Proposal to build green, mid-priced homes in Eden Prairie has skeptics

After an explosion of luxury home developments in Eden Prairie in the last few years, city leaders want to draw a project unlike anything else there: dense, medium-priced, single-family homes with lots of green, energy-efficient features.

From the early designs, leaders of the affluent southwestern suburb say the project would be one of the first in the region, if not the country, that combines green features with what the city calls "midmarket" homes selling for $240,000 to $360,000.

Others are skeptical that the project is even feasible and fear that the lower-priced homes could reduce the value of more expensive homes nearby.

In Minneapolis, a similar green initiative with homes that sold for no more than $200,000 is helping to revitalize the North Side, aided by a $1 million-a-year public subsidy.

While Eden Prairie's initial plans don't have a public subsidy, residents still worry that building moderate-income homes on 8 acres of land near Hwy. 212 won't fit in with their more expensive neighborhood and that it will add traffic to a dead-end street.

"Do I think there needs to be lower-level housing out there? No. Eden Prairie is known for having money here," said Jan Beck, whose back yard faces what is now a grassy field with deer and some trees. "It's too bad. There's no more prairie left in Eden Prairie."

A developer who will meet with the neighborhood this month argues that the 36 homes off Eden Prairie and Scenic Heights roads would fill a demand for moderately priced housing that's growing across the Twin Cities area, especially in the west metro.

"Eden Prairie kind of led the way on [dense housing] years and years ago … but we're still getting big houses on small lots," Eden Prairie Mayor Nancy Tyra-Lukens said.

Many new homes under construction in Eden Prairie are being sold for $600,000. In fact, there's a general shortage of entry-level houses on the market. Last month, for example, there were twice as many houses on the market priced from $456,000 and up than there were houses between $285,000 and $455,000, according to sales data from the Minneapolis Area Association of Realtors. Even fewer houses were priced at less than $285,000.

"As far as we know, we are unique in pursuing it," Janet Jeremiah, the city's community development director said of the green, moderately priced homes. "Hopefully, others will look at it and duplicate it."

Hopkins-based developer Homestead Partners and its Eden Gardens proposal have been informally selected by the Eden Prairie City Council, although no formal vote or developer's agreement has been approved yet.

Homestead has four developments in progress in Minnetonka and Eden Prairie, almost all of which have homes selling for more than $600,000.

But going green isn't cheap or easy.

Minneapolis' Green Homes North project has lagged behind schedule and cost more than expected because it took longer to get through the city approval process and some sites had poor soil.

Each home will cost about $90,000 to $100,000 more to build than what it will sell for to keep the price tag under $200,000 and to include green features, said Cherie Shoquist, project coordinator.

By Nov. 1, the city says, 27 of 100 homes in the five-year project will be under construction, aiming to revitalize the foreclosure-hit, tornado-torn North Side.

The project is subsidized by $1 million a year from the city, the Minnesota Housing Finance Agency and the Family Housing Fund; Green Homes North offers $2 million in interim construction loans.

Eden Prairie City Council Member Brad Aho argues that it's not possible to do this project at this pricepoint. While he said he supports green and midmarket housing, putting the two together is "conflicting."

He also worries it will set a precedent with the city as a facilitator, buying land owned by the Minnesota Department of Transportation for $950,000 and selling it to a developer.

"I don't like the city stepping into a role that I think is a private issue," Aho said.

Jeremiah, the community development director, said the city isn't at risk of being stuck with the land because the sale would happen on the same day. If the city weren't involved and MnDOT just sold the land to a developer, it likely would not be both moderately priced and green.

A formal plan with cost estimates is expected in November, to be followed by public hearings. If the city approves the project, work could start as soon as next spring.

"In an ideal world, we'd love to keep it undeveloped; it's why we bought the house we bought," said Kathryn Atterberry, whose back yard is next to the site. If it's developed, she said, she'd like it to be less dense and higher-priced. "Anything lower is just putting our housing in a worse light."

Beck, who has lived there for more than 20 years, agrees. She said new housing should reflect their neighborhood, with home prices from $300,000 to $550,000 — not lower-priced starter homes.

"If you're putting a $100,000 less [priced] home next to higher ones, who's going to lose?" she said.

There's one possible solution. To offset the expense of green, midpriced housing and to alleviate concerns over property values, Homestead's Bona said the developer could build 12 higher-end market-rate homes (to be sold for more than $360,000) along the perimeter of the development. The other 24 would still would sell for $240,000 to $360,000.

That would help, Beck said, but she's still leery of the plan.