An employee-owned housing developer from Ohio is partnering with Project for Pride in Living (PPL), a Twin Cities nonprofit pioneer of affordable-housing and supportive services, to break ground this year on a 46-unit apartment building at N. Glenwood Avenue and Lyndale Avenue near the Minneapolis Farmers Market.
Shelby Commons, scheduled to open in 2022, was one of dozens of residential developments targeted at working-poor families that received a combined $195 million in partial financing from Minnesota Housing to create and preserve 2,387 apartments and single-family homes throughout Minnesota. Shelby Commons received nearly $1 million in housing tax credits toward the $16.4 million project.
The Minnesota Housing funding includes $100 million in housing-revenue bonds approved in 2020 by the state Legislature. James Lehnhoff, an assistant commissioner of Minnesota Housing, said total 2020 funding is a near-record $211 million in bond proceeds and other funds that will leverage $600 million in private-public spending for about 3,500 new-and-refurbished units statewide.
"We must increase affordable-housing options for Minnesotans across the state," Gov. Tim Walz said in December. "That has never been clearer … as we seek stable places to live, raise families and shelter from the virus.''
State and local governments have stepped up in recent years as the cost of rental housing has swamped the financial capacity of low-wage households. Minnesota Housing and developer partners are trying to relieve pressure on an estimated 536,000 families with household incomes below $50,000 who pay more than 30% of household incomes for housing.
Although the 2020 state allocation is down from $254 million in 2019, the last two years were a big leap from the three-year average of $98 million between 2016 and 2018.
The bulk of the state funds will finance multifamily housing, including $168 million to 33 projects that will either build new or preserve and renovate 2,000-plus apartments and townhouses at affordable rents. The agency also selected 40 projects that will create 400 single-family homes across the state. A $15.8 million allocation will help pay for new construction, down-payment assistance and renovation. Minnesota Housing also will fund 119 units to serve people with disabilities.
Ohio-based Woda Cooper Companies, a 30-year affordable developer-manager, is making its Minnesota debut through the Shelby Commons project with PPL on the Near North Side.
Woda Cooper will be the 75% owner. The units will be available to residents who make 30 to 80% of the Twin Cities median income.
The rents at Shelby Commons will range from $454 to $1,034 for one-bedroom units, depending upon household income, to $1,135 to $1,434 for three bedrooms. The Minneapolis average for a one bedroom is $1,276; a two is $1,685; and a three is $1,875, according to listing service Zumper.
In addition to a $3.7 million mortgage, Shelby Commons is using $12 million in low-income housing tax credits, the key federal tool to stimulate low-income housing. The credits are sold to affluent individuals and institutional investors who use them for up to 15 years to offset taxes owed. Woda-PPL is also receiving a $451,455 development fee over time.
Craig Patterson, a Woda Cooper senior vice president said his company agrees to leave the property as affordable housing for at least another 15 years after the credits are used.
"Having a strong nonprofit partner is important," said Patterson. "PPL is well-known as a building manager and job trainer and provider of self-sufficiency services."
Woda Cooper owns and operates more than 350 properties and 14,000 housing units valued at $1.5 billion. The firm operates in 15 states, including the Midwest.
PPL served 13,000 low-income people in 2019 through 1,600 rental units and career-training programs in health care, financial services and otherwise at starting wages of $15-plus, as well as other family-support services designed to lift people economically. PPL will maintain an office and provide residential-support services, including to residents of seven units who were homeless.
Chris Wilson, senior director of real estate development at PPL, said PPL paired with Woda Cooper because of Woda's strong track record and commitment to low-income housing, control of a good site near transit and downtown. And Woda assumed the preconstruction financial risk.
"Partnerships allow us to have more impact. It helps us get more people housed," Wilson said. "Woda demonstrated a solid commitment to supportive housing and providing the services necessary … to be successful. That's important to us.
"Though we are [only a 25%] partner, we were assured that we would be involved in the decisionmaking for the project, and we have been. They also were willing to take all of the predevelopment risk and allowed us an easy exit from the partnership if things don't go well."
PPL also is under construction with partner Clare Housing on a 42-unit, $14 million complex that is part of a commercial-residential development at Bloomington Avenue and E. Lake Street; a third stage of 46 apartments at the Anishinabe Wakiagun residential complex at Bloomington and E. Franklin with American Indian Development Corp.; as well as a complex of 70 temporary beds and 42 apartments at 27th Street and First Avenue in partnership with Simpson Housing Services.
Meanwhile, Commonbond Communities, the Midwest's largest affordable housing manager, said its inclusion in the recent round of state funding, as well as help from Washington County and the Minneapolis Affordable Housing Trust, enables it to proceed with nearly $80 million in four projects that total 258 housing units in Big Lake, Washington County, St. Paul and Minneapolis.
Neal St. Anthony has been a Star Tribune business columnist and reporter since 1984. He can be contacted at email@example.com.