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Elk River Comprehensive Plan <br /> Maintaining Neighborhoods <br /> Existing neighborhoods, particularly older ones, are an <br /> important part of the fabric of the community. These <br /> neighborhoods define the character and the heritage <br /> g of Elk River. Older neighborhoods provide lower cost <br /> housing than new developments. Maintaining housing <br /> quality in these areas is an essential part of providing <br /> affordable housing. <br /> OK �OVTH <br /> T - _ There are several aspects of maintaining <br /> neighborhoods. One of the desired by-products of <br /> u, building strong neighborhoods and community is pride <br /> in property. This sense of pride leads to a personal <br /> value in the maintenance of buildings and grounds. All <br /> mat R other approaches are more difficult when maintenance <br /> A is not important to the property owner. <br /> Economics is part of the maintenance equation. As <br /> more income is required simply to obtain housing, less <br /> .X funds are available to pay for maintenance activities. <br /> i Current low interest rates help this situation by making <br /> home equity loans more affordable. Higher interest <br /> rates not only reduce the affordability of debt for home <br /> improvements, but require more income for the same <br /> housing. <br /> Similar constraints apply to rental housing. The <br /> ability to finance building maintenance comes from <br /> rent income. If the ability to charge an adequate rent <br /> is constrained by market forces, then maintenance <br /> activities get deferred. <br /> In considering Historic Preservation and neighborhood <br /> revitilization projects, there is a difference between the <br /> correction of deferred maintenance and the correction <br /> of functional obsolescence. Programs developed to <br /> address housing and preservation goals must recognize <br /> this distinction, and the cost of each in the long term. <br /> The City will assess its involvment with such projects <br /> on a case by case basis. <br /> Market Gaps <br /> Market forces are not likely to fill all housing needs in Elk River. Gaps in the operation of the housing <br /> market point to potential public roles. Market gaps tend to change over time with demographic and <br /> economic changes in the community. City housing initiatives should focus on identifying these gaps <br /> and determining the appropriate responses. Gaps may relate to the need for specific types of housing. <br /> Gaps are also linked to mortgage financing and market conditions. An ongoing concern is the down <br /> payment and other factors needed to qualify for a mortgage loan. The city and local banks can pursue <br /> programs to promote homeownership. <br /> Finally, the physical deterioration of structures often creates a barrier to private investment. Rather than <br /> fix the problem, the market avoids the unit. If unchecked, blight may spread to adjacent properties. <br /> 82 / Chapter 7: Housing <br />