With 950 Minnesota parks housing 50,000 families, manufactured home communities are among the untapped sources of affordable housing in the state, said Warren Kramer, executive director of the Northcountry Cooperative Foundation. Today’s newly manufactured homes are solid, spacious, and relatively inexpensive due to their efficient construction in controlled manufacturing facilities. They are far superior to the older, wheeled trailers and are equal to most traditional homes in quality, Kramer said. “If I blindfolded you and showed you the interior of one of these homes,” said Warren Hanson, president and CEO of the Greater Minnesota Housing Fund (GMHF), “you’d be hard-pressed to tell that it was manufactured.” Newer manufactured homes cost an average of $40,000 to $50,000, which translates to mortgages as low as $400 a month. Add lot rents around $250 per month and the affordability factor is clear, Hanson added. GMHF is working with the Northcountry Cooperative Foundation, Minnesota Housing Finance Agency, and The McKnight Foundation on a pilot project to demonstrate that manufactured homes in resident-owned communities are a viable alternative to traditional ownership. But the public stigma haunts many parks, due to aging housing stock and declining infrastructure, he said. As several parks have been sold off, closed and redeveloped during the last decade due to rising property values, residents know that their future is not entirely in their hands. “Resident ownership changes that equation,” Kramer added. “When they own the land as well as the home, they get to make the decisions about policy, about how the park is run, about fees and about who gets to live there.” In 2007, Connie Mere and two dozen other residents bought the 10 Initiative Quarterly Magazine

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Greenwood Mobile Home Park in Moorhead and renamed it Bennett Park Cooperative. Now, she’s moving into one of the 20 new manufactured homes cooperative members purchased last year from the FEMA to update the community’s stock of affordable housing. “We’ve got homes on our property that are abandoned and we’re trying to move them out,” said Mere, the cooperative board secretary and a longtime resident. "We’re trying to bring in more people, more families.” Bennett Park isn’t the first manufactured home community to become a resident-owned cooperative, but it may be a sign of things to come. The Minnesota Housing Finance Agency has committed $12 million to help the residents of four to eight communities purchase and convert their parks into cooperatives. In central Minnesota, the Initiative Foundation has invested several grants to organize cooperatives and educate others about the benefits of manufactured home communities. “When you have a stake in the future of your community, when you’re the land owner and also the landlord, these parks can become affordable places to live and raise a family,” said Don Hickman, a foundation senior program manager. “Cooperatives ensure the profit is being recycled back into the park for improvements.” The idea is not a bad one, but there’s a reason only four parks out of 950 are resident-owned, said Mike Ivers, a Grand Rapids resident who manages seven park communities in which he is also a partial owner. “If you have a board that’s capable of managing the community, I have no problems with it,” he said. “But it takes a lot of work and a lot of money.” That’s why Northcountry Cooperative Foundation’s provides support to local boards. The foundation helps to line up property management services, secure competitive financing, and ensure that reserves are funded. Bennett Park members know how difficult it is to make cooperative management work and how much dedication park management requires, Mere added, but in the end, it’s worth it. “We make the decisions,” she said. IQ

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The Home Front Why Minnesota Veterans Come Home to Homelessness

he voice on the line is frantic, panicked and afraid. Durbin Keeney calmly gets dressed and drives to the address the family member gave. Inside the guy is in bad shape—frustrated, distraught and at the end of his rope. “I’ve taken many a gun out of a veteran’s hand,” Keeney recalls. “The calls come at any time, and I’m here—day or night, on holidays— doesn’t matter. If a veteran needs help with moving her life forward, then we’re here to support her.” Keeney serves in Duluth as a regional director for the Minnesota Assistance Council for Veterans, known as MAC-V. His nonprofit organization deals with tough issues veterans face when they return home from deployment or service abroad. “It’s all about feeling like they don’t fit in,” explains Keeney, a Vietnam veteran. “And it’s this ‘not fitting in’ that often leads to problems with employment and housing.” That was the experience for Thomas Anderson, 57, of Duluth. A Vietnam veteran, he served in the Special Forces as a Navy Seal, including a six-month in-country tour. “When I got back from ‘Nam, I pretty much got booted to the street,” Anderson recalled. Constant anxiety and feelings of isolation led to years of drinking and bouts of trouble with the law. Years later, he found himself staying in a friend’s trailer without running water on the North Shore. That’s when he heard a radio ad for MAC-V. He drove to Duluth and was able to get into transitional housing. They also assisted him in securing a disability status with the VA and connected him to counselors. Three years later, he’s now a daily volunteer at MAC-V and helps other vets find the resources they need to secure housing and employment. Housing is a top priority for MAC-V. “There is a housing crunch in Minnesota, period,” says Keeney. “Veterans raised their right hand and are willing to die for our country, but they’re not willing to become homeless.”

John Linn

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Brothers in Arms: MAC-V Director Durbin Keeney counsels veterans like Thomas Anderson as they readjust to civilian life. In Minnesota, veterans comprise about 15 percent of the population, but 25 percent of all homeless.

IQmag.org

Scott Streble

By Britta Reque-Dragicevic

According to MAC-V, veterans make up roughly 15 percent of Minnesota’s population. When it comes to not being able to find housing, veterans account for 13 percent of the state’s homeless adult population and 25 percent of the homeless adult men, as reported in a study by Wilder Research in 2007. “Vets often give up their housing when they’re deployed,” Keeney says. “When he gets back, his old job seems boring or meaningless compared to combat. Then you’ve got relationships, school, peers—in all of these the veteran feels out of place. Without a steady paycheck, housing is very, very tough.”

“Given what they have sacrificed, one should never hear the word ‘veteran’ and ‘homeless’ in the same sentence.” –DURBIN KEENEY

Much of MAC-V’s work is helping veterans who are ready to “move their lives forward” by getting the support and resources they need to deal with Post Traumatic Stress Disorder, substance abuse, emotional issues and employment before they secure housing. “The first person a veteran should contact is her county veteran services officer or tribal veteran services officer,” Keeney said. Community, business leaders and landlords can also take action by being supportive of family members who are working while a loved one is deployed. While many people believe that the Veterans Affairs department takes care of all veterans’ needs, the National Coalition for Homeless Veterans (NCHV) estimates that VA programs only reach about 20 percent of homeless veterans. “Don’t give up,” Anderson encourages other vets. “Do what you need to do on the inside to make it happen, and just don’t give up.” For more information, visit Minnesota Veterans Affairs at www.minnesotaveteran.org, or the Minnesota Assistance Council for Veterans at www.mac-v.org. IQ

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Afford Ability Sweat-Equity Powers Habitat for Humanity By Sarah Colburn | Photograph by John Linn

Burned Out: An Elk River apartment fire led Pamela Jenson to Habitat for Humanity.

ight after night, Pamela Jenson fell asleep listening to her twins’ lullaby music. She lay inches from the toddlers, their three beds crammed side-by-side in the small apartment bedroom. Her teenage son and daughter slumbered down the narrow hallway. Jenson thought about ways to make life better, about how this place was an upgrade over the last one where she slept in a closet. The morning of September 20th, 2009, everything changed. Jenson stepped out of the shower and heard screaming in the hallway. Moments later, she and her four children were outside watching as flames violently coursed through the Elk River apartment building. Jenson went numb. “You’re a mom, you have to stay strong for your kids and tell them it’s going to be all right,” Jenson said. It’s people just like Pamela Jenson who’ve had their hopes answered by Habitat for Humanity. Through the power of community volunteers, Habitat partners with families to build simple, safe and affordable housing. Since 1997, Habitat volunteers have built more than 1,500 homes in Minnesota. The agency has 35 independent branches statewide and receives assistance from more than 30,000 volunteers each year. In central Minnesota, the agency has moved 54 families into affordable homes since 1990. Last year, 779 volunteers clocked more than 11,000 service hours. The homes go to low-income families living in substandard housing who must contribute 200 hours of sweat equity to their home. They are also responsible for paying the mortgage and utilities. Central Minnesota Executive Director Bruce Johnson anticipates that eight of the ten families that Habitat will assist in 2010 will assume ownership of rehabilitated foreclosures. “It has really altered our ground-up build model and flipped it on its ear,” he said. Habitat received federal funds to purchase the foreclosed homes and additional funds through St. Cloud’s Neighborhood Stabilization Program allocation to renovate them. The homes go to people who need them, vacant properties are filled, and builders are back to work, Johnson said. “Without the federal dollars and opportunities through foreclosures we would have seen a decline in production by two homes a 14 Initiative Quarterly Magazine

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year,” Johnson said. “But we’re still having a hard time finding resources to do what we’ve been doing.” Traditionally, the building industry has supplied 20 percent of the labor and materials for each build. With the economy that hasn’t been an option, Johnson said. In 2010, Central Minnesota Habitat plans to launch a new pilot program, A Brush with Kindness, to help income-eligible families make repairs to their existing homes. Over time the beneficiaries would help pay back the cost of the materials. The agency also plans to open a St. Cloud area home improvement store to sell discount building materials from demolition projects and extras from builders. Johnson hopes the store will generate income for future builds.

“One of the most effective ways to help someone out of poverty is to give them an opportunity to build equity in their own home.” According to Don Hickman, Initiative Foundation senior program manager, the foundation has invested $68,000 in grants to Habitat for Humanity because the agency maximizes volunteers and helps people to help themselves, which creates a sense of ownership, responsibility and community service. “One of the most effective ways to help someone out of poverty is to give them an opportunity to build equity in their own home,” Hickman said. “People have to show they’re ready for that responsibility and are willing to work for it. Habitat does a great job selecting families, and they’re definitely part of the foreclosure solution.” Pamela Jenson first learned about Habitat when she went to an informational meeting to volunteer, planning to give back to the city that supported them after the fire. She left with forms to apply for a Habitat home. Six weeks later she was approved for a new home, which she and her kids helped build themselves. “I walk in here and I can’t believe this is our house,” Jenson said. “It’s too amazing.” IQ

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Senior Portrait When it Comes to Housing, Boomers Picture Themselves Staying Put. By Liz Potasek | Illustration by Chris McAllister

“We built this home with the idea that ‘this is our last move’ in mind,” Lynne said. On the surface, their home seems similar to others in their neighborhood, but the difference is in the details. There are no transition points in the flooring, no steps up to the When they were young, they grew out their hair and listened to front door, and no barriers from the bathroom floor to the shower. All loud music. They’ve been on the cutting edge of rapid changes in techdoorways are at least 36 inches wide, and the stairway linking the nology, family structure and work environments. Now they’re an active upstairs to the downstairs has a tread that is safer and wide enough for a generation of grandparents and emerging retirees, and they don’t plan to wheel chair lift, should they ever need it. go gently into that good night. Don’t call them seniors, and don’t plan on Switches are lower and electrical outlets are higher, so they can be shipping them off to a retirement community. reached from a sitting position. The couple also chose windows, switchInstead, many baby boomers—who will begin earning their official es, door knobs and cabinet pulls that are easy to use. status as senior citizens in 2011—plan to stay right where they are. Their Advances in technology are also making it easier for seniors to age decisions will transform the concept and cost at home. Home healthcare companies can of senior housing. monitor patients remotely using devices that The trend to grow old at home has report on vital signs and wireless sensor netMany Americans prefer to already begun with recent retirees, and it’s works that can detect unusual movements or expected to grow as the baby boomers age. “age in place” within their own hard falls, says Diane Sprague, director of the According to the Aging in Place Initiative, Lifetime Home Project. fewer than 5 percent of the 65 and over popu- neighborhoods and communities. In September, DHS awarded $2.4 millation reside in nursing homes. Instead, many lion in grants to community organizations to Americans prefer to “age in place” within their help seniors live independently in their own own neighborhoods and communities. homes. The state has also passed legislation “People are happier when they stay in their own home,” said establishing a program for “communities for a lifetime,” with the intent Annette Sandler, the director of aging and disabilities services at the of encouraging communities to provide resources for people who would Jewish Family and Children’s Services of Minneapolis and a co-chair of like to age at home. the Vital Aging Network. Senior housing is big business in Minnesota, with several developAn aging population of baby boomers will create a huge population ers and health care systems building new assisted living facilities each shift in Minnesota. According to the Minnesota Board on Aging, the year. However, the desire to affordably age in place remains a priority. population over age 65 is expected to grow 40 percent by 2020. “That’s why today’s decisions around community and neighborhood “The programs and resources that have been offered in the past for design are critical,” said Dan Frank, Initiative Foundation program managing aren’t going to be workable when we have double the number of ager who helps central Minnesota communities plan for future growth seniors,” said LaRhae Knatterud, director of aging transformations for and stay ahead of trends. As part of the foundation’s Healthy the Minnesota Department of Human Services (DHS). Communities Partnership, Frank is currently working with Todd County Some baby boomers are starting to get proactive. When Lynne and to plan for its rapidly aging communities. Dave Wagner, both age 56, began designing their new home in Waconia “We’ll all be seniors someday, and we’ll need easy access to shopseveral years ago, they wanted to accommodate their current lifestyle ping, healthcare and activities,” he added. “It’s cheaper to retrofit the while planning for future needs. homes that already exist.” IQ ith all respect to the greatest generation, baby boomers have never wanted to live like their parents.

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My world is explaining meteorological concepts to television viewers. When I’m not weather forecasting on KARE 11, I’m hosting Simply Science segments and answering science questions on kare11.com. I’ve perfected event promotion using social media, urging thousands of Facebook fans and Twitter followers to attend charitable events. At St. Cloud State I became a meteorologist. Now my world has grown to include fundraising for the Aliveness Project, Smile Network International and the Shawn Silvera Foundation.

My world is forecasting and fundraising. Sven Sundgaard ’03 Meteorology Minneapolis, Minn.

My world is all about helping people.

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PA I D A D V E RT I S E M E N T

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If you live in the small town of Isanti, Minnesota and visit the city hall, you probably know Anna Vick. She works there full-time as a utility clerk and receptionist. She has lived in town since 1992. What you may not know is that for the past four and a half years, she shared a bedroom with her two children while she hoped to save enough to buy a modest home.

Meet the new face of affordable housing.

By Sarah Colburn | Illustration by Bruce Nygren | Photography by John Linn

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Surprising Symbol: Proud to be a homeowner, Anna Vick represents a new generation of struggling middle-income professionals who don’t fit the affordable housing stereotype.

Anna represents the thousands of Minnesotans who have a “good job” but still struggle to afford a home. Minnesota’s housing agencies define affordability as requiring no more than 30 percent of a family’s monthly income. In 2008, more than half of all Minnesotans with incomes of $50,000 or less were spending more than they could afford on housing, often skimping on other necessities to stay housed. After she divorced, Vick expected to rent an apartment for a year. Four years later, she still couldn’t save enough for a mortgage down-payment. Not much was left after she paid monthly expenses and $684 in rent. She earns $15 per hour, or about $31,000 per year. “For many, it’s down to choosing whether to pay the mortgage payment, buy food, get medical attention, or make car repairs,” said Warren Hanson, president and CEO of the Greater Minnesota Housing Fund. “It’s easy to see how someone would put off one of these costs to pay for the other. They are all necessities.”

Forces of Foreclosure Hanson reported that about one in every 14 Minnesota homeowners is behind at least one house payment, and one in every 30 Minnesota homes have been foreclosed. 22 Initiative Quarterly Magazine

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“When we look back years from now, housing will clearly be the defining issue of our time.” –Warren Hanson “That is an astounding rate of foreclosure, and the crisis is hurting home values across whole communities,” he said. More foreclosures are expected in 2010 as high unemployment rates cause more families to miss payments. Thousands of adjustable rate mortgages (ARMS) will also reset or balloon in 2010 and 2011, Hanson added. In 2009 alone, lenders foreclosed on 23,000 homes in Minnesota, according to a report from the Minnesota Home Ownership Center produced by HousingLink. “When we look back years from now, housing will clearly be the defining issue of our time,” he said. “These hardships affect the quality of life for every one of us.” Stephanie Klinzing, mayor of Elk River, has seen the impact of the foreclosure crisis in her community. The city was home to enough foreclosures to qualify for federal help. C O N T I N U E D O N PA G E 4 8 MARCH 2010

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Source: HousingLink

Minnesotaâ&#x20AC;&#x2122;s 2009 Foreclosures: To date, the recession-induced foreclosure crisis has impacted about one in thirty households.

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BY LIZ POTASEK | PHOTOGRAPHY BY JOHN LINN

No natural disaster has claimed more Minnesota homes than the foreclosure crisis. There is hope on the horizon, but it’s not over yet. After reading about declining foreclosure rates in 2009, it’s tempting to be relieved. But those numbers don’t signal the end. Most experts predict an increase in foreclosure rates in 2010, which means next year’s map might be painted in much darker colors. “There are some dark clouds on the horizon, and we’ve got to be watching them,” says John Patterson, director of research and evaluation at Minnesota Housing Finance Agency. By now we’re all too familiar with the path that led us here: Mortgage brokers issued risky loans. When the risky loans went into default, the banks started hurting. When banks started hurting, credit dried up. When credit dried up, consumers stopped buying and businesses couldn’t get capital. Mass lay-offs ensued. In 2009, approximately 23,000 Minnesota homes were foreclosed even though foreclosure rates dipped by 12 percent from their 2008 levels. Since 2005, more than 88,000 Minnesota homes have been foreclosed, according to Housing Link, which tracks data on sheriff ’s sales.

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Besides the continuing rate of high unemployment and underemployment, several indicators point to a probability of more foreclosures in 2010. The first wave of home foreclosures occurred when subprime mortgage rates were reset, resulting in higher monthly payments for homeowners. According to the Greater Minnesota Housing Fund, more “prime” borrowers are expected to fall behind on mortgage payments due to long-term unemployment. Many homeowners are also “underwater,” industry jargon for homeowners owing more on the house than it’s worth. When a homeowner is underwater, banks are typically less likely to offer refinancing options or adjustments on mortgages.

Lender calls and sends letter(s) to homeowner.

As the foreclosure epidemic grows, there’s a new push to keep homeowners in their homes. In August 2008, Minnesota passed a law that seeks to connect at-risk homeowners with foreclosure prevention resources available statewide. It requires that lenders notify approved foreclosure counseling agencies when they send pre-foreclosure notices to homeowners. In central Minnesota, Lutheran Social Services (LSS) Financial Counseling is the state-designated financial counseling agency. In 2009, LSS received 7,789 foreclosure notices for Benton, Chisago, Isanti, Kanabec, Mille Lacs, Morrison, Pine, Sherburne and Stearns counties, and they sent packets of information encouraging homeowners to seek

Collections department continues calls and letters.

30-day default letter sent to homeowner. Source: Minnesota Home Ownership Center

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financial counseling. About 1,600 families responded. To meet the growing demand, LSS hired 14 additional staff members across the state to serve as homeowner advocates. Counselors also help clients talk to their banks, develop budgets and avoid predatory scams. “All indications, especially deepening unemployment, point to increases in foreclosures throughout 2010,” said Ed Nelson, communications director with the Minnesota Homeownership Center. “To keep pace, the number of foreclosure prevention counselors in Minnesota has more than tripled over the past two years.” The Minnesota Home Ownership Center, www.hocmn.org, is the primary statewide contact for information about

Collections efforts continue.

Account forwarded to foreclosing attorney.

Transfer to foreclosure department.

Legal fees accrue.

‘Notice of Intent to Foreclose’ sent to homeowner.

Attorney sends notice to homeowner.

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homeownership and foreclosure prevention. It provides referrals to local counselors to help homeowners avoid foreclosure whenever possible. In central Minnesota, Lutheran Social Services counselors can be reached directly by calling (888) 577-2227. “We keep hearing from consumers who face corporate bureaucracies in which paperwork gets lost and calls aren’t returned, or where banks claim their hands are tied because the loan has been sliced up and sold on Wall Street,” Minnesota Attorney General Lori Swanson said. “We need to cut through the red tape and get some help to people.” Behind every Minnesota foreclosure is a personal story of a person or family that fights to save their greatest financial asset. Some win. Others move on.

Katherine & Clayton Manning, Melrose The Mannings never thought they would be poster children for the foreclosure crisis. Five years ago, Katherine and Clayton moved from Wisconsin to Melrose, Minn. to be close to elderly parents. They found a home with an unfinished basement that Clayton, who was self-employed in the construction industry, could convert into additional bedrooms for their eight children. The Mannings’ downward spiral began in 2008, when Clayton’s work seem to dry up overnight. He gave up his business to go to work for a local construction company, bringing in far lower wages

than what was required to pay the bills. Katherine tried to refinance their mortgage, but bank after bank declined the application based on the couple’s reduced income and lack of home equity. When payments went up on their adjustable rate mortgage, they thought they might sell the house in a gridlocked market. Realtors said the house was too expensive. The family kept a tight budget, reduced every possible expense and charged the balance on credit cards. After 20 years as a stay-at-home mom, Katherine could not find a job. She kept calling the mortgage company, looking for any possible option to reduce their home payments. The company told her she would only be eligible for assistance if she

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Foreclosing attorney schedules Sheriff’s Sale date.

Sheriff’s Sale date published for six consecutive weeks.

Occupant served with notice of Sheriff’s Sale. (Four weeks before sale.)

Sheriff’s Sale occurs. (Deadline to bring mortgage current.)

6 month redemption period immediately follows Sheriff’s Sale. (Shortened to 5 weeks if sale was postponed by homeowner). Homeowner retains right to occupy house and payoff entire Sheriff Sale amount, including fees. Must pay amount or vacate house by end of redemption period or face eviction. MARCH 2010

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Lisa Ronnquist lived on the streets for most of her 54 years, separated from her family and her Ojibwe people. Fellow homeless souls became her guardians and alcohol her refuge.

That changed two years ago when Lisa moved into the San Marco Apartments in Duluth, Minnesota. But it wasn’t easy for her to make the transition. “She had a struggle,” said Lori Reilly, San Marco site director. “She was looking for ways to make it fail.” Laura Kadwell, Minnesota Director for Ending LongTerm Homelessness, said the stereotypes of men sleeping under bridges are being replaced by women like Ronnquist and families who have lost their homes due to job loss, foreclosure or domestic abuse. “Shelters are full to overflowing everywhere in the state,” said Kadwell. “In the fall, family homelessness usually goes down because families find a place to live so kids can go to school. It didn’t go down last fall. It has not been following the usual up-anddown trends.” The recession is stressing families, but it is also stressing the state’s ability to fund programs like Heading Home Minnesota. Enacted in 2004, the program represents Minnesota’s 10-year plan to end homelessness. Through 2006, the project was ahead of schedule, having provided almost 1,100 additional housing opportunities. The plan emphasizes preventing and breaking the cycle of homelessness. When it can’t be prevented, cities turn to places like San Marco Apartments. San Marco adopted the “housing first” approach to homelessness, which prioritizes immediate housing above all other needs. Housing agencies across the state agree that the solution to chronic homelessness is investing in supportive housing that includes on-site counseling, medical, and self-sufficiency services. Several studies suggest that such housing is less expensive than public assistance and interventions. “This is not a sober building,” said Rick Klun, executive director of Center City Housing Corporation in Duluth. “We take people where they’re at. We are not a treatment program—we are a housing program.” CONTINUED ON PAGE 56

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Faces of Homelessness in Greater Minnesota Images of living without a place to call home

1 Fred, a homeless Vietnam veteran, seen here holding a photo that a Time-Life photographer took of him in Vietnam, is temporarily housed in a homeless shelter in Duluth. 2 Chuck, a homeless veteran, is recovering at the Veterans Administration Medical Center (VAMC) in St. Cloud. 3 Nick, a veteran of the Iraq War, lives in an abandoned school bus on the edge of a city park in Freeborn County. 4 Yadira and her two-year-old granddaughter are precariously housed in an aging and deteriorating mobile home, with five other family members. 5 Stella and her children share a family room in a homeless shelter in Moorhead. 6 The daughter of John and Jessica, both under-employed Iraq War veterans, face an unknown housing future similar to a growing number of Minnesota families facing the threat of job loss and/or foreclosure. Photo: Cathy ten Broeke

Photo: Scott Streble

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Photo: Stormi Greener

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Photo: Stormi Greener

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Combating

NIMBY-ism

ears of planning went into selecting Virginia, Minnesota, as the location for a supportive housing project to serve homeless young people.

NIMBY—the “not in my backyard” reaction to many affordable housing projects—is often rooted in assumptions and false information. “The typical NIMBY is based on all kinds of stereotypes about who lives in affordable housing, how they behave, and how affordable housing is run— stereotypes that are wildly inaccurate,” said Jack Cann, senior staff attorney with Housing Preservation Project and the veteran of many NIMBY confrontations. He said that the most effective antidote is a mixture of facts, transparency, and time to get used to the idea. What is affordable housing?

Dana Hiltunen, housing services director for the Arrowhead Economic Opportunity Agency’s (AEOA) proposed Youth Foyer, said a collaboration of area service agencies had long identified the need. The Range Mental Health Center served between 40-100 homeless youth per year in northern St. Louis County – unaccompanied youth and young adults who sleep on the streets, in cars, or in other substandard housing. By early 2006, the group received predevelopment funding and approval for their two-story 15-unit building from the Virginia City Council. All went smoothly until the council moved the project from one city-owned site to another—without notifying neighboring residents. “From the beginning, we wanted neighborhood involvement,” said Hiltunen. At a public meeting “we had handouts for people with information on what the Foyer was, what it would look like, and who we would serve.”

According to the Metropolitan Council, “Housing is affordable when a family with a moderate or low income pays no more than 30-40 percent of its monthly income for housing.” Affordable housing is core to a strong economy and a healthy region. Who lives in it? Typically, affordable housing is built for people who earn up to up to 50 percent of an area’s median income. A 2007 report by the City of Brooklyn Park included the annual income of a school bus driver ($29,500) or a new Osseo school district teacher ($34,400). Will my property value decline? Probably not. Industry research, including a study conducted throughout the Twin Cities, showed no adverse effect on the values of properties near affordable housing projects. According to the Maxfield Research study, area homes displayed similar or stronger market performance than comparable homes after the affordable properties were built. What’s good about it?

By Tenlee Lund Illustration by Chris McAllister Photography by John Linn

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Affordable housing developers must submit to strict guidelines before and after their funding and plans are approved. John Duffy, president of Duffy Development Company, faces annual audits to ensure compliance. The state requires him to maintain a minimum maintenance reserve, and his company manages its developments to be attractive to tenants.

Sources: City of Brooklyn Park, Housing Preservation Project, Metropolitan Council, Duffy Development Company

One petition almost tore apart the project— and the community.

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“The stereotypes that we run into often are that these are lazy people, usually minorities, who aren’t working and will just be hanging around.”

Jodi nelson MICAH Executive Director

The neighbors voiced several concerns. “They were worried about having younger people in the neighborhood all in one apartment building. Twenty-four-seven oversight was another huge issue.” Hiltunen said her agency worked to address neighborhood concerns while still meeting the needs of their clientele. They agreed to provide 24-hour on-site supervision and collaborated on house rules. But some residents just didn’t want the project on that site. “Anywhere but here,” said Hiltunen, “and there was nothing we could do about that.” The project became an issue in the 2006 city council election. As AEOA was requesting a zoning change, a neighborhood petition was presented to the council asking that the property be rezoned as parkland. In response, the council rescinded AEOA’s option agreement. AEOA’s board decided to fight. “It was a difficult decision to sue the community that you live and work in, but we had to fight for our clients. We felt we had a legally binding agreement, and we had over $1 million in low-income housing tax credits on the table.” Eventually, the two sides agreed to media-

tion and, fortunately, the funding institutions were able to accommodate the project delays. “It took many years to get through all of this and it was tough on a lot of us,” said Hiltunen. “Once it’s built and we’re serving people and things are going well, that’s going to show people that it’s really a great project. ” Organizations like Metropolitan Interfaith Council on Affordable Housing (MICAH) work to mitigate such resistance, commonly referred to as the “not in my backyard,” or NIMBY reaction. MICAH, a group of faith congregations throughout a seven-county metropolitan region, conducts outreach and education on what affordable housing is, who needs it and why. “The stereotypes that we run into often are that these are lazy people, usually minorities, who aren’t working and will just be hanging around,” said Jodi Nelson, MICAH executive director. “People immediately picture the worst of the worst housing projects in America.” Like the AEOA project, permanent supportive housing projects for homeless families and individuals often get the strongest NIMBY reactions. But the image persists, despite the fact that

today’s affordable housing is, in reality, workforce housing for auto mechanics and health care aides, restaurant workers and retail clerks, construction and manufacturing workers, single parents and young professionals just starting their careers. The Bureau of Labor Statistics refers to them as, “essential workers … the unskilled and semi-skilled workers employed in all sectors of our economy.” According to Randy Olson, the Initiative Foundation’s vice president for economic opportunity, the ideal economic environment for all communities, large and small, includes an affordable housing mix. “Hourly wage and parttime jobs are necessary in the economic spectrum,” he said. “If a community has affordable housing, it means that these employees can live where they work and support that community.” Affordable housing projects are also scrutinized much more strenuously than marketrate developments. They must meet the requirements of funding agencies and thoroughly screen every tenant to ensure they meet income guidelines. “Putting together any affordable housing CONTINUED ON PAGE 60

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Tonya Hollen never wanted a green home. She wanted a safe one.

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Greener Pastures: The Minnesota Housing Finance Agency adopted Green Communities criteria as a mandatory requirement for all affordable housing financed with state dollars. “The results are good for communities, good for the environment, and good for the economy,” said Commissioner Dan Bartholomay (above).

That’s what she had for more than a decade in the Twin Cities suburb of New Hope before a worsening health condition and risky refinance led her to lose her home to foreclosure. In the Twin Cities, where the average monthly rent for a bedroom was twice what she could afford, it felt impossible. “I saw places with bullet holes,” said the single mother from Minneapolis. “I saw places with dirty carpet that they wouldn’t pull out or even clean before I moved in.” Hollen’s teenage daughter suffered from asthma. When she asked for better conditions, she faced scorn for what property managers saw as extreme entitlement. “I was looked at like, ‘You’re Section 8, what do you expect,’” Hollen said. Sifting through the listings, she saw an ad for a “new community” with affordable housing. “That was my last option,” Hollen said. “I used the newspaper, but I wasn’t finding anything (I could afford).” Hoping it was her ticket out of out homelessness, Hollen visited one of the new apartments at the Ripley Gardens affordable housing and historic restoration project in Minneapolis. “I walked in and didn’t go any farther than the entry and said, ‘I want it.’”

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Minnesota is leading a revolution in the building industry, proving that green housing is more than a trendy statement. Reduced energy costs and improved health benefits are engineered into many new developments. “These housing units give priority to both people and the environment,” said Rosemary Dolata, architect and program manager of Aeon, a Twin Cities-based nonprofit housing developer that built Ripley Gardens and 1,700 other affordable units in Minnesota. The results of the Hollen family’s new living situation became evident at her daughter’s medical appointment shortly after moving into Ripley Gardens. “The doctor asked why we didn’t refill her inhalers,” Hollen said. “I told him it was because she didn’t need them.” Within six months of living in her two-bedroom unit in Ripley Gardens, Hollen has seen a noticeable difference in her daughter’s health. Her teenage daughter has gone from using her inhaler three times each week to only a few times each year. “My daughter’s asthma has cleared up,” Hollen said. “We’re not spending money on her asthma medication.”

Wealth &

Wellness

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The Greening

Five years ago, the Greater Minnesota Housing Fund and metro-based partner, Family Housing Fund, set an ambitious goal of making all affordable housing in Minnesota green. “Most affordable housing in Minnesota was not green four or five years ago,” said Warren Hanson, president of the Greater Minnesota Housing Fund (GMHF). “Minnesota Housing Finance Agency had high design standards for rental housing, but single-family affordable homes were built to basic building code standards. Homes were not energy efficient. They did not have the best insulation, and the monthly utility bills were often more than people could afford.” GMHF and the Family Housing Fund responded by creating the Minnesota Green Communities initiative, part of a nationwide effort to promote the creation of affordable, healthier and more energy-efficient housing in both multi-family rental projects and singlefamily homes. In 2009, the Minnesota Housing Finance Agency adopted the Green Communities criteria as a mandatory requirement for all affordable housing financed with state dollars. “I am proud of the fact that we

of Minnesota

“The most important green features are not the bells and whistles. It’s good insulation. It’s good sealing of leaks. It’s good ventilation of the house.” –KATHY GRELL, DEVELOPER

have been able to build momentum statewide,” said MHFA Commissioner Dan Bartholomay. “The result is good for communities, good for the environment, and good for the economy. We continue to maximize our investments by encouraging people to live near transportation and other community amenities, lowering long-term operating costs and reducing environmental impact.” Because of this partnership, Minnesota has become a national model for how to integrate green into affordable housing policy. With more than 3,000 units completed, under construction or in development, Minnesota Green Communities has become the largest green building program in the state. “We’re the only state that has gone this green,” Hanson said. The local movement is gaining national attention for model projects that range from Ripley Gardens in Minneapolis to River Rock Townhomes, a rental townhome development for homeless and people with disabilities in Little Falls. “People are going to look at these homes and once they see them,

say I want to live here,” said Matt Becker, an architect with Helenske Design Group, which designed the River Rock development that will be completed in October. To ensure affordability, energy efficiency is essential in existing homes as well as new developments. In central Minnesota, the Initiative Foundation has partnered with the Rural Renewable Energy Alliance (RREAL) to install solar panels that provide supplementary heating to low-income homes. The panels deliver sun-warmed air that reduces the demand on furnaces and saves homeowners up to 30 percent on annual heating expenses. “It’s a project with a wide spectrum of benefits,” said Initiative Foundation President Kathy Gaalswyk. “There’s some immediate financial relief for low-income families, but it also helps the environment and saves public funds that would otherwise be used for energy assistance. Hopefully, the federal weatherization efforts will make even more of an impact.”

A Developing

The green movement extends beyond government agencies and nonprofit groups, spurring action among civic-minded leaders, builders and developers. “The most important green features are not the bells and whistles,” said Kathy Grell, a developer and builder of affordable housing in Park Rapids. “It’s good insulation. It’s good sealing of leaks. It’s good ventilation of the house.” Reviewing a report on the lack of available housing in Park Rapids led Grell and her husband, Larry, to develop nine acres of land into a neighborhood of 37 affordable homes. “We didn’t plan to make our houses so green or energy-efficient,” said Grell, a teacher who turned finance manager after receiving her MBA from the University of St. Thomas. “It just seemed to make sense.” The couple started planning the development in 2000 and built the first home in 2004. Their affordable housing development has been embraced, even during a housing slowdown. Thirty of the thirty-seven lots have been sold. “I think this is a program that can be duplicated,” Grell said. Larry has completed training in green building techniques while Kathy has shepherded homeowners through the often lengthy home buying process. She has developed relationships with government agencies to provide the programs and financial support to the homebuyers. “When I hear people say, ‘I never thought I’d own a home,’ or, ‘I never imagined I’d have a home like this,’ it is really rewarding,” Grell said. “It’s common sense”.

Story

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7 11 16

8 3

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Walkability Key retail services like grocery stores are within walking distance of the homes or public transportation. Sidewalks or pathways link the home to parks and other neighborhoods.

Lots of Love To reduce environmental impacts and preserve public open-space, lots are smaller than those of suburban sprawl neighborhoods.

Address the Envelope Homes are wrapped as tightly as possible with special materials that reduce heat and cooling losses and prevent moisture leaks.

Think Pink Inexpensive insulation reaps lasting rewards in energy savings, especially when added to attics and uninsulated spaces. Choices include spray foam, blown cellulose and traditional pink batts.

House Warming Heating the home wonâ&#x20AC;&#x2122;t break the bank with the presence of a natural gas furnace that exceeds 95-percent efficiency. Geothermal systems, while costly up-front, provide even greater energy savings.

Star Bucks From washing machines to refrigerators, the Energy Star label identifies appliances that meet federal standards for efficient energy and water consumption.

Lighter Side Green lighting includes LEDs and compact-fluorescent (twisty) bulbs that require far less energy to illuminate a room. Daylight sensors or timers ensure that outdoor lighting is on only when needed.

Meter Readers Visible electricity meters allow residents to be energy-minded and aware of their consumption.

Just Venting High-quality airflow is achieved through the use of continually ventilating fans throughout the home.

10 Low Flow Energy-smart plumbing fixtures reduce water consumption with a targeted rate of less than 2 gallons per minute.

Potty Retraining Full-flush or half-flush? Allowing this simple choice can reduce water consumption to 1.3 gallons or less.

Earthscaping Selecting native plants reduces irrigation needs. Other beneficial tree species provide shade in the summer and heat-retention in the winter.

13 Tanks for Nothing Tankless heaters save energy by supplying hot water only when needed, instead of frequently heating and reheating a conventional tank throughout the day.

14 Air Brushing Wall paints as well as cabinetry and flooring sealants have low amounts of volatile organic compounds (VOCs) to reduce indoor air pollutants.

15 Floor Plans Hard floors, made from materials like vinyl, cork or Minnesota hardwoods, trap fewer indoor pollutants and typically last longer than carpeting.

1 16

Homeownerâ&#x20AC;&#x2122;s Instruction Manual Homes actually come with a user manual that outlines routine maintenance and ensures that residents are able to maximize the rewards of green building features. Manuals also increase awareness of public transportation and neighborhood conveniences as well as encourage other green and healthy activities. IQ

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Liz and Chad Robbins had always enjoyed downtown living. So when Chad began his Mayo Clinic residency in 2008 and the couple moved from Birmingham, Ala. to Rochester, Minn. they bought a home in the Kutzky Park neighborhood. About 10-15 years ago, this downtown neighborhood was already acquiring a bad reputation for run-down homes and increasing crime. But two movements—one organized by concerned residents to take back their neighborhood, and another by the nonprofit First Homes of Rochester to renovate and re-sell some of the neighborhood’s older homes—have begun to turn things around. “We’ve lived here a little over a year and we haven’t had any problems with the neighborhood,” Liz Robbins said. “We got this lovely, restored old home that we thought we’d never be able to afford. My husband walks to work nine blocks every day, and all the things we need to do are within a couple blocks. It’s great.”

Meanwhile near Brainerd, when one of Karen Mason’s neighbors fixed up her home, it prompted the Pine River resident to take the plunge, too. Mason had grown up in the 100-year-old home and moved back five years ago. “This was the oldest-looking house in the neighborhood,” Mason said of her house in the small town. “I’d always wanted to fix it up, but there was no way on my income." So far, Mason has combined about $4,000 of her own money with a forgivable loan to replace the roof, windows and doors, and to put up new siding in the spring. Stories like these show that it’s possible to fix up older homes and build stronger core neighborhoods in cities and small towns throughout Minnesota when motivated residents, resources and public policy mix together just right.

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Once and Again: In Rochester’s Kutzky Park, neighborhood developers turned back time by modeling an affordable multifamily unit after a turn-of-the-century Sears-Roebuck design.

In central Minnesota, the Initiative Foundation has been working to strengthen core neighborhoods by engaging residents in St. Cloud and other communities. Among neighborhood leaders’ chief concerns are foreclosed homes that are falling into disrepair or being converted into rental properties. “With foreclosures, we have an affordable housing challenge that, ironically, could also be an affordable housing solution,” said Kathy Gaalswyk, Initiative Foundation president. “We’re helping communities to reinvest in their core neighborhoods to revitalize their downtowns and provide opportunities for families.” Until the mortgage crisis and economic recession hit, the majority of affordable housing built each year was new construction homes located in subdivisions at or near the edge of town, said Warren Hanson, president and CEO of the Greater Minnesota Housing Fund (GMHF). According to Hanson, the halt of new construction is beginning to benefit core city neighborhoods. “Just as Main Street declined because of the ‘Big Box’ commercial strip developments built on the edge of towns, core neighborhoods declined because of new subdivision developments,” Hanson said. “This 42 Initiative Quarterly Magazine

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process has started to reverse itself. We are now seeing exciting revitalization projects happening in communities across the state.” In fact, fixing up older homes is one of the greenest, most conservation-minded building techniques, said John Harrington, a program and loan officer and green building specialist for the Fund. “Older homes are already located in the center of town life. Fixing up these homes extends their useful life, re-uses materials, and reduces the need to convert farmland and other usable land for new housing.” Plus, older homes often have wonderful architectural details that can’t be cost-effectively re-created in new homes. In Rochester the nonprofit organization, First Homes, created by the Rochester Area Foundation, set a goal of buying, rehabilitating or removing more than 50 core-neighborhood foreclosed homes in 18 months. The organization received $3.3 million in federal and state grants through the Minnesota Housing Finance Agency, Greater Minnesota Housing Fund and other groups, according to Sean Allen, First Homes’ Executive Director. The group has been working for years to improve the Kutzky Park neighborhood, which had long-running problems with rundown properties, he said.

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Retro Revitalization: Metro Plains Development and First Homes of Rochester are building the new Cascade Creek Apartments (below) on the site of blighted homes (right) in Kutzky Park.

“We picked the worst houses in the neighborhood and tried to make them the best,” Allen said. First Homes purchased and renovated more than 25 homes in the neighborhood, using a land trust model that retains ownership of the land after the house is sold to a buyer. That reduces the purchase price of the home. Resale restrictions make sure the homes stay owner-occupied and affordable in the future. Pine River has already used a Minnesota Small Cities grant to help rehabilitate eight commercial and eight residential properties, including Mason’s home. “You have to have good housing if you want a good workforce,” said Gail Leverson, executive director of the Cass County Economic Development Corporation. In other parts of the central region, the Central Minnesota Housing Partnership has used federal Neighborhood Stabilization Program funds to target five high-foreclosure communities in Wright, Sherburne and Isanti Counties and help with down-payment assistance as well as home repairs. The agency administered up to $12,000 per household through the one-time allocation, said Bill Reinke, executive director.

However, preservation of existing homes isn’t always an option, especially when a house is too run-down. “We’ve got about 100 substandard houses here in Kutzky, and they can’t all be saved,” said Dave Edmonson, a longtime Rochester resident and member of the neighborhood association. In some places, First Homes has torn down old housing that couldn’t be restored and put up affordable condominiums and single-family homes that fit the neighborhood’s historic character, Allen said. Unfortunately, there will never be enough public dollars available for everybody who wants to fix up their homes, even with the recent increase in one-time federal housing dollars, said Hanson. Instead, he advises communities to think strategically about priorities, and to use housing grants and loans as a way to plant the seeds of revitalization in a core neighborhood. “Leaders have to be very thoughtful about what they do and where they do it, so it has the maximum impact,” he said. “ You’re not going to change a neighborhood overnight, but restore the worst house on the block and maybe you’ll get more people taking their own initiative— house by house, block by block.” IQ

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–BRETT YOUNG

The St. Cloud house Young now owns sits on a busy street that reminds him of the hustle and bustle of Chicago. But the 1953 home had stood vacant for several months after the previous owners lost it in the foreclosure wave that has swept the nation. “I found a glass pipe in the shed in my backyard. It wasn’t locked, so I think people would come and do their drugs there,” he said. “I know the neighbors were happy when I moved in and that I had bought the place instead of it turning into a rental.” But while the price of the foreclosed property was in Young’s ballpark, he said he would not have been able to afford the necessary repairs—a new roof, replacing burst pipes, new windows and added insulation—if not for a second mortgage he was able to secure through the St. Cloud Housing & Redevelopment Authority (HRA). Young’s neighborhood had been included in a federal Neighborhood Stabilization Program (NSP) that targets areas with heavy foreclosure rates to encourage people to buy, fix up and reside in the empty homes, said Shannon 46 Initiative Quarterly Magazine

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Adamski, development assistant for the HRA. The one-time funding has helped about 30 people purchase homes in the St. Cloud area, she said. The St. Cloud HRA has allocated $700,000 of the $2 million in NSP funding it received. Young qualified for a regular mortgage to buy the home with help from a forgivable downpayment loan also available through the NSP program. Then he got the second mortgage, which does not have to be paid for 30 years or until he sells the property. A lack of realtor interest in selling foreclosed properties, mortgage loans that aren’t geared toward buying properties that need major repairs, and the typical delays of working with a government program were the main barriers Young said he had to overcome. “It’s not for the faint of heart. There were times I thought it just wasn’t going to work,” he said. “But I was in a situation where the only way I was going to afford to buy a house was to get one in foreclosure, but it’s been very rewarding for me and my neighborhood.”

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It was the leaky windows that eventually pushed Wallin and Berg to seek help to repair their trailer. But after seeing its condition, a Lutheran Social Services worker suggested contacting the Lakes Area Habitat for Humanity in Brainerd to see about replacing it with something modern, affordable and safe. Signing up led to their placement on a waiting list, which led to an application, an interview with a screening committee, approval, and eventually, 65 days of work with volunteers who helped build their new home. “We pulled the trailer out the day before we started building and lived in a pull-behind camper with our two dogs until it was finished,” Wallin said. The couple obtained a no-interest mortgage through Habitat and put in 300 hours of “sweat equity” into the construction of their home, which was one of 120 houses Habitat builds annually in Minnesota, said Jan Plimpton, Habitat for Humanity of Minnesota executive director. The average family buying a Habitat home earns $23,000 per year, and many are single-parent families, she said. The homes are designed with affordability and energy-efficiency in mind, and utility bills can average as low as $40 per month. “Minnesota Habitat for Humanity is showing that they understand that owning, maintaining and operating a home are vital considerations if homes are to remain affordable over time,” said John Harrington, Minnesota Green Communities program officer at the Greater Minnesota Housing Fund. Wallin and Berg, who recently celebrated their engagement to be married, moved into the new three-bedroom, one-bathroom home with in-floor heating in January. Though the process took three years from start to finish, Wallin said the experience has been worth the wait and the uncertainty of not knowing whether they would be accepted. “I’m not sure why we were the lucky ones,” she said. “But our plan is to help someone else out. We’ll be helping on a new home Habitat is building this March.”

The split-level, 1970s home Ihrke and her sons moved into in Fergus Falls two years ago had been on the market for some time, but was in great shape and needed no repairs. “We did a little remodeling, but just to suit our family better,” she said. “They encouraged us to look for a home that didn’t need lots of work. They didn’t want us to buy the cheapest home on the block.” But Ihrke said she wouldn’t have been able to afford that home without the low-interest mortgage she found through USDA Rural Development’s Direct Home Loan Program. The income-restricted program offers mortgage loans with interest rates as low as 1 percent for home buyers who have good credit but have been turned down by commercial lenders, said Allen Cowles, area specialist for USDA Rural Development. The mortgages are offered in communities with populations smaller than 20,000. Participants agree to pay a percentage of any appreciated value back into the program upon resale, Cowles said. Irhke said she found out about the program from a good friend who bought a home a month before Irhke ended up closing on hers. Her boys, now seven and 10 years old, have benefited greatly from living in their own home. “They’re learning about taking care of our stuff because we want it to last,” she said. “I’m so thankful, because we wouldn’t be in a home this nice without this mortgage.” IQ

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“Even newer single-family homes that were foreclosed on but weren’t winterized ended up with pipes bursting and water pouring out the front door.” —Stephanie Klinzing Elk River has since developed policies that allow it to secure and maintain any foreclosed single-family home and recoup the City’s expenses from the lenders. Foreclosed townhomes pose additional challenges, according to Klinzing. While the city can collect property taxes on foreclosed homes, lenders aren’t required to pay townhome association fees needed to maintain shared heating and cooling systems, roofs, snow removal and lawn mowing. “This overburdens adjacent residents, and the shortages can destabilize the entire development,” she said. “The remaining residents don’t have any legal recourse.”

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Although the precise need for affordable housing is unknown, the most recent study by BBC Consulting projected a 2010 shortfall of 22,000 units of affordable housing in the Twin Cities and 10,600 units in greater Minnesota, after all federal, state and philanthropic resources are invested. However, the foreclosure crisis has caused conditions to worsen. The BBC study assumed that private builders would continue building and producing homes at a strong rate through 2010, and that foundation and government funding would continue at the same rate to supplement production of affordable housing. Neither happened, Hanson said. As a result, the need for affordable homes is greater than ever. “The need has skyrocketed because of a series of events that started with the mortgage mess and rippled through the whole economy,” Hanson said. Housing construction has traditionally served as an employment generator. According to the Minnesota Housing Partnership’s 2009 third-quarter report, housing construction-

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related employment was down to levels of the early 1990s. Local nonprofit groups, faith-based groups like Habitat for Humanity, and state and federal agencies are working together to help communities stabilize and recover from foreclosure impacts by acquiring, rehabbing and selling foreclosed homes in the hardest hit areas of the state. Special down-payment and low-interest loans are available to new homebuyers, who are required to receive homebuyer training and credit counseling. After researching several programs, Anna Vick applied to a USDA Rural Development program for a subsidized loan to move out of her two-bedroom apartment and into a singlefamily home. She’ll partially pay the loan back with equity earnings if she ever sells her home. Because she bought a foreclosed home in Isanti and qualified based on her income, she received $12,500 in down-payment assistance and $23,600 in rehabilitation assistance from the federal Neighborhood Stabilization Program. The program’s purpose is to decrease the number of vacant homes on the market. Vick used her funds to replace waterdamaged windows, floors, ceilings and carpet. She also purchased new appliances and weatherized the home to make it energy-efficient. Today, her mortgage payment is $834 per month, and due to Minnesota’s new antipredatory lending laws, it will stay at the same affordable rate for 30 years. “Our newly rehabbed home is in great shape and we can afford it,” Vick said. “The kids can have friends over and go out into the yard and play.”

Rents & Raves Housing experts point out that rental housing is as important as single-family homeownership. Government and foundation-sponsored programs both support the production of multi-family rental housing developments and provide rental vouchers that can be used for any rental unit. “Homeownership for everyone isn’t the goal,” said Kathy Gaalswyk, Initiative Foundation president. “It’s nice to think that we could all have a yard, a front porch and a C O N T I N U E D O N PA G E 5 0

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“We need to make sure our existing multi-family facilities are safe and viable places to live. Our existing portfolio of multi-family housing is a tremendous asset. It will only remain an asset if we maintain it and stay on top of preserving units that need to be preserved.” –Colleen Landkamer picket fence, but not everyone has the means or the desire to maintain it. Many Minnesotans want rental housing because it’s typically the most accessible and affordable.” Each year, government, nonprofit and commercial developers build 1,200 to 1,400 new units of affordable housing in greater Minnesota. New housing is important, but according to Colleen Landkamer, state director for Minnesota’s USDA Rural Development office, the highest priority for her agency and other state-level partners is the preservation of the existing affordable rental housing. She said her agency financed and maintains about 11,800 units of affordable rental housing in small cities and towns throughout Minnesota. Much of this housing was built in the 1960s and 1970s and some of the units des50 Initiative Quarterly Magazine

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perately need improvements like energy-efficient windows, heating and cooling as well as new appliances and basic updating.

Tax Credit Tools Minnesota Housing Finance Agency Assistant Commissioner Tonja Orr said rental preservation is one of her top concerns. According to Orr, the federal low-income housing tax credit program has historically been the single largest source of capital for funding affordable rental housing. The program allows investors with a federal tax liability to buy tax credits that can supplement 70 percent or more of the total cost of an affordable rental project. The more private investment in a project, the less government subsidy is needed. “It has been a real win-win program for investors, government, low-income renters and local communities,” said Orr. As business profits have fallen, she added, investors have less need for tax credits and fewer investor dollars are flowing to affordable rental projects during the recession. “Nationwide, everyone is concerned about the tax credit program,” Orr said. “Until the economy rebounds, the tax credit program won’t be as robust and private capital will be more scarce.” She believes that will lead to an increased need for state government and philanthropic funding. In addition, many of the tax-credit projects created years ago have federal contracts that are expiring and will no longer provide the level of affordable housing they once did. Overall, Orr said, Minnesota Housing and other agencies are working together to supply a mix of housing so people of all income levels are housed affordably. She paints the picture of a high school graduate going to school part-time and working at the gas station, or a the teacher with a back-log of student loans, or a retired couple who wants to live near their children. “In the richest country in the world, why is it that people have to live in their cars?” Orr said. “Why do they have to move every three months because they can’t afford to stay? It’s a basic human right that everyone should have a safe, decent and affordable place that they can call home.” IQ

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stopped making payments. Frustrated and confused, a door finally opened. She received a phone call from a bank who promised to give her a modification. She researched the company and quickly returned an application with a check for about $2,700 to cover fees and closing costs. Eight months ticked by.

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In August 2009, after dozens of unreturned phone calls and unpaid bills, Katherine finally learned that the modification company—and her $2,700—no longer existed. Unfortunately, the Mannings were just one of many families who have been victimized by foreclosure scams during this crisis. Katherine finally received a modification offer from her mortgage company in October, but it was not enough. Despite their best efforts, the Mannings could not save their home from foreclosure. A sheriff ’s sale was planned for early February 2010. It’s the harsh reality of the foreclosure crisis—not every story has a happy ending. “I don’t know where we’re going to go,” said Katherine, who remains thankful for her 21-year marriage and eight healthy children. “That’s the scariest part.”

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In Crisis: Greg Staffaâ&#x20AC;&#x2122;s 2008 Ford Focus is his current home.

Greg Staffa, Farmington Greg Staffa thought he did everything right. In 2005, he bought a townhome for less than his pre-approved maximum, and he could easily make the payments with his income as an airline baggage handler. Four years earlier, he pulled himself out of poverty and homelessness. While living out of his car, he saved enough money to put a down-payment on his first home. According to Staffa, his string of good luck ended when he was injured on the job. Staffa said that he received workersâ&#x20AC;&#x2122; compensation until a doctor suggested that he was injured due to his weight. After the payments ceased, Staffa took the case to court and won. The airline offered him a desk job but took away the seniority he had earned after working with the company for seven years. He said his new job came with a smaller paycheck that was not enough to make ends meet. He contacted the bank before he fell behind his mortgage payments, and explored various CONTINUED ON PAGE 54

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refinancing and modification options. Soon after, Staffa was laid off. In April 2009, he met with his bank and was told that he needed to find a job within two months. He did not expect the competition. By June, Minnesota’s unemployment rate had grown to 8.4 percent. Due to his injury, Staffa was limited in the types of jobs he could pursue—he could not lift more than 20 pounds. On December 18, 2009, Staffa’s home was foreclosed. He put most of his possessions in storage and lives out of his 2008 Ford Focus, where he spent Christmas and his 36th birthday. Staffa created a website, gregstaffa.com, and a YouTube video in an effort to raise awareness about his story. He also started an e-mail campaign, encouraging sympathetic people to contact bank executives in an effort to get his home back, but it was not enough to keep him in his home. Today, Staffa uses the social media site, Twitter (@gregstaffa), to provide updates on his job search and the challenges he encounters living out of his car.

Kerry Schaub, Duluth Kerry Schaub was trying her best to be a superwoman. The wife and mother of three children, ages 13-19, worked to balance home, school and the family checkbook with her job as a National 54 Initiative Quarterly Magazine

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Guard airfield manager. But when her home came dangerously close to foreclosure, Schaub quickly realized that she could not do it all. “Basically I was lying to myself about finances,” she said. Schaub was sent to Iraq three times in the past five years, not to mention a half dozen other deployments. Every time she left home, she would create a schedule for her husband and children, detailing all of the events, medical appointments and pertinent information for each day. She managed the family finances online and kept to herself about late payments. Schaub knew her account balances went up and down, but her attention was focused on a different family crisis—helping her son with mental health issues. In October 2009, Schaub received a foreclosure notice. Her wake-up call came when Schaub’s sisters saw it in the newspaper. “They pulled me aside,” Schaub said, and told her help was available at Lutheran Social Services Financial Counseling, where she met with a counselor and developed a budget. The counselor also advised her to come clean to her husband about their financial problems. “The hardest thing to do is ask for help,” Schaub said, her voice breaking with emotion. After Schaub broke the news in October, she and her financial counselor took on the daunting task of reversing the foreclosure. She spent hours researching veterans’ grants, filling out applications, and sending modification requests to her mortgage company. The clock was ticking. Her home was slated for a sheriff ’s sale on January 13, 2010. Just before Christmas, the mortgage company gave her a gift that many families pray to receive—a loan modification. For the relieved Schaub family, the holidays were never more peaceful. Now back on track with manageable payments, Schaub is thankful for the support she receives from her family. She meets with her sister regularly to make sure everything is caught up, and she highly recommends Lutheran Social Services Financial Counseling. Although it was difficult for Schaub to ask for help, financial counselors say the sooner homeowners seek help, the easier it is to find a solution. IQ

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The apartments are divided into two separate sectionsâ&#x20AC;&#x201D; 40 efficiency units with kitchens for homeless individuals, and 30 private rooms with bathrooms and full meal plans for individuals with chemical dependency issues. Residents are permitted to drink in private, but not in the buildingâ&#x20AC;&#x2122;s public areas. They can also choose to access the many services offered by the staff, including medication reminders and case management. Measured outcomes show that alcohol consumption among residents has noticeably dropped, as have encounters with the police and visits to detox centers and emergency rooms. â&#x20AC;&#x153;For the first time in their lives itâ&#x20AC;&#x2122;s up to them,â&#x20AC;? Reilly said. â&#x20AC;&#x153;Theyâ&#x20AC;&#x2122;re not in a treatment facility, so they can investigate sobriety on their own terms.â&#x20AC;? Outside metropolitan areas like Duluth, rural homelessness presents a unique challenge, said Bill Reinke, executive director of Central Minnesota Housing Partnership (CMHP) in St. Cloud. While the urban homeless are fairly visible, rural homeless are often living in cars, doubling up in apartments or sleeping in unattended fish houses. His organization, with funding from the Initiative Foundation, coordinates Heading Home Minnesota to address homeless issues in 14 counties. â&#x20AC;&#x153;The foundation has recognized that the lack of affordable housing was a huge threat to community health and the livelihood of local residents,â&#x20AC;? said Kathy Gaalswyk, Initiative Foundation president. â&#x20AC;&#x153;We got involved in helping to assess the need and helping the housing partnership to address that need effectively.â&#x20AC;?

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The foundation has provided some $1 million to housing projects throughout its service area. Since 1995, $580,000 has gone to support CMHP and its programs. Including the city of Duluth, St. Louis County covers more territory than the state of Rhode Island and “has more trees than people,” according to County Commissioner Steve O’Neil, so it struggles to address both rural and urban homelessness. “What we’re trying to do first is to keep people out of shelters, and if they have to go to a shelter, make that shelter stay as short as possible,” O’Neil said. “Our numbers had been going down back in 2007 and early 2008. Now they’re going back up.” In addition to the economic recession, O’Neil cites four reasons for the explosion of homelessness over the past 30 years: • Closing of mental health centers without offering supportive housing • Termination of public housing construction and shift to the Section 8 program, which was not adequately funded • Urban renewal, which demolished inexpensive single-room occupancy motels and offered no alternatives • Dramatic increases in domestic abuse, causing an increase in homeless families, usually single mothers with young children Add the loss of jobs and you have what Klun terms the “perfect storm” for spiraling homelessness. Deb Holman, Street Outreach Worker for Churches United in Ministry CONTINUED ON PAGE 58

Bill Reinke, Central Minnesota Housing Partnership

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Can We Solve Homelessness? CONTINUED FROM PAGE 57

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(CHUM) in Duluth, said it has gotten harder to find housing resources for her homeless clients, especially if they have criminal histories. “All I can do is offer them shelter here (at CHUM),” she said. “The people I work with have a lot of barriers—lack of income, often generational poverty, criminal history, no rental history, no family support. They aren’t eligible for government programs if they have a record. A lot of these guys out on the street will get drunk just so they can go to detox and have some shelter.” Statistics from the Wilder Research Center show that many homeless people are coping with physical and mental illnesses, which add up to huge social costs. “But homelessness is a lousy treatment plan for chemical addiction,” Klun said. Lisa Ronnquist agrees. “If I didn’t live here,

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Turnaround: Lisa Ronnquist (above) found refuge from chemical dependency and homelessness at San Marco Apartments (below) in Duluth.

if I was still on the streets, I’d just keep on drinking because that way I’d be hanging around with people and I’d be safe.” Today Lisa mentors new residents, many of whom she knows from her days on the streets. She’s been recognized as a valuable volunteer and proudly shows visitors her tidy apartment. She is also a respected Ojibwe elder and frequently visits her children and grandchildren. So, can the grim cycle of homelessness be broken, especially given today’s economic circumstances? “I think we’ve all tried to complicate it over the years,” said Cathy ten Broeke, Coordinator to End Homelessness for Minneapolis and Hennepin County. “People can have complicating factors like mental health, physical health and chemical dependency in their lives, but the reason that people are homeless is that they can’t afford a place to live.” She said that rental subsidies, support programs, and more public and private investments are part of the solution. “I have no doubt we can solve homelessness,” she added. “We can do it, we know how to do it, so it’s not a question of ‘can we’ but ‘will we?’” IQ

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“We run into a NIMBY reaction virtually every time an affordable housing project is proposed. In most cases, the city council does the right thing.”

Jack Cann Housing Preservation Project

deal today requires the participation of several entities that fund that type of housing—and they are all very careful about where they put their money and what kind of development is going to result,” said Jack Cann, senior staff attorney with the Housing Preservation Project. Even so, he added, “We run into a NIMBY reaction virtually every time an affordable housing project is proposed. In most cases, the city council does the right thing.” But sometimes it doesn’t. In 2006, John Duffy, president of Duffy Development Company, proposed an affordable rental development in Forest Lake, Minn. An experienced developer, Duffy chose a site that was already zoned multi-family. He proposed a townhouse project that would not require rent subsidies but, instead, would be designed and built to rent at about 30 percent of the area’s median family income. After receiving approval from city officials and awarded project funding, the November 2006 election changed the make-up of the city council—which then voted to change the zon-

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ing code to disallow townhomes. “It seemed that they had specifically adjusted their code so that what we had proposed couldn’t go on that particular site,” said Duffy, “so we changed our proposal from townhomes to an apartment building. We didn’t ask for anything from the city, but we had to go before the city council because of the number of units.” The council delayed, then voted the project down 3-2. Duffy sued. “That’s the only time I’ve ever sued a city, but their actions violated so many things,” he added. “They had no legal basis to turn it down.” In the end, Duffy’s original townhouse project received council approval. For more than two years now, the development has provided homes to families with average annual incomes of $36,000. Seventy percent of them work right in Forest Lake. “Part of Duffy’s settlement was that the city would appoint a citizens’ task force to make recommendations about affordable housing,” said Cann. “The result of the controversy was that Forest Lake now has the best comprehenCONTINUED ON PAGE 62

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62 Initiative Quarterly Magazine

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sive plan in the metro area in terms of provisions for affordable housing.” No one suggests that residents should sit quietly if they have reservations about a proposed project. Citizens should be active and involved and know what is happening in their communities. There are times, however, when public questions and opinions lead to better affordable housing projects. When the City of Cloquet chose to sell a portion of a downtown parking lot to the Human Development Center (HDC) for apartments and an outreach center that would serve homeless people, Robert Nelson and other business people sued to preserve it. “None of us were against the housing,” said Nelson, who owns Nelson Funeral Care in Cloquet. “It was just that the city was going to give them one-third of the parking lot for a dollar, and I need the parking lot.” After they lost twice in court, city officials decided to demolish an adjacent blighted house and dedicate that property to the Outreach Center Apartments. Kim Matteen, foundation director for HDC, said the apartments and drop-in center opened in 2004 and Nelson is a supportive neighbor. Nelson said the compromise produced a better location for the center. “That’s where it should have been all along.” “We’re all protective of our investments and our families, as well we should be,” Olson added. “Not every development is right for every neighborhood, but we urge people to gather all the facts before they show up at the city council meeting with torches and pitchforks. Everyone deserves an affordable place to live.” IQ

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IQ&A with Matt Kilian, Executive Editor

IQ Brings it Home with Warren Hanson, President and CEO of the Greater Minnesota Housing Fund.

IQ: Foreclosures, poverty, homelessness . . . what keeps you coming into work each day?

WH: Quite simply, it’s the opportunity to do good. I work with the most innovative housing and community development leaders in the state. We usually overcome all odds by adopting the central principle of “housing first.” Safe, decent and affordable housing stabilizes individuals and families as well as strengthens communities. IQ: Which success story sticks with you the most? WH: Lexy—I can still see her face. She was 16, scared, homeless, and

IQ: What housing solutions are we overlooking? WH: We have thousands of existing homes and apartments that need retrofitting to make them efficient and affordable. It’s not just about building better neighborhoods— it’s about rebuilding them to be greener and healthier.

IQ: Which myth poses the greatest challenge to your work? WH: It’s crazy that some still believe that housing is a

living at Life House for Youth in Duluth. She dropped out of school and had a new baby. It tore at me. But Life House got her back in school, found her a job, and gave her support to be a good mom and employee. Ultimately, she got her own apartment. Lexy became our living proof that lives can change and lives can be saved.

privilege and not a basic human right. If an earthquake or flood strikes, we see firsthand how a safe home is essential to human survival. But it is also the foundation for our health, for our children’s future, for succeeding in school and on the job. We all have to start out at home.

IQ: Is there any upside to the foreclosure crisis? WH: That’s hard to answer. There has been so much personal

IQ: If housing is one big football game, what’s the situation

tragedy and financial loss that virtually every family is now worse off. This crisis was caused by massive fraud and greed. One upside is that many of these bad actors have been prosecuted and jailed, and we have new state and federal laws. We also have a more ethical and accountable real estate environment, but the damage will take years to fix.

WH: Housing is competitive. When the game is

IQ: Finish this sentence. The most exciting innovation in affordable housing is . . .

and the score?

played fairly, most people are winners, meaning no one is cheated out of a chance to gain ground. Unfortunately, the game was not played fairly for years. Until just recently, the score was Home Team: 0 with many injured players. The Visitors cheated and racked up points. Fast forward to today, and the game has been cleaned up, the playing field is more level, and we have a better playbook as a result.

WH: For me, it’s a tie for first place. I’m proud of our shared accomplishment to make all new affordable housing green and healthy. We set this goal five years ago, and today it’s statewide policy. Another innovation is the widely adopted goal of ending chronic homelessness in Minnesota. We’re talking about modest housing for about 6,000 people. When you compare the ethics and the costs, it’s both the right thing and the smart thing to do. 64 Initiative Quarterly Magazine

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IQ: Okay, then which play are you calling next? WH: A strong rush up the middle. We want to revitalize our core neighborhoods. We want to anchor new smart growth developments on regional transit corridors to reduce dependence on cars. We want to build homes that conserve energy and promote health. This is our state’s most economically and environmentally sound future. Sustainability is the name of the game. IQ Warren Hanson Warren has served as president and CEO of Greater Minnesota Housing Fund since its start-up in 1996 and worked with The McKnight Foundation and Blandin Foundation to plan and capitalize GMHF as Minnesota’s largest rural community development finance institution. Warren has led nonprofit and public development organizations for 30 years and is the co-founder of the Community Reinvestment Fund (CRF), a national secondary market for community development agencies. He serves on various national and local boards of directors.

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