The North Loop neighborhood is slated to get some much-needed low-income rental housing. Schafer Richardson , a prolific North Loop developer, received preliminary bond approval today from the city to help finance the transformation of the former Cameron Transfer and Storage company Building at 756 N. 4th St. into 44 units of "affordable" workforce housing. In addition to those bonds, the project will also be financed primarily with historic tax credits. Tod Elkins, Urban Works Architecture, is the architect of record on the project.
The hulking and neglected four-storybuilding is in the heart of the popular North Loop neighborhood and alongside three condo buildings built during the past decade. Most recently known as the Dial Building, the concrete structure was built in 1909/1910 as a cold storage facility. It's been vacant for the past dozen years, but will undergo a top-to-bottom renovation, including a new roof, windows and tuckpointing. The building will have a fitness center, bike storage, outdoor patio/grill area, laundry and surface parking.
The building will be transformed into 44 studio, one- and two-bedroom apartments for people who earn 50 to 60 percent of the area median income. Because the latest wave of development in that area has been mostly market rate luxury rentals, there's a serious and growing shortage of inexpensive housing in the area that's affordable to many of the working class people who work service and retail jobs in the shops and restaurants in the area. By the end of last year the average rent in the area was more than $1,400, nearly 10 percent higher than the year before, according to Marquette Advisors.
What's next? The City Planning Commission has already approved the development plans, and at a Minneapolis Department of Community Planning and Economic Development public hearing this afternoon (3/8/14) preliminary approval was given to the developer's request for up to $7.5 million in tax exempt multi-family housing entitlement revenue bonds. Final approval is pending another meeting in late spring or early summer.
Also, the developer hopes to have the building named to the Naitonal Register of Historic places because of its connection to an internationally known engineer from Minneapolis named Claude Allen Porter - he patented the "mushroom cap" reinforced concrete structural system.That designation will make the building eligible for those historic tax credits, which are aimed at helping subsidize the cost of renovating historically significant buildings.
Rising home prices have put a serious dent in the number of people who owe more than their house is worth in the Twin Cities and beyond. During the fourth quarter of last year 10.2 percent of all people with a mortgage were underwater, according to CoreLogic, a national real restate research firm. That's down from 16 percent last year, but up very slightly from the previous quarter.
Nationwide, nearly 6.5 million homes, or 13.3 percent of all residential properties with a mortgage, were still in negative equity territory at the end of last year.
Negative equity happens when house prices decline and/or when mortgage debt increases. Across the country,the national aggregate value of negative equity was $398.4 billion for fourth quarter 2013, compared to $401.3 billion for third quarter 2013, a decrease of $2.9 billion.
Here's Mark Fleming's, CoreLogic's chief economist, take on the situation: "The plight of the underwater borrower has improved dramatically since negative equity peaked in December 2009 when more than 12 million mortgaged homeowners were underwater," he said "Over the past four years, more than 5.5 million homeowners have regained equity, reducing their risk of foreclosure and unlocking pent-up supply in the housing market."
Keenan Raverty, a vice president at Bell Mortgage, is the new president and chairman of the board of the Minnesota Mortgage Association (MMA), a trade group that represents thousands of mortgage professionals statewide.
Raverty is currently the chair of the MMA Government Affairs Committee and sits as a member of the MMA board of governors. Raverty is also a past president and board chair of the Mortgage Bankers Association of Minnesota and the Mortgage Association of Minnesota (MAM), where he has worked for over five years.
The MMA was formed in 2007 when the MAM and the Minnesota Association of Mortgage Brokers merged.
Bell Mortgage is a division of Bell State Bank and Trust Bell Mortgage and is Minnesota’s oldest and largest privately-owned mortgage-banking company. Raverty lives with his wife and four children in North Saint Paul.
Despite the construction of thousands of new apartments in the Twin Cities metro, rents have risen at the fastest rate in a dozen years. That's according to a 2nd-quarter "2x4 Report" from the Minnesota Housing Partnership, which shows that rents have increased 8.5 percent in the last three years, and now average $979 per month.
Here's a link to a story that I wrote last month about the overall state of the metro-area rental market, including detailed vacancy and rent prices.
I'll be covering this topic in the coming days, and would love to hear about your experience in the rental market. Are you a renter who has had to move, or make other adjustments, because your rent has gone up? Or did you find that rents were so high, you decided to buy instead? Send an email to firstname.lastname@example.org.
- Jim Buchta, residential real estate reporter.
They're renting them as fast as they can build them. That's the take-away from the latest Marquette Advisors report, which shows that the average vacancy rate in the Twin Cities metro stood at 2.7 percent, up only slightly from 2.3 percent last year. That's despite the absorption of more than 1,000 units during the quarter. Low vacancies mean higher rents. The average rent price in the metro was $951, up 2.8 percent from last year.
With more than 14,000 units planned for the metro, how long will vacancy rates remain so low? I'm trying to find an answer to that question - check out my story in the Saturday paper.
Extreme weather conditions in Minnesota are having a big financial impact on the family budgets across the state, according to a variety of sources, mostly in the way of much, much higher homeowner's insurance premiums. If the premium you pay on your homeowners insurance policy has taken a big jump recently, call my colleague Jennifer Bjorhus - she'd love to hear your story. She's at 612-673-4683.