A new apartment building in Minneapolis is one step in filling an enormous market need

After prison, Matthew Koller spent nearly a year in a halfway house where he was in a work-release program. Getting a full-time job was no issue, but finding stable housing was nearly impossible.

Koller earns enough to afford a decent apartment, but his criminal record scares off landlords. "For a guy who has a felony record, it's hard to find anything," he said. "I was getting denied left and right."

Last week, Koller moved into the new Amber Apartments building in Minneapolis, developed by RS Eden, a decades-old nonprofit organization whose operations downtown also include a treatment center and transitional housing facility.

The $18 million building has 80 rental units that qualify as low-income and low-barrier housing. More than 800 people applied to be among the first tenants.

In addition to providing "deeply affordable" housing, RS Eden aims to serve people who might not otherwise qualify for an apartment regardless of their income. That includes people who have criminal records and substance-abuse issues.

"It's the next step in the housing continuum," said Caroline Hood, president and CEO of RS Eden. "We're trying to keep people moving toward independence and self-sufficiency."

Of the 80 units in the building, 55 are considered "affordable." That means residents can't earn more than $36,750, which is 50% of the area median income (AMI), and rents are either $566 or $750, depending on the size of the unit.

Three of the apartments in the building, including the one Koller just moved into, rent for the current market rate ($900) and don't have any income limits. There are also 22 apartments with no income restrictions that cater to people who need support services.

On the same day the Amber opened and Koller moved into his apartment, RS Eden closed on the purchase of three parking lots in downtown Minneapolis. The acquisition, Hood said, is to expand its services to people on the margins, and the need is only deepening.

Many renters who live in low-income housing, Hood said, are able and willing to get better-paying jobs or increase their hours but sometimes don't because the additional income means they might get disqualified for their subsidized rental. At the same time, that additional income, she said, is often not enough to afford even the most affordable market-rate rents.

"There are people out there who trickle back down to homelessness, these are people who fall through the cracks," she said. "And we really wanted to have units that weren't income-dependent and dependent on government subsidy."

Earlier this month, the Minnesota Housing Partnership released a report that said nearly a quarter of all renters in Hennepin County are severely rent burdened, meaning they spend 50% or more of their income on housing.

To help provide more affordable housing in the east metro, last week, the city of St. Paul and Ramsey County said they planned to use more than $74 million of federal American Rescue Plan Act (ARPA) funding to build and maintain deeply affordable housing.

That includes the city's commitment of $37.5 million for about 1,000 units of permanent housing that's affordable to people who earn "30% of AMI Income" and an additional $37 million from the county. The package is being called one of the largest uses of federal relief dollars in the nation for affordable housing.

Several other nonprofits are also trying to meet the needs of people who are difficult to house. Barb Jeanetta at Alliance Housing said the organization has a six-story, 64-unit building project under construction at 33rd and Nicollet Avenue.

It will have a mix of studio and one-bedroom apartments aimed at low-wage workers, including some that are designated for people at 30% AMI and others at 50% AMI. Twenty units will be for people leaving long-term homelessness and will come with supportive services provided by Minneapolis-based Avivo.

And Clare Housing said that in May the organization partnered with Project for Pride in Living on Bloom Lake Flats, a 42-unit supportive housing project in south Minneapolis. The building will house adults and families, mainly those who are extremely low income and from minority communities, who are living with and affected by HIV.

Hood said that for the sites her organization recently acquired, she hopes to expand housing options and create a more modern and healthy campus for those who are dealing with substance abuse and other issues.

"How do we make this a campus for recovery and to support people on their journey?" she said. "Our treatment center is exceptionally old and has done right by so many people, but I want to build a treatment center that is less institutional and more about healing and recovery."

Hood said that if her experience with Amber Apartments is any indication, that project could take years. Though construction of the Amber took only a little more than a year, RS Eden acquired the 1-acre site about five years ago.

For Koller and other people with challenges market-rate developers won't be able to solve, stable housing is key to achieving other goals.

"My next move would be to buy a house," he said. "This is a good stepping stone for that."