Columbia Heights teardowns attracting new wave of buyers

It's a middle ground in the city-vs.-suburb debate.

For several young families, buying a newly built home in Columbia Heights strikes the right balance. The established inner-ring suburb borders northeast Minneapolis, so there's a taste of both worlds.

The city's Economic Development Authority is fueling the trend. The agency spent nearly $1 million to buy about 17 tiny and dilapidated houses — usually an eyesore with about 600 square feet of living space. The city tore them down and hired TimberCraft Homes in 2013 to build new houses. The goal was to entice a new generation of home buyers. The city is losing money on the deal but leaders say it's a critical investment in neighborhoods.

The move is also keeping some of the most rundown housing stock out of the rental market. All buyers must agree to keep the home owner-occupied for 10 years.

So far, the city, using agents from ReMax Synergy, has sold five of those homes. Another sale is pending and four more lots ready for building are available.

Realtor Peter Heryla, who is selling the homes along with business partner John Rockwell, described demand as strong. He said the new homes in the shadow of Minneapolis are attracting young buyers who want it all — city living with suburban features, including several bathrooms, modern kitchens and two-car garages.

"We've gotten quite a few (buyers) that have come from northeast (Minneapolis) and found Columbia Heights a few blocks east," Heryla said.

Home prices, which started at $170,000 a year ago, now range from $180,000 to $225,000, depending on upgrades.

Newlyweds Missi and Tyler Franzen, both 29, were the first to buy into the program. They've now been in their new Craftsman-style home for a year and say it hits the right note for their lifestyle.

Missi Franzen is a corporate trainer who works at home but occasionally drives to her company's Richfield office. Tyler Franzen is a musician and promoter who works primarily in Minneapolis.

The new home has character, modern amenities and more space than most of the existing house stock nearby. Their neighborhood feels established and safe, with plenty of green space.

"I wanted to have a neighborhood and a yard," Missi Franzen said.

The Franzens' blue two-story has white trim and a red door. The traditional look of the home and a large mature tree in the front yard help it blend into the block of neat bungalows.

The house is one of the biggest on the block — 1,600 square feet, including a finished basement, with four bedrooms and three bathrooms. The main floor is open concept, which was a must-have for this young couple.

"I was surprised we could build this nice of a house for what we paid. We are proud to live here," Missi Franzen said.

They did look at some of the original homes in the area, built between the 1920s and 1950s, but felt intimidated by the amount of work needed to make them modern and comfortable.

The couple said it's fun to invite friends over and see their surprised reaction at what the Franzens have found in their price range so close to the city.

One day last week, they gave a tour of their new home, pointing out upgrades.

"All the closets had to have six-panel doors," said Missi Franzen, explaining that folding doors seemed clumsy and not in keeping with the feel of the home.

"The kitchen is my favorite part," she said.

Not far from there, Jess and James Dreischmeier and their 1-year-old son, Billy, moved into their new home in November. It's a 2,000-square-foot custom-built rambler with a walkout basement. The Dreischmeiers are selling their former home, also in Columbia Heights. They wanted more space but wanted to stay in the area, and with a young child at home, they wanted an open concept, hardwood floors and lots of lights.

They noted the pluses of nearby northeast Minneapolis — an up-and-coming area, vibrant social scene, close to downtown — and said that "in Columbia Heights, we have access to all that, but it's just that much more affordable."

Jess Dreischmeier, who is earning her master's in art therapy also likes the neighborhood aesthetic.

"Part of the reason we like living in the city is we like the quaint neighborhoods with cute, smaller houses. I like having an alley without the garage on the front of the house. There are mature trees and character."

Shannon Prather • 612-673-4804