Minneapolis home program off to a slow start

Nearly one year after the city of Minneapolis asked developers to propose construction of 100 energy-efficient homes on the North Side, contractors have broken ground for only three of them.

All three of those new homes, plus another two on which construction will begin shortly, lie within a housing redevelopment cluster begun by the city five years ago in the Hawthorne neighborhood.

Meanwhile, some contractors for the 12 homes that were to be built in the project's first phase say it will be late summer before their work begins. That's despite a groundbreaking ceremony a month ago at which the city's development agency said the first phase would wrap up this summer.

Another 15 homes are still scheduled to be built even later this year, including four on lots vacated after tornado damage.

"I wish I could blame it on the weather," said Kathy Wetzel-Mastel, executive director of the Powderhorn Residents Group, one of the five first-phase developers, four of them nonprofit. She said her nonprofit's workload of rehab projects and getting a new city program running contributed to the delay. Plus, the two Harrison neighborhood lots her group will build on have poor soil conditions that require extra engineering. Wetzel-Mastel said she hopes to start work in the next month or so.

Matthew Day of TVM Development, the only for-profit developer, said he's waiting on a variance and projected a mid-August to early September start.

The Green Homes North project solicited proposals for new homes last July to repopulate some of the 400 buildable vacant lots on the North Side, including 20 in an area devastated by the May 2011 tornado. Many of the lots once held homes that were foreclosed on, then leveled.

The three latest lots on which construction has begun there involve Project for Pride in Living and Habitat for Humanity, nonprofits with whom the city has long-standing relationships. PPL plans to build three homes once two lots are replatted to accommodate them; it started construction on one this week, with two more to follow soon.

"It always takes a little longer than you think," said Chris Wilson, PPL's real estate development director.

The city judged the home proposals in part on their conservation features. But one house being constructed by Habitat for Humanity will take conservation features to an extreme: It will be a zero-use house, so called because the goal is that the amount of energy its occupants consume annually be no more than how much it generates through solar hot water and photovoltaic electricity that is sold to the grid when not needed. Other Habitat projects typically consume about $400 in energy costs annually, according to spokesman Matt Haugen.

He said Habitat won't know until the house is sold how much that technology will add to the financing gap for the house. "I think we're going to learn a lot from this," he said.

The initial 27 homes are expected to cost, on average, $61,500 more to build than they sell for because of their extra energy-saving features and the North Side's depressed home prices. That gap will be subsidized by $1 million assembled by the city, Minnesota Housing and the Family Housing Fund; Green Homes North offers an additional $2 million in interim construction loans. Much of the money carries the requirement that the home be sold to people earning no more than 15 percent above the region's median income, a cap of $96,500 for a family of four.