Tenant protections in a tight housing market

1. Tenant protections in a tight housing market Affordable housing strategies and tools

2. Session overview • strategies and tools to address the loss of NOAH, tenant protection and the creation of new affordable housing opportunities • how the ordinances and strategies came about • the process used to garner community and political support • how stakeholders were engaged • plus the lessons learned and strategies for success  

3. Background: lack of affordable housing Lack of affordable housing is a universal problem facing many communities throughout MN & across the US • higher rental demand • rental rates rising at a faster rate than household incomes • investors purchasing and rehabbing NOAH properties resulting in increased rents • low vacancy rates – owners choosing not to rent to HCV participants

4. “How did the strategies come about” Ownership transition - two large NOAH developments in Richfield and St. Louis Park (700+ and 540+units) • Immediately Increased rents • Value added rehab – increasing rents further • Established new screening criteria and rescreened existing residents • Non-renewed leases – most month-to-month • No longer accepted HCV

5. Ownership transition/Meadowbrook Manor One owner – largest rental and most affordable development in the City. Built in 1949 – 551 units – 160 townhomes and 391 apts.– 26 acre site

6. Units renovated rents

7. Housing advocate response • Position paper drafted - list of affordable housing initiatives that local government agencies could implement • Advocates lobbied policy makers – presented ideas to city councils and staff • Political will positive • Progressive communities took the lead

8. Regional housing workgroups • SWLRT housing committee established – anticipation of housing development along the rail corridor • Regional, state, county, corridor cities, housing agencies and housing advocates • Housing analysis completed – established housing goals • Strategies and tools developed • Regional issues - workgroup converted into a region wide focus – expanded representative members to all local governments – new groups addressing voucher LL retention/recruitment

9. St Louis Park/Bloomington: history of affordable housing high priority • Political will • Adopted city housing goals • Convened community workgroups • Established strategic priorities related to housing • Allocated resources

10. Strategies and tools: 3 focus areas • Preserving existing naturally occurring affordable housing (NOAH) • Tenant protection initiatives • Creating affordable housing

11. NOAH preservation strategies • Local 4d tax incentive program • Multi-family rental rehab program • Legacy program • Housing Improvement Areas (HIAs) • Housing Trust Fund

12. Local 4d tax incentive program • State of MN tax classification – provides approx. 40% savings on rent restricted units • rents restricted at 60 % AMI or less and must receive financial assistance from government entity • target Noah properties – goal: long term rent restrictions • 10 year rent restriction • City provides $200 per unit grant and pays for 1st year tax application to state • Tax savings only applies to restricted units

13. Multi-family rental rehab program • Properties with 3 or more units & 30 yrs. old • Must meet definition of a NOAH property (at least 18% of units affordable to households below 60% AMI) • Maximum loan amount/rent restricted unit = $5,000/$50,000 per building • 10 yr. deferred with 0% interest • Requires 1:1 match by other funds • Rents in assisted units restricted at or below 60% AMI for the entirety of the 10 year term of loan • Properties must give equal consideration to renting to tenants with housing subsidy vouchers

14. Legacy Program • Work with property owners to promote preservation of NOAH • Connect NOAH owners to for and non-profit philanthropic and public investors and developers that create and preserve affordable homes • Benefits to property owner: • Maintain seller's legacy and ensure current residents have opportunity to remain in their homes. • Positive social return of preserve an affordable housing resource in the community. • Streamline sales process. • Currently have two churches that have merged/downsized. RFPs to redev. sites – requiring inclusion of affordable housing

15. Housing Trust Fund • Bloomington – NOAH Fund – $100,000 per year in HRA levy to help facilitate the purchase/rehab of NOAH properties in the future • Bloomington – Establishing a Housing Truest Fund as part of the Opportunity Housing Ordinance • SLP – Affordable Housing Trust Fund – HRA levy primary funding resource. Facilitate the creation and preservation of affordable housing

16. Additional Noah preservation programs: • Housing Improvement Areas (HIA): • City designates home association development as an HIA. • Provides a loan to association for property rehab/improvements • Resource of last resort • Requires reserve and asset study • Fees applied to property tax • Can provide hardship waivers to defer payments • Enhanced vouchers: project based developments opting out of HUD contract

17. Additional preservation policies/strategies • Advance notice of sale • Non-discrimination based on the use of housing choice vouchers or other rent subsidies

18. Additional preservation policies/strategies Advance notice of sale: • requires owners selling a property to notify residents prior to the sale • provides opportunity for preservation buyers to engage in the sale process • Allows tenants top prepare for impending sale and possible rent/lease changes

19. Tenant protection strategies • 90 day tenant protection notice • Annual reporting of legal eviction actions • Notice of eviction - “pay or quit” • Eviction for cause • Non-discrimination based on the use of housing/rent subsidies

20. 90 day tenant protection • Applies to NOAH properties where ownership is transitioning • Requires new owner to give notice to tenants of tenant protection requirements • Ordinance requires LL to pay relocation if they: • raise rents, • perform non-renewals without cause, • rescreen existing residents, within 90 days of sending notice to tenants following the sale of property

21. Notice of eviction - “pay or quit” Prior to bringing an unlawful detainer eviction action for nonpayment of rent or other unpaid financial obligations, a written notice must be provided to the residential tenant specifying: • The allegations of nonpayment of rent/unpaid financial obligations • The total amount due • That property owner may proceed with filing an unlawful detainer eviction within 14 days of the delivery or mailing of the notice.

22. Tenant protection strategies • Notice of eviction - “pay or quit” • Annual reporting of legal eviction actions • Eviction for cause • Screening restrictions • Restrictions on security deposit amounts • Non-discrimination based on the use of housing/rent subsidies

23. Fair Housing, Tenant Rights training & Legal Representation • Local Fair Housing Policy: designates a staff person to act in a resource and referral capacity for persons with fair housing complaints • Tenant rights training – partner with the school district/community housing agency to provide tenant/landlord law training for non-English speaking immigrants • Legal representation for eviction actions: Hennepin county housing court project provides lawyers, legal advice on evictions, lease violations, etc. Available on-site at housing court.

24. And there’s more……. • Citylandlord associations – offer training and informational session to promote good management practices. Staff discuss LL recruitment for HCV, rental ordinance requirements/proposals, crime free requirements, etc. • Annual rental licensing renewal process • owners report the number and nature of legal eviction actions filed in the previous 12 month period: • Certify whether the property meets the definition of a NOAH building • Information used to inform staff and policy makers in developing future housing policies/initiatives

25. Creating Affordable Housing • Inclusionary Housing Policy/Ordinance • Land Banking • Land Trust • Financial assistance – TIF/TIF Pooling • Affordable Housing Trust Fund/HRA Levy • Rental assistance

26. Inclusionary Housing Policy/Ordinance Policy requires new market rate residential developments to include a minimum of affordable housing units in the development Applies to multi-family developments: • Rental • Ownership • Rehab if units are added

27. Eligibility St. Louis Park – all rental/ownership developments with 10 or more units that are: • receiving financial assistance from the city • seeking land use approvals through a PUD, or • requesting a comp plan amendment • 25 year affordability requirement Bloomington • all rental/ownership developments with 20 or more units • incentives and tools to balance costs of providing affordable units

28. Affordable unit requirements SLP/ minimum number of affordable units must be included in the development: Rental: • 5% at 30% area medium income (ami) • 10% at 50% ami – also ownership requirement • 20% at 60% ami • One-for–one replacement: Must replace any NOAH units demolished or converted to other use • Ownership: Requires payment in lieu based on number of units and difference between and affordable ownership unit and the development units.

29. SLP: Inclusionary housing production since adoption of ordinance in 2015

30. Opportunity Housing Ordinance (OHO) Bloomington: Requires that 9% of units be affordable, tools and incentives to be used to go higher Provides tools and incentives: • Administrative: decreased parking, increased density, increased height, fee waivers, etc. • Financial: TIF, PBV, reduced land costs, housing trust fund, etc. • NOAH preservation with 4d Tax Classification

31. Bloomington Opportunity Housing Ordinance

33. Creating affordable housing – add ’l strategies • Land banking: city purchases/holds parcels; RFP for redevelopment • Providing financial assistance: tif, housing trust fund • Project basing HCV units • Partnering with land trust & affordable housing developers • Working with faith based organizations

34. Creating affordable housing - rental assistance • Mainstream vouchers • Family Unification vouchers • Kids in the Park - city funded shallow rent subsidy program • Stable Home - partnership with Hennepin county/income based rent subsidy for persons leaving shelters; funded with HUD HOME funds

35. Questions Bryan Hartman Program Manager City of Bloomington 952-563-8943 bhartman@BloomingtonMN.gov Michele Schnitker Deputy CD Dir./Housing Supervisor City of St. Louis Park mschnitker@stlouispark.org 952-924-2571