News

MMCDC’s subsidiary, White Earth Investment Initiative, is a Native CDFI. Video shared with permission.

The Office of the Comptroller of the Currency is highlighting the transformation of the historic Ford Motor plant in Minneapolis in its new video. MMCDC provided $9.5 million in financing utilizing the federal New Markets Tax Credit. Hear MMCDC’s Julia Nelmark and others describe this major Minnesota redevelopment project as part of the video below.

 

 

(Edited for length and reprinted with permission)

More than 554,000 Minnesota households struggle to afford quality housing, a 58 percent increase since 2000

Governor Mark Dayton and members of the Governor’s Task Force on Housing have released its final report, recommending 30 action steps aimed at improving access to quality, affordable housing for Minnesotans and building a more vibrant, inclusive economic future for all Minnesotans.

“More than half-a-million Minnesotans are struggling to afford quality housing,” said Governor Dayton. “The strength of our communities and the success of our people depend on creating solutions to the many housing challenges facing Minnesota families. I am grateful to the members of this Task Force for their collaboration and hard work. The actions they have recommended offer a roadmap for connecting all Minnesotans to the safe, quality, affordable homes we need for a better Minnesota.”

30 Recommendations for Improving Access to Good, Affordable Housing

Following extensive discussion and analysis, the Task Force compiled its recommendations in a final report, More Places to Call Home: Investing in Minnesota’s Future. The report outlines how public, private, nonprofit, and neighborhood efforts can help ensure that good quality homes and strong communities remain the cornerstones of a prosperous Minnesota. In total, the report includes 30 recommendations, organized across these six goals that have the power to transform Minnesota’s housing landscape:

Commit to Homes as a Priority –Create a broader and stronger public commitment to the urgent need for more affordable homes for more Minnesotans. Preserve the Homes We Have –Keep the homes we already have, especially those that are most affordable. Build More Homes –Build 300,000 new homes by 2030, across all types, prices, and locations to stabilize prices and meet demand. Increase Home Stability –Assist twice as many people at risk of losing their homes because of rent increases, evictions, and heavy cost burdens. Link Homes and Services –Build stronger links between where we live and the services needed to live stable lives. Support and Strengthen Homeownership –Create pathways to sustainable homeownership, with a focus on removing barriers for households of color.

To read the Task Force’s recommendations in full, CLICK HERE.

MMCDC’s Sarah Castro has earned a professional certificate in nonprofit management from the University of California-Riverside University Extension and Regional Access Project Foundation. The classes provided a summary of the governance, financial, and legal aspects of nonprofit administration.

Reprinted with permission from Northcountry Cooperative Foundation. MMCDC is one of several funders.

Fridley, MN | Many homeowners dream of kitchen renovations and double-stall garages, but for the homeowners in Park Plaza Cooperative, one of the biggest dreams has been having a safe place to go in times of severe weather. In fact, Park Plaza homeowners have been dreaming of constructing a new storm shelter for almost a decade–ever since they came together to purchase their manufactured home community in 2011.

Park Plaza’s existing shelter is a small, windowless underground bunker that can accommodate only a fraction of the community’s 200 plus residents. (The structure is also without electricity and prone to flooding). Since becoming resident-owned, the Cooperative has directed residents to a nearby hospital in times of severe weather, but for residents with physical disabilities and those without vehicles, the chances of actually making it to the hospital in time to avoid a weather event are slim. For these reasons, the Co-op has made construction of a new shelter a top priority.

This Thursday, August 16 at 4 p.m. the Co-op will break ground on a new, state-of-the-art, combination storm shelter and community center, which will provide a safe, pleasant place for the Co-op to gather for generations to come. The bulk of the project was funded through a one-time Minnesota Housing grant program and a large chunk of the Co-op’s reserve fund. After unforeseen  increases in construction cost threatened to scuttle the project, the Co-op worked tirelessly over many months to identify additional grant funding and took out an additional loan in order to assemble the balance of funds necessary to complete the project.

Throughout the journey to reach today’s groundbreaking, the Co-op was assisted by Northcountry Cooperative Foundation (NCF) and the Co-op’s State representatives, Senator Carolyn Laine and Representative Connie Bernardy. Park Plaza Board President Natividad Seefeld hopes the project will help encourage other
community owners to build shelters to protect residents.

“We finally did it. After years of living in fear about the next storm that comes our way, our community will finally have safe place to go. And, we will have a place to get together and host co-op meetings, which is a huge bonus since we’ve been meeting in our garage all these years! My heart is filled with great joy and so much thanks for all the wonderful people who came together to make this project happen. I hope our success with this project will encourage other community owners to build or update their shelters in order to keep residents safe.”  – Natividad Seefeld, Board President of Park Plaza Cooperative

Background on Storm Shelters in Minnesota
Unlike most site-built homes of the Midwest, manufactured homes are typically built without a below-grade basement. No basement isn’t a problem for most manufactured homeowners, that is, unless you’re in a tornado alley, which most of Minnesota is. For this reason, Minnesota Statute requires all manufactured home communities to have an onsite storm shelter. The law was put in place after most of the communities in the state were built, however, which means many communities have no or inadequate storm shelters. (Existing manufactured home communities were grandfathered in after the law was enacted. Grandfathered communities are required to provide an evacuation plan to residents in lieu of a storm shelter).

Park Plaza Cooperative is a not-for-profit 308B Cooperative and one of Minnesota’s growing number of resident-owned manufactured home communities. Park Plaza is located in the north Twin Cities Metro in the city of Fridley, just 10 miles from downtown Minneapolis. The Co-op is home to over 200 residents. www.parkplaza.coop

Northcountry Cooperative Foundation (NCF) , a ROC USA Certified Technical Assistance Provider, is a Minneapolis-based nonprofit organization formed in 1999. NCF’s primary line of business is  converting manufactured home communities to resident-owned communities. This initiative advances NCF’s mission and plays a vital role in its strategic plan. www.northcountryfoundation.org

MMCDC President Kevin Shipley shared the company’s Core Values with the membership at the company’s June 21, 2018, Annual Meeting.

These five Core Values have been adopted by the board after discussion among members of the staff, who arrived at the values and meanings listed below.

Teamwork/Partnership

The Board, Staff, Lending Partners and Customers will work collectively to achieve the Mission of MMCDC.

Integrity/Honesty

We are consistent in our intentions, words and actions. We finish what we start, and only promise what we can deliver (we do what we say we will do). We tell the truth. We will treat each other and everyone with respect.

Accountability / Responsibility

We will be accountable to each other, to our customers and to ourselves. We will take responsibility for our actions, by what we say and what we do.

Innovation

Everyone will be forward-thinking. We encourage creative thinking and new approaches to our work that support our Mission. We will take risks when prudent to do so.

Impactful

The Mission of MMCDC is to assist communities and individuals achieve a better quality of life. The products and programs we offer will positively affect those we serve. We will strive to be the most impactful community development company in the nation.

Additionally, MMCDC staff, board and membership strive to be servant leaders. Servant leaders share power, put the needs of others first, and help people develop and perform as highly as possible.

When people work together for a shared goal, great things happen. That ideal is at the center of NeighborWorks Week, a nationwide celebration of the good that comes out of neighbors working and playing together.  

MMCDC and the entire national NeighborWorks network are committed to bringing about positive change by improving lives and strengthening communities. Over the past 40 years, NeighborWorks and its network have assisted close to 8 million people through affordable housing and counseling.  In 2017, the NeighborWorks network provided housing and counseling services to 455,100 people, repaired 71,300 homes, and created and maintained 43,600 jobs.

As a member of the network, MMCDC contributed by providing 18 business loans, managing 254 units of affordable housing, building five new homes, educating 74 potential homebuyers, preparing 534 tax returns free of charge, and financing 200 home purchase, refinance and rehabilitation loans.

MMCDC is helping residents thrive in Minnesota’s underserved communities, ensuring that the core needs of individuals are met by listening to our neighbors, no matter their income or professional position and providing or linking residents to essential services, whether those services help a person train for and find a job, understand how to buy a home, or start a small business.

Partnerships are essential to achieve long-term change and there is strength in numbers. NeighborWorks Week is a chance to engage residents and build collective capacity. We have a shared obligation to transform all communities into places of opportunity.

Happy NeighborWorks Week!

The following is reprinted with permission of Prairie Business magazine, Grand Forks, ND. MMCDC is the founding member of the coop.

By Tom Dennis on Apr 3, 2018 at 11:56 a.m.

Editor’s note: Jeff Fagerstrom is director of the Northwest Minnesota Housing Cooperative in Thief River Falls, Minn. In partnership with government and nonprofit agencies, the for-profit cooperative is answering one of the region’s biggest unmet needs: It’s building smaller. more affordable homes.

In this interview with Prairie Business, Fagerstrom explains how the process works. The interview has been edited for clarity and length.

*    *    *

First, tell us about your organization.

The Northwest Minnesota Housing Cooperative is a for-profit construction company. We’re a co-op because we’re owned by local contractors, carpenters, plumbers, electricians and building-material suppliers; basically, anyone who works on a house is a member of our co-op.

Many of our 75 members are competitors in the free market. But since 1998, and in partnership with the Midwest Minnesota Community Development Corp. in Detroit Lakes, Minn., we’ve come together as a cooperative for special projects – those that involve building the lower-cost housing our communities need.

In recent years, as you know, first-time home buyers have had a very hard time finding single-family homes of any kind – let alone new homes — that they can afford.

Tell us about your experience with this issue.

In 1998, when the cooperative started, we were building single-family homes for $98,000.

That exact same house today costs $225,000.

So in 20 years, that’s what the market has done. It has more doubled the cost of the home.

Back in 1998, we were building for all kinds of first-time home buyers; that was our niche. We wanted to build for them and help them become permanent residents, and we used the financing and other tools provided by groups such as the MMCDC to make it happen..

And we were meeting that objective in 1998; but more recently, we haven’t met it. Instead, builders are putting up homes that cost $250,000 or more; and seemingly nothing could be done to bring down the price of a new home.

Tell us about the Greenwood Neighborhood Addition in Thief River Falls.

The basic concept is “smaller homes, smaller lots, smaller price tags.” So, instead of building a 1,500-square-foot rambler, we’re building a 930 square-foot split-entry home, on a 60-foot by 120-foot lot, with not a lot of fluff.

It’s kind of getting back to what the homes were like in the 1970s and ‘80s.

And in Phase 1 on Greenwood Avenue, we have 10 lots. We are down to just two open lots; the others have been sold, and the homes have been or are being built

For Phase 2, which will be located behind the Phase 1 homes, we have another 14 lots available. We have already requested the infrastructure for that, so that should be installed this summer.

Where did the idea come from?

The Greater Minnesota Housing Fund in St. Paul has a program called Building Better Neighborhoods, and for years, they’ve called for compact developments that can result in quality, affordable homes.

But we’ve always said that the market is not asking for it. The market doesn’t want it. Your homes are too small, your lots are too small. It doesn’t work.

We are rural Minnesota. We like our elbow room. We like our land. We don’t like our neighbors being right next to us.

So, we never felt that the market was ready for it. But after the housing readjustment here in 2008 to  2012, we decided it’s time.

Now, we are trying it, and so far we’ve been successful.

Tell us more about the houses.

Typically, these are buyers who are coming out of apartments and into their first home. So, to make our homes more affordable, we are really getting down to some bare basics, but without falling into “cheap.”

We still pitch to our buyers that we want them to own an investment. We want them to have the same American dream that everyone else has had; and that means we try to build houses that when people come in, they say, “Wow, this is awesome. I would love to live here.”

What kind of “bare basics” are involved?

The lot size is a big part of it. We are on 60- by 120-foot lots, so, there is not a lot of backyard, not a lot of grass space.

But again, we are selling to clients who are coming out of apartments. There, they don’t have any grass at all, so they’re usually thrilled just to get the house part of it.

The same with the garage. Again, our goal is to get the buyer into the house for the least amount of money. That means our base price includes just the house, with no garage.

If they can afford a garage in their mortgage, it could be added as an amenity in their purchase price. If they don’t have the cash right away, we’ll give them a gravel parking spot in the backyard on the site of what will be the garage

And when there is a garage, it’s in the rear. That’s important, and it’s because we’re dealing with narrow lots.

But it also adds to the appeal of the neighborhood, because as you drive by, you see houses, not garages.

What are some of the other cost-saving measures?

Here are some examples.

For cabinetry in the kitchen, we’re using paneled cabinet straight doors, as opposed to a raised panel that might be solid oak construction.

Right there, that’s a savings of a couple of thousand dollars.

The windows we are using are slider windows instead of casement windows. Yes, it changes the energy efficiency a little bit, but we compensate for that with other “green” features, such as the fact that all of the houses have spray-foamed insulation in the walls.  So we upgrade the insulation side of it. The bedrooms are good-sized, but they’re not huge; and the carpet may not have super-lush padding underneath, if the buyer has selected a lower-cost option to keep themselves in budget. In the bedrooms, we have sliding bypass closet doors, which are the least expensive as opposed to bi-fold doors.

What’s the price of the home that results?

Basically, the starting point is about $160,000. Then if a buyer is going to finish the basement, they could add that for about another $20,000. That would add another bathroom, more bedrooms and another family room, in addition to the one upstairs.

Then if they had the funds available for a garage, they could add that for another $20,000.

Typically that includes a driveway and a sidewalk that would attach the garage to the house.

So with those two features, you’re sitting at about $200,000.

What do buyers think about having a detached garage in the back?

The ones we’ve talked to love the concept, because it’s all part of building a neighborhood, not just a development.

They like the old-fashioned feel of seeing houses – not garages – fronting the street.

Here’s a related amenity: We have a 10-foot bike path that goes all around this development, plus in the middle of it all, there’s going to be a city park. So that’s meaningful to the buyers: True, they’re not going to have a big yard, but they are going to have a neighborhood park just out their back door. So it works.

Are there other elements besides the smaller homes and smaller lot sizes that contribute to the homes’ affordability?

Absolutely. An equally important part is the financing side, and that has a number of components.

First, we partner with U.S. Department of Agriculture Rural Development. They offer housing loans, and some of those are set up to where our buyers have to come up with only $500 cash.

So, we can attract the working family that has a decent job, that knows they can support a monthly payment as they’re doing right now in their apartment, but that just doesn’t have a lot of cash sitting in their bank account to get into a brand new home.

USDA offers other programs, too, including one that  lets them write interest rates down to as low as 1 percent.  I’ve seen buyers who use that program have monthly payments of around $700, and that includes taxes and insurance.

But that’s an income-based program, so not everyone qualifies. Realistically, most buyers are getting in for monthly payments that are closer to $1,000, $1,200 or $1,500, depending on the amenities that they choose.

The USDA is federal. Are there local programs that also are available?

Yes. The other aspect that helps make the monthly payments affordable — and it’s an important piece — is community involvement.

For example, Thief River Falls offers $10,000 as an interest-free loan for 10 years. So if somebody wants to build a new home in town, the city will loan that buyer $10,000, and the buyer will pay that back, interest-free, over 10 years .

Another partnership that happened in this development was with the Minnesota Housing Finance Agency. They came in and said, OK, Thief River Falls, we see you need housing, and we’d like to help. So they offered $15,000 loans that are interest-free and payment-free for 30 years.

It’s still a loan, and the buyer still has to pay it back. But it’s $15,000 that the buyer can put toward the home now, but that won’t accrue interest or have to be paid down for 30 years.

The logic is that after that 30 years has expired, the buyer will have paid off his or her initial 30-year mortgage and can start making payments on the MHFA loan.

And of course, they do understand that most people won’t own their home for 30 years. So, if the buyers sell the house anytime in that 30 year period, they would then have to pay back that loan. They’d satisfy that loan just like they would any other on the house.

So it is a mortgage, but it’s also a generous offer.

Again, the point being to lower the buyers’ monthly payments?

Exactly. And I’ll give you one last example of that – and this is truly community participation.

As you know, a big part of the monthly payments in our area are the special assessments. Normally in a brand-new development, you have to build streets, curbs and gutters and install water and sewer, and all of that infrastructure costs money.

It can equate to special assessments of $200 a month on the buyer’s house payment.

Now, here’s what the city of Thief River Falls, Pennington County and the local School Board are doing to address that.

The buyers of these houses get a 6- to 9-year tax abatement, but it’s one that works in a unique way. Those buyers still pay their normal property taxes — nothing more, nothing less. But instead of that tax money going to the city, School Board and county, it actually goes to pay for the special assessments on the property.

Then once the owner’s special assessments are paid for, the abatement is lifted.

It’s a very Innovative way of letting the buyer have at their house payment lowered.

Why are those governing bodies offering that help?

Because they see the value of new housing.

They’re elected leaders, and they know that some local residents could get mad that these property taxes are not going into the general budget. But the truth is, if the taxing entities can get through the 6 to 9 years of the abatement, they will have created a home that’s going to be here for the next 100 years, generating taxes for this community.

Also, they look at these new houses, and they see how many of the young families in them are going to become permanent residents. As residents, they not only will be paying taxes. They’ll also be going to the local schools, paying utilities and using the local restaurants, grocery stores and all the retail and businesses downtown. They’ll also be the workforce that Digi-Key, Arctic Cat and other local employers need.

And last but not least, here’s the reality: We builders can’t do this by ourselves. The cost of new construction means that even the smaller and more affordable homes that we’re building still will cost buyers $160,000 to $200,000. That’s still a good chunk of change.

It has to be a partnership for this to work. And in this case, everyone is coming together and saying, “Let’s do this for our residents.”

Shelly Kading

Having outgrown her starter home, Shelly Kading needed something larger at an affordable price. She soon heard about MMCDC and its unique development in Frazee, Minn. She purchased her new home just in time for Christmas.

“The layout of the house worked out perfectly,” she said.

Frustrated by increasing housing development costs, MMCDC worked with several entities to help in creating four quality homes at a lower price. To further reduce the price, buyers have the option of purchasing the home with just the main floor finished, adding a finished basement, and/or building a garage.

For Shelly, it made sense to start finishing the basement immediately to accommodate her two young children. A two-stall garage will be started in the spring. “It’s been fun watching the work being done,” she said.

The financing for the 1,824-square-foot home was well-explained by MMCDC’s loan officer. “She broke it down in simple terms,” Shelly said.

Shelly described the neighborhood as welcoming—as is the city of Frazee.

“This has been a great project to help the expansion of homeownership in Frazee–plus, getting rid of a blighted property,” Mayor Hank Ludtke said. “We look forward to working with MMCDC on future housing projects.”

Additional support for the project was provided by the Minnesota Housing Finance Agency and the federal New Markets Tax Credit program.

MMCDC is seeking buyers for two more homes in Frazee. Contact Natalie for information.

501 Ash Avenue, Frazee, MN