Housing For All

FREQUENTLY ASKED QUESTIONS ABOUT AFFORDABLE HOUSING

What, exactly, is affordable housing?

Let’s start with a definition. In laymen’s terms, affordable housing, also referred to as workforce housing and lifecycle housing, is housing that:

is decent and safe and costs no more than 30% of a family’s gross income,
blends seamlessly into the market-rate housing in the community,
allows people at any stage of life and any income level to live in our community, and
gives its residents the same things we all want for ourselves: a safe, stable, affordable place to live and raise a family, access to job opportunities and good schools, and the chance to be part of a healthy community.

For a more formal federal definition of affordable housing, see NOTE at the end of this section.

Why is affordable housing so important?

There are many reasons why it is important that Maple Grove and the northwest suburbs have less expensive housing options available.

It is important for economic reasons. Currently, there is insufficient workforce housing available in Maple Grove and its surrounding communities for low-to moderate-income workers. To maintain a healthy growing pace, cities need affordable workforce housing so that businesses can find workers and people can live near where they work.

Nowadays, it is not true that anyone with a job can afford a decent place to live. The reality is that average earnings in the Twin Cities are well below what a family needs to purchase decent, safe housing. Jobs paying less than $11 an hour are among the fastest growing industry segment, but you need to earn $17 – 25/hour to purchase a $150,000 home, few of which are currently available in Maple Grove and the northwest suburbs. And the people affected by this – retail salespersons, food industry workers, bus and truck drivers, librarians, teachers, construction workers, clergy, police officers – are among those most needed to support our infrastructure and grow our community.
It is important for humanitarian reasons. Children living in unstable, unsafe housing are more likely to suffer chronic health problems, have developmental delays, and perform poorly in school, increasing the need for social intervention and humanitarian government programs. Families who pay too much for housing have too little left over for other necessities such as food, clothing, health- and child-care and transportation. When our children suffer, our future suffers.
Unfortunately, children are the fastest-growing segment of the population affected by unstable housing.
It is important for personal reasons. The lack of affordable lifecycle housing means that your son, who just graduated from college with a business degree, can’t afford to live here. Neither can your sister, a recently divorced mother of two young children. Or your retired parents who have been in this area for two decades but are now downsizing and living on a fixed income. And these young working professionals probably can’t afford a starter home here, either: your daughter’s third grade teacher, the police officer who answered your 911 call, the nurse who gave you your flu shot, the radiology technician who plans to work at the new hospital in Maple Grove.

Who needs affordable housing?

The reality of who lives in a an affordable housing residence in a Maple Grove neighborhood today would probably surprise most people. Lower- to moderate-income families – who typically can not afford market-rate housing – can include:

full-time workers in low-wage jobs,
new college graduates,
young professionals,
young families with children or single-parent families,
seniors on limited or fixed incomes,
and people with disabilities.

All kinds of people – including bus and truck drivers, librarians, teachers, child care workers, clergy, firefighters, police officers, construction workers, retail workers – would benefit from the availability of more lifecycle housing in our community.

The following example illustrates the kind of person who would have difficulty finding a place to live in Maple Grove that would be within their means.

Cassie is a hard-working single parent works in Maple Grove. She has a college degree in elementary education and is a third grade teacher for the Osseo School District. She has a seven-year-old daughter in second grade and a four-year-old son in day care and wants to live in the city where she works.

Her starting salary for the 2006-07 school year is $34,004. In order to have enough money for food, clothing, health care and transportation, she should spend no more than 30% of her income on all aspects of housing. (Industry Standard)
30% of $34,004 = $10,201 annually, or $850 per month, for housing expenses.
The going rate for a three-bedroom apartment in the western Hennepin County suburbs is $1,194 per month. It would take an annual salary of $47,760 to afford $1,194 per month for rent. (Rent x 12 divided by 30 x 100 = necessary salary.)

The lowest priced home in Maple Grove right now is a two-bedroom townhome on Magda Lane. It is priced at $124,900, and total payments for a 30-year fixed-rate loan would be about $995.51 per month, which includes taxes and townhouse association fees. This teacher’s family could not afford this.

There are about 35 townhomes in Maple Grove for sale under $160,000. Only a few of them have three bedrooms. Payments for a $160,000 townhome would be about $1,300, which includes taxes and association fees.

It would be nearly impossible for a single-income person to purchase a home in Maple Grove with an income of less than $52,000 per year.

What will the existence of affordable housing do to my property value?

It is a common misperception that affordable housing developments reduce surrounding property values.

The reality, however, is different. A study of affordable rental developments built in the 1990’s in eleven Twin City suburbs yielded surprising results. When researchers compared home sales prices in those neighborhoods before and after the developments were built and also looked at comparable homes elsewhere, there was little or no evidence to suggest that the construction of affordable rental housing hurt area home sales. In fact, in a study in Minneapolis, non-profit-owned affordable housing actually had a positive effect on nearby property values. This data is consistent with nationwide studies.

NOTE

The federal, more formal definition of affordable housing stipulates that the acceptance of a rental application for an affordable unit is based on (listed in order of priority):

Income: Rent can be no more than 50% of an applicant’s monthly income, and income can not exceed the current federal government guidelines.
Family: A family is defined as “two or more persons sharing residency whose income and resources are available to meet the family’s needs and who are related by blood, marriage, or operation of law or who give evidence of a stable relationship which has existed over a period of time.”
Family size: In a two-bedroom unit, a minimum of two people and a maximum of four people are allowed; in a three-bedroom unit, a minimum of three people and a maximum of six people are allowed. There must be at least one adult aged 18 or older in each unit.
Rental history: An applicant may be disqualified for admission because of late rental payments, unlawful detainers or evictions, complaints of disturbances, damage to the unit or appliances or common areas, poor housekeeping habits (including fire hazards), or less than six months consecutive rental history (not including rental from relatives).
Credit history: An applicant may be disqualified for such reasons as nonpayment of rightful obligations (including rent, utilities, creditors, loans) or public judgments.
Criminal history: An applicant may be disqualified for such reasons as conviction of a felony, conviction within the last five years of a crime of violence against people or damage to property, conviction for drug offense within the last two years, or an established history of untreated drug or alcohol abuse.
Employment history: Applicants must have been employed at least one year with their present employer.
Any information provided on the application which is misrepresented, incomplete or non-verifiable is grounds for disqualification.