A troubled home is sold on the North Side

  • Article by: MAYA RAO , Star Tribune
  • Updated: January 27, 2014 - 2:21 PM

After a decade of rentals, fire and foreclosures, 1611 Hillside Avenue is sold again.

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Nearly a decade ago, 1611 Hillside Av. in north Minneapolis sold for $290,000. Last month, it sold for $45,000 to a California investor.

Photo: Richard Sennott • richard.sennott@startribune.com,

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The century-old duplex in north Minneapolis is locked and empty. The front window is cracked. A neighbor says only teenage squatters lived there in the last year, since a blaze displaced 24 people that had been crowding into eight bedrooms.

Last month, the home sold for $46,500 cash to a California investor after languishing for months on the market. It is the latest sale in a tumultuous journey that began nearly a decade ago, when the duplex sold for $290,000 and then endured two foreclosures, an investor that went belly-up, a chain of Wall Street bank trustees, and placement on the city’s vacant building registry after the fire rendered it uninhabitable.

The fortunes of the housing market in north Minneapolis are reflected in the tortured history of this home at 1611 Hillside Av., still scarred by fire. The surrounding Jordan community hosts more vacant homes than any other neighborhood in Minneapolis, and here a vacant home typically means an investor is its only way out.

Even as the housing recovery is taking hold throughout the metro area, progress in the neighborhoods of north Minneapolis has been slower. Homes that are in foreclosure or at risk of foreclosure represented about 45 percent of all transactions in 2013, almost twice the rate across the metro area.

Some neighborhoods, such as Willard Hay and Near North, saw significant gains in median sales prices in 2013 as investors swooped in to take advantage of some of the lowest-cost housing in the metro area. But in Jordan, home of 1611 Hillside, the median sales price fell nearly 9 percent from 2012.

“The housing market is rebounding, but there are pockets around Jordan that continue to struggle where homes are in somewhat challenged conditions and the price is right for an investor to come in and buy it, fix it up to minimal standards, rent it and make a lot of money,” said Minneapolis housing director Tom Streitz.

City officials and housing advocacy organizations have poured millions of dollars into housing assistance programs, including down-payment assistance and low-interest rehab programs. Increasing the number of owner-occupied homes has long been seen as the best means to improve the overall quality of life on the city’s North Side.

But the cycle that has prevailed here — vacant homes, bought by investors, rented to people with little interest in the neighborhood ­— is still in full force.

“They drive up with them big rental trucks and they’re in,” said Jerry Millner, who lives on the 1600 block of Hillside. “Two months later they drive up with a big rental truck and they’re out.”

Debra Wagner, an agent with Greenway Homes Realty who lives in Jordan, said that she has worked with a range of people to buy homes in north Minneapolis, from single women to empty nesters, who want more for their money after the housing crisis. But as long as homes are “undervalued” in the area, she said, investors will continue to come in.

And taking a home off the city’s vacant and boarded registry often means bringing a building back up to code, a process that could prove too costly for a first-time home buyer.

“Most people coming in to buy a house buy a house to live in,” Wagner said.

The number of homeowners in Jordan dropped by about one-third between 2000 and 2010. While the number of renters also dropped slightly, so many people left the neighborhood altogether that the makeup of homeowners vs. renters is now equal.

“The proportion is off-kilter,” said former longtime council member Don Samuels, who lives a block from 1611 Hillside. He has repeatedly advocated for higher ratios of people who own their homes as a way of improving the neighborhood but acknowledges that people want to live somewhere with less crime and better schools.

Foreclosed, then condemned

Aging homeowners dominated the 1600 block of Hillside when Mary Caesar moved in 38 years ago. But as they died off, she said, the buildings shifted hands to investors with rental licenses. Crime, vandalism and troublesome tenants took over. Now two-thirds of the homes there are rentals.

In recent years, the house next door to 1611 went into foreclosure, as did the one across the street. Another neighboring home is owned by Mahmood Khan, a controversial landlord from Roseville who has tangled with the city over thousands of dollars in housing violations. On the next block over, near Samuels’ home, a mansion set to be demolished was rescued last year by Nicole Curtis, host of cable show “Rehab Addict,” though it still has boards over the doors. And the city is still trying to unload a vacant parcel of land nearby for $5,000.

Foreclosure proceedings began a year after a man bought 1611 for $290,000 in 2005.

It was auctioned off to the lender for $80,000, who then passed the property on to JPMorgan Chase Bank. After a year of going through bank trustees, Pamiko Properties nabbed the duplex with a mortgage from Minnwest Bank Metro as part of a broader investment in dozens of North Side residences.

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