On Tuesday, November 18, the McKnight Foundation and Minnesota Housing co-hosted the MN Challenge Public Meeting: Moving Forward with Promising Ideas. The event gave MN Challenge participants the opportunity to discuss the progress that has been made in the last year and what still needs to be done. Tim Thompson of the Housing Preservation Project discussed work by the team that won the MN Challenge idea competition. The work thus far to address local regulations that increase the cost of housing has included the identification of best practices in: site selection, parking, the administrative process, and mixed-income housing and inclusionary zoning.
The event also highlighted the just how powerful the act of starting a conversation on cost-effectiveness can be. The creation of the MN Challenge has led to partnerships, conversations and efforts that have extended beyond the framework of the competition itself. To highlight just a few examples:
Deirdre Smith of CommonBond Communities presented research and data analysis developed in coordination with the McKnight Foundation on preservation opportunities for the naturally-occurring (unsubsidized) affordable housing stock in the Twin Cities.
A working group is exploring the possibility of implementing a Minnesota version of the MassDocs system, which lowers legal and closing costs for secondary sources of financing by consolidating the legal documents. Minnesota Housing will be contacting local stakeholders seeking expressions of interest in participation as a next step.
A working group has been organized to explore the possibility of lowering the amount of upfront capitalized reserves necessary through an insurance product or risk guarantee. This product could be similar to the Massachusetts Housing Reserve Assurance Program.
While these conversations highlighted some of the difficulties inherent in instituting change across a complicated system, they also spurred a great deal of innovative thinking to address these shared challenges. To move from discussion to implementation will require significant effort, but the MN Challenge has built the motivation and facilitated the cross-sector engagement needed to move these initiatives forward.
For more information on how you can help end housing insecurity through Bending the Cost Curve, contact Michael A. Spotts, Senior Analyst-Project Manager at email@example.com.
CENTER FOR URBAN AND REGIONAL AFFAIRS WINS MN CHALLENGE
The co-sponsors of the MN Challenge are pleased to announce that the Center for Urban and Regional Affairs’ proposal to “Address the State and Local Regulatory Cost Drivers” has been selected to receive up to $70,000 for implementation to help reduce the cost of affordable housing in Minnesota.
The MN Challenge to Lower the Cost of Affordable Housing is an idea competition co-sponsored by Minnesota Housing, the McKnight Foundation, Urban Land Institute of Minnesota (ULI-MN)/ Regional Council of Mayors (RCM), and Enterprise Community Partners. The goal of the MN Challenge is to support innovative problem solving from interdisciplinary teams of housing professionals.
“The MN challenge was created to spark new ideas in a strong system that must adapt to a changing housing environment. We are excited to have this team pulled together and new platforms from which to raise housing policy issues that will help our communities provide more affordable and sustainable homes and neighborhoods in our region.” -Eric Muschler at the McKnight Foundation
“We hope that the MN Challenge will serve as an inspiration to stakeholders across the country to engage in proactive efforts to identify innovative strategies that maximize the effectiveness of affordable housing resources.” -Michael Spotts, Senior Analyst at Enterprise Community Partners
The Center for Urban and Regional Affairs (CURA) is a program that connects the resources of the University of Minnesota with the interests and needs of urban communities and regions for the benefit of all. The team, which includes Tim Thompson and Jack Cann of the Housing Preservation Project, Edward Goetz of CURA , and Stacy Becker of Becker Consulting, will receive up to $70,000 for concept implementation.
The winning team will produce best practice recommendations in local regulations that encourage affordable housing and reduce barriers tailored to specific communities as well as for integration into regional planning documents and processes.
Read more about the announcement on the Enterprise Community Partner Blog.
PHASE II CANDIDATES SELECTED
We are pleased to announce the three teams selected by a panel of representatives to participate in Phase II of the MN Challenge to Lower the Cost of Affordable Housing. These Phase I ideas will move into Phase II and each will be provided up to $10,000 to more fully develop specific strategies to lower the cost of affordable housing. These ideas will be presented at the University of St. Thomas Annual Affordable Housing Summit on May 8, 2014. The final award-winning idea will be announced at the ULI MN/Regional Council of Mayors Annual Housing Summit on June 5, 2014.
1. PROJECT FOR PRIDE AND LIVING and partners will pursue a strategy of “Right-Sizing Reserves”.
“In lieu of large project reserves, provide the Limited Partner with a guarantee for some portion of the reserve amount. The guarantee could be provided by Minnesota Housing, an insurance company, a foundation, or an investor. The guarantee would likely need to be a cash equivalent in order to be acceptable to the Limited Partner, so the risk would need to be borne by the guarantor. The guarantor could use a portion of the cost savings to collateralize the guarantee across the entire portfolio. Ideally, anything left over could be taken as a cost savings to the project. Alternatively, the remainder could be invested to yield a more robust return than the basic bank rate with some portion of that increased yield returning to the project.” --Right Sizing Reserves proposal
2. CENTER FOR URBAN REGIONAL AFFAIRS and partners will pursue a strategy of “Addressing the State and Local Regulatory Cost Drivers.”
“We propose a three-stage program for addressing the state and local regulatory cost driver. First, we will identify and summarize best practices at the state and local levels for reducing regulatory and permitting barriers to affordable housing. There is a significant national database of initiatives that can provide examples for possible implementation here, as well as the Affordable Housing Toolkit established by ULI Minnesota. Second, we will conduct an analysis of where a more complete adoption of best practices is likely to have the largest effect on the production of affordable housing, particularly those suburban cities with the largest future affordable housing goals. Finally, we will take advantage of the fact that the Metropolitan Council of the Twin Cities is currently drafting a Regional Housing Policy plan, which is a vehicle that could implement regulatory reforms and create incentives. —Addressing the State and Local Regulatory Cost Drivers proposal
3. MSR ARCHITECTS, WATSON FORSBERG, and PROJECT FOR PRIDE AND LIVING will partner to pursue a strategy to “Create Building Archetypes.”
“We are proposing the creation of an affordable multi-family platform which would in essence “pre-design” about 75% or 80% of the building. Unit layouts would be standardized as would wall and floor sections. Mechanical, electrical, low voltage, and plumbing systems and layouts would be known in advance. Cabinets, appliances, and fixtures could also be standardized. At a minimum, their locations could be fixed. The colors, styles, and models could and probably would vary as manufacturers frequently change their products. Off-the-shelf, pre-engineered systems, such as elevators and trash chutes, and standard colors would also be encouraged. --Create Building Archetypes proposal
More details regarding these concepts and summaries of all concepts submitted to Phase I of the MN Challenge will be available on the MN Challenge website in the coming weeks.
There was a strong field of concepts submitted for Phase I MN Challenge. While not all proposals could be selected for Phase II, they all merited careful consideration and continued conversation. The MN Challenge team is committed to hosting this conversation through a follow-up meeting and online discussions.
Additionally, we are pursuing other funding opportunities for ideas that were particularly strong, but weren’t the right fit for the MN Challenge. Those groups have already been contacted and the great work and ideas will be further explored. Finally, Minnesota Housing will be incorporating these concepts in the Multifamily Roadmap Project, an effort to become a more agile, streamlined, and responsive lender.