CURA Housing Forum

1
Your Housing Resource of Choice
MHFA and the Next Decade of Housing in
Minnesota Presentation to
CURA Housing Forum December 12, 2003
We are committed to meeting Minnesotans needs
for decent, safe, affordable homes and stronger
communities
651-296-7608 800-657-3769 TTY 651-297-2361

www.mhfa.state.mn.us
2
Discussion Outline and Summary

• MHFA mission, organization key functions and
  status
• Policy and Programmatic Approach
• Our Future Housing Challenges The Next Decade
  of Housing in Minnesota
• Goals and Action Plans

3
MHFA Mission, Organization, Key Functions and
Status

• Mission - - Adding Quality to
  Minnesotans Lives By
• Meeting Minnesotans needs for decent, safe,
  affordable homes and stronger communities.

4
Organization/Key Functions
Balancing long term financial sustainability and
the affordable housing needs of today and tomorrow

• Housing Finance and Operations Know How
• Housing Programs Know What
• Housing Policy Know Why

5
Housing Finance and Operations
Sources of Funds10/1/03 9/30/05
Uses of Funds10/1/03 9/30/05
203,818,200
290,458,694
517,554,316
522,000,000
232,913,507
326,360,711
2,634,072
98,892,165
90,273,843
Total 1,142,452,754
Total 1,142,452,754
Other includes Federal HOME Funds
Administrative Expenses, Agency Technical
Assistance Fund and the Disaster Relief
Contingency Fund
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Housing Programs

• Homes Division
• 53 of Agency Program Budget (01-03)
• - 601 million
• Serves approximately 11,000 households per year
  in homeownership financing, assistance,
  rehabilitation and counseling
• Multi-Family Division
• 47 of Agency Program Budget (01-03)
• - 529 million
• Serves approximately 43,000 households per year
  in rental assistance, preservation, new
  construction, homelessness prevention

7
Housing Policy

• Ending Long-Term/Chronic Homelessness
• Fair Housing
• Land Use Related Initiatives
• Research, Evaluation, Federal Affairs, Program
  Development

8
Our Future Housing Challenges

• The Next Decade of Housing in Minnesota a
  projection of housing needs to 2010.
• (http//www.mhfa.state.mn.us/about/about_reports.h
  tm)

9
Cost Burdened

• Cost Burdened paying 30 or more for
  Principal, Interest, Taxes, Insurance, and
  Utilities.
• Critical Housing Need paying 50 or more for
  PITIU, or a household living in substandard
  housing.

Source United States Department of Housing and
Urban Development (HUD).
10
Low Income Households
Mpls/St. Paul MSA
Source 2000 Census, HUD, and MHFA staff
calculations.
11
Low Income Households
Greater Minnesota
Source 2000 Census, HUD, and MHFA staff
calculations.
12
Housing Needs Study Summary
Source The Next Decade of Housing in Minnesota
Study - http//www.mhfa.state.mn.us/about/about_
reports.htm
13
Critical Housing Needs in Minnesota, 2000
Source 2000 Census and staff calculations.
14
Critical Housing Needs Minnesota Compares
Favorably
Spending more than 50 of income on housing
Source 2000 Census and MHFA staff calculations.
15
Homelessness in Minnesota 2000

• 21,000 persons homeless or precariously housed
• 8,600 persons homeless
• 5,000 persons long-term/chronically homeless
• New Wilder survey for 2003 available mid-2004

Source Wilder Research Center, October 26, 2000
survey.
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Summary of Current Challenge and Future Needs
Cost Burdened PercentageMN Households
of Total 4,000
1.3 125,000 42
171,000 57 ________
_____ 300,000 100

• The Long-Term Chronically Homeless
• Critical Housing Needs
• Cost Burdened

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Policy and Programmatic Approach to Housing Issues

• A crisis is a crisis a problem is a problem an
  opportunity is an opportunity
• Results driven
• Policy framework
• Choiceincentives and suasion v. mandates and
  judgments
• Concentrationtargeting resources and obtaining
  long-term value/affordability
• Communitypartnerships with nonprofits,
  businesses, and faith communities
• Entrepreneurial and proactive, customer friendly
  and inclusive, accountable/transparent, data
  driven

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Housing Goals for the Pawlenty Administration

• General
• Increase the number of households assisted by the
  Minnesota Housing Finance Agency
• Provide housing opportunities to households not
  being adequately assisted by the private sector
• Strengthen Minnesota communities

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Ending Long-Term/Chronic Homelessness A Crisis

• Issue Long-term homelessness is a breakdown in
  Minnesotas social compact - our most vulnerable
  should not be left to the streets
• Goal End long-term homelessness
• Key Fact Approximately 5,000 (minimum)
  individuals and families experience chronic or
  long-term homelessness and disproportionately
  utilize crisis services
• Action Plan Develop a business plan based on
  2003 legislation with Departments of Human
  Services and Corrections

http//www.mhfa.state.mn.us/about/working_group.ht
m
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Homeownership for Underserved Populations An
Opportunity

• Issue The homeownership gap for families of
  color stymies the American dream for these
  families
• Goal Increase the homeownership rate for each
  underserved ethnic group
• Key Facts (see graphs next two pages)

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Homeownership for Underserved Populations
(continued)

• There is a homeownership gap between white
  families and families of color

Tied for first in the nation 2002 rate is 77.3
22
Owners by Race - US and MN, 2000
Homeownership for Underserved Populations
(continued)
23
Homeownership for Underserved Populations
(continued)

• Action Plan
• Lead private/public partnership focused on the
  issue
• Evaluate Agency marketing and products to
  maximize effectiveness with various ethnic groups
• Target specific communities for implementation of
  initiatives

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Affordable Housing PreservationA Problem and An
Opportunity

• Issue Much of our existing affordable housing
  stock is at risk or deteriorating and replacement
  is cost prohibitive
• Goal Preserve existing affordable housing
  stock to the extent economically feasible
• Key Facts
• 328 developments (various sizes) will have
  Section 8 affordability restrictions expire in
  the next five years about 10 of the
  developments will need incentives to stay
  affordable
• See graph next page

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Affordable Housing Preservation
(continued)

• In 50 counties, 25 or more of the housing stock
  was built before 1939.

In 26 Counties, one-third of housing was built
before 1939
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Affordable Housing Preservation
(continued)

• Action Plan
• Review housing preservation investment policies
  in cooperation with funding partners to develop
  strategic priorities
• Track progress and benefit/cost associated with
  each preservation project and overall
• Identify strategies for expanding/redeploying
  resources for homeownership and rental rehab
  programs

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Economic Vitality HousingA Problem and An
Opportunity

• Issue The lack of housing choices to support
  workers in their employment affects economic
  vitality
• Goal Increase housing choices for low and
  moderate income workers in or near communities
  where greater choice would contribute to economic
  vitality

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Economic Vitality Housing Which Workers
Source Minnesota Department of Economic
Security. Includes all wages, salaries and
monetary supplements including bonuses.
29
Economic Vitality Housing Jobs That Pay Less
than 20.00/hr

• Statewide
• Five of top 10 fastest growing jobs, 2000
• to 2010
• Home Health Care Aide (9.98/hr)
• Social/Human Service Asst
• (12.33/hr)
• Food Preparation/Server (7.27/hr)
• Personal Home Care Aide
• (9.63/hr)
• Computer Support Spec. (19.13/hr)

• Metropolitan Area
• Examples
• Fire Fighter (13.27/hr)
• Entry level police and
• sheriffs patrol officers
• (19.22/hr)
• Entry level elementary
• school teacher (15.70/hr)

• Homeless 41 percent of homeless adults work, 26
  percent work full time.

Source Minnesota Department of Economic
Security. Statewide projections are state wages
from the 2003 Salary Survey, and metropolitan
area wage level data are wage estimates updated
to second quarter, 2003. Homeless worker data
from Wilder 2000 Statewide Survey of Homelessness.
30
Economic Vitality HousingHome Values vs. Family
Incomes
Median Home Values Rose Faster Than Median Family
Incomes
122,400
136,124
56,844
64,793
Source HUDs State of the Cities Database and
MHFA staff calculations. Values in 1999 dollars.
31
Economic Vitality HousingLow-Income Renter Cost
Burdens, 1990-2000
Source 2000 Census, HUD, and MHFA staff
calculations
32
Economic Vitality HousingHousehold Spending on
Transportation
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Economic Vitality Housing
(continued)

• Action Plan
• Develop cost savings and long-term affordability
  through design and material changes, fees, zoning
  restrictions, use of community land trusts/deed
  restrictions, etc.
• Work with Metropolitan Council on housing related
  regional development issues
• Work with business groups to make the business
  case for more housing choices
• Coordinate necessary housing resources with DEED
  JOBZ zones
• General public outreach and education

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MHFA A Housing Resource of Choice An
Opportunity to Make a Great Agency Even Better

• Issue Scarce resources require redoubled
  efforts at customer service, collaboration,
  greater creativity in identifying resources, and
  review of regulatory requirements
• Goal The MHFA should be viewed as a housing
  resource of choice
• Key Facts The MHFA is a great Agency that will
  get even better to respond to todays challenges
• Action Plan
• Establish public/private advisory group to the
  commissioner on Agencys financial structure,
  goals, and resource allocation priorities

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MHFA A Housing Resource of Choice
(continued)

• Review program consolidation and simplification
  opportunities
• Review regulatory/underwriting standards and
  requirements for proportionality and necessity
• Integrate customers and partners into Agency
  decisions
• Enhance use of technology and e-housing finance
• Use of best practice reviews