Affordable housing for veterans is on the way to Minneapolis

A n unusual kind of affordable housing aimed at providing a "next step" for homeless veterans has proved so popular that 80 more units have been proposed for federal land near the Minneapolis VA Health Care System.

The 140-unit Veterans and Community Housing development, south of E. 54th Street between Minnehaha and Hiawatha Avenues, was built in 2006 and has been deemed a success in its mission of providing safe and sober housing for formerly homeless vets at rents as low as $415 per month.

Now its operator, the Minneapolis-based nonprofit Community Housing Development Corp. (CHDC), is floating plans for an $11 million second phase called Veterans East elsewhere on the site, which is owned by the Department of Veterans Affairs, and has secured federal backing as well as the support of Hennepin County.

Bill Gabler, a consultant for CHDC, said the 80 units have been proposed just to the south of one of the seven-year-old buildings, which were financed through a state bonding bill.

They're needed because it's estimated that there are as many as 700 homeless veterans on the streets in Hennepin County and the current units have a waiting list of 150 prospective tenants.

"Around two-thirds of the units are occupied by veterans, and the rents are very affordable," he said. "I don't know if it's because they're vets and they're used to taking care of their barracks, but when you go through that place it looks brand new.

"I've worked on a lot of affordable housing in my career and I wish it all looked as good as these apartments do after six years of occupancy."

Unlike some types of affordable housing, they do not provide on-site social services, giving them more of a feel of market-rate apartments, and tenants live in an unstructured community with private, 450-square-foot apartments.

But at the same time they're right cross the Blue Line light-rail tracks from the VA hospital, within easy walking distance of health and social services when they're needed.

Residents who obey the rules prohibiting alcohol and drug use tend to be long-term renters, said property manager Laura Van Hoover of BDC Management Co.

She said one of Veterans and Community Housing's success stories has been how the formerly homeless residents have blended into the Nokomis neighborhood around the VA center, which will help when CHDC eventually seeks city approvals for the new units.

"I think we've proven to the community that we're an asset and that none of the issues the neighborhood had with affordable housing when these units were built have materialized at all," Van Hoover said. "In the years since, they've had nothing but kind things to say."

Its first hurdle is to be approved for deferred loans and housing tax credits by the Minnesota Housing Finance Agency. Last year the state agency provided an $8.5 million bridge loan for the renovation and conversion of five historic buildings at nearby Fort Snelling into rental housing for homeless vets by CommonBond Communities.

Another potential roadblock is the complicated way in which the ownership of the buildings is structured. The land is owned by the VA, which has an "enhanced use lease" with Hennepin County. The county's Housing and Redevelopment Authority owns the buildings and in turn, leases them to CHDC.

Thus, the project will also need the time-consuming approval of the Department of Veterans Affairs in Washington.

But Steve Challeen, an engineer at the Minneapolis VA, says the Veterans East proposal has the backing of U.S. Secretary of Veterans Affairs Eric Shinseki.

"His No. 1 priority is the elimination of homelessness," he said. "We've gotten the full support of the central office on this project. Our only task here on the front line is to figure out how to wedge it into the tight space we have there."