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<br /> metro/st t
<br /> www.startribune.com/metro * StarTribune Friday,March 29
<br /> An affordable house
<br /> gets pricier
<br /> Met Council increases its benchmark to$170,000 Affordability gets more expensive
<br /> By Jim Buchta mark will be used as a way to Hadley, commissioner of the
<br /> and Steve Brandt gauge the progress communi- Minnesota Housing Finance The Metropolitan Council has raised the definition of"affordable"
<br /> Star Tribune Staff Writers ties make toward their housing Agency(MHFA),which also re- -: housing to$170,000 from$134,250. Here is a look at median
<br /> goals under the state's Livable cently increased its new-home home sale prices since October 1999.
<br /> What does an affordable Communities Act. price financing limit for some >Monthly median sale prices(in thousands) January
<br /> new house cost these days? The standard says that a of its low-interest mortgage $200 -- --------------------+------_-_---------- - $175,000
<br /> $170,000. family of four that earns programs to about$200,000. '180
<br /> New definition
<br /> The Met Council's new deft- $61,360—80 percent of the ar- "It is a true statement, as .11_13 _�•
<br /> 160 — 1° C ' ",_' A,i..
<br /> nition of"affordable,"which to ea's median income of$76,700 much aspeople don't want to ; s �' k
<br /> some housing advocates is up- — should be able to afford a believe it,"Hadleysaid. Y n -' p G ' w r
<br /> 140 •.� .-, . r`. .
<br /> setting but not surprising, is $170,000 house. 120 ?' j,. ,, _ S •- v, r z ;((-' 'o ?'
<br /> based on steadyincreases in "It's a number that takes AFFORDABLE continues on B5: t4 • fi Old definition ,- • a-i s," t ^' .�` k tit.,,4;
<br /> homeprices and incomes. into account the realityofpro- —Housing crisis said to bear 9
<br /> 8 f 100 1999: , ,.rtv„ 2000te.F .t. 14;: :. . l kx2001 .,<.�� s.
<br /> The council's new bench- clueing new housing," said Kit worse than predicted. Source:Minneapolis Area Association of Realtors
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<br /> FRIDAY,MARCH 29.2002 METRO/STATE
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<br /> AFFORDABLE from Bi the supply and demand for af- easier for suburbs to meet the $120,000 in attached town-
<br /> fordable housing continues to affordable housing goals they home projects with no public
<br /> Met Council grow. By 2020, the metro area negotiated with the Met Coun- subsidy," he said. "The signal
<br /> will need 60,000 new housing cal under the Livable Commu- now is when it starts to get a
<br /> units beyond projected build- nities Act. little bit harder to meet afford-
<br /> head predicts ing levels, based on current But the council hasn't de- able goals,we're going to back
<br /> trends,he said. cided whether it will apply the off, even when it's clear that
<br /> the shortfall "We face a housing [short- same affordability standard other cities are meeting this
<br /> age) much greater than any- when it makes grants to cities goal."'
<br /> will increase one,even housing advocates in through housing programs es- Another council member,
<br /> their most strident moment, tablished by that law.That is to Frank Hornstein, said the new
<br /> ever predicted,"he said. be worked out in upcoming benchmark should serve as a
<br /> The MHFA based its new However, lie said, the new meetings. Council Member wake-up call to developers and
<br /> home-sale price limit on its de- guideline does not represent a George Garnett from north cities that prices have risen be-
<br /> termination that the average policy shift for the council, Minneapolis said the council yond the ability of most people
<br /> new house in the metro area which still is encouraging coin- still could give priority to own- to afford them. Hornstein has
<br /> now costs$245,000. munities and developers to er-occupied housing that been an affordable housing or-
<br /> The Livable Communities build houses for less than serves lower income levels. ganizer.
<br /> Act was implemented in 1995 $170,000. • But affordable housing ad- It's not clear, however,
<br /> as a way of reducing the con- "There is a concern that the vocate Russ Adams was upset whether the new benchmark
<br /> centration of poverty in inner suburban communities would with the council's action. I'm will result in more new afford-
<br /> cities by encouraging suburbs say, 'We have a lot of homes at just livid about it because of able houses. Some developers
<br /> to provide more affordable $170,000, and we don't need to the signal it sends," said Ad- say there still are too many bar-
<br /> housing. The law sets long- work to produce more units,'" ams, executive director of the riers to building them, even in
<br /> term goals for suburbs to in- Mondale said."That's not what Alliance for Metropolitan Sta- the$170,000 price range.
<br /> crease the number of owner- our policy will be— that's not bility. "Every time there's pres- Land prices are one of the
<br /> occupied and rental housing. the reality of what's happening sure,they cave in." biggest obstacles, said Jeff
<br /> Over the years, affordable out there." The alliance threatened this Schoenwetter, a land develop-
<br /> benchmarks have been adjust- Last year, the council could year to sue the council and er and board member of the
<br /> ed as home prices, incomes have increased its benchmark noncooperative suburbs, con- Builders Association of Minne-
<br /> and interest rates have to $165,000, based on robust tending that the council has sota.
<br /> changed. increases in median rents and authority under a 1976 state He said he's not a propo-
<br /> The Met Council's new home prices. However, for law to determine the region's nent of public subsidies to
<br /> benchmark for affordable rent consistency,the council decid- need for affordable housing build new housing but instead
<br /> is based on 50 percent of the ed to hold the limit at$134,250 and make sure cities have favors more flexible local regu-
<br /> metro area's median income. until the MHFA increased its plans to create it. But Mondale lations that would allow high-
<br /> For instance, a new two- limits. That happened last responded that legislators er-density housing and smaller
<br /> bedroom apartment renting month. would change the law if the lots,among other things.
<br /> for $862 to a family with in- The primary incentive for council tried to enforce it. "It's the only way we're go-
<br /> come of$38,350—50 percent communities to achieve their Adams said the higher price ing to get affordability," he
<br /> of the area's median income— affordable housing goals is a standard sends the wrong sig- said. "It's hard to argue with
<br /> would be considered afford- $12 million pot of state money nal to developers and suburbs the numbers."
<br /> •• able. that cities can use for a variety that argue they can't produce
<br /> Met Council Chairman Ted of purposes, including clean- owner-occupied housing for —Jim Buchtaisat
<br /> Mondale said some communi- ing up polluted lands and rede- the old standard of$134,250. jbuchta@startribruie.com.
<br /> ties are having trouble meeting veloping old strip malls. "That didn't stop Chaska
<br /> their affordability goals, and at The immediate impact of and Chanhassen from deliver-
<br /> the same time the gap between the change will be to make it ing units at $110,000 and
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