Employer Assisted Housing and the Community Land Trust

Document Sample
Employer Assisted Housing and the Community Land Trust Powered By Docstoc
					Employer Assisted Housing
        and the
 Community Land Trust
What and Where is Rochester, MN?

People think of two things when you
mention Rochester, Minnesota.
                          Rochester, Minnesota
•Southeastern Minnesota
•95,000 Residents
•Main Employer – Mayo Clinic, 28,000 employees,
mostly downtown
                      Rochester, Minnesota
         Housing Demographics
               Late 1990’s

•Rental Vacancy Rates < 1%
•Housing Options for low to moderate
income families almost nonexistent
•Much of the shortage fueled by Mayo’s
Growth
                      Rochester, Minnesota
             Housing Crisis
•A Community Problem
•Rochester Area Foundation
•First Homes - “Starter Homes for
Working Families”
•Mayo’s Leadership Gift Jump Starts a
Community Solution
                      Past Mayo Solutions



                    Graham Addition - Quonset Huts



Homestead Village




                            Homestead Addition
First Homes Developments Based on
       Blended Neighborhoods
  •Gap Loans (Second Mortgage)
  •CLTs (Ground Lease)
  •Market Rate Units (Non-First Homes)




       Find the Market Rate House
Sample Buyer Financing
                         Gap Financing       CLT
 Total Development Cost  $     145,000 $     145,000
 Less TIF                $       (6,500) $    (6,500)
 Price to Buyer          $     138,500 $     138,500
 Less First Homes        $       (7,500) $   (45,000)
 Less DP Assistance-MHFA $      (13,000) $   (13,000)
 Less Downpayment        $       (2,770) $    (2,770)
 Final Mortgage Amount   $     115,230 $      77,730
 Principal & Interest    $          636 $        429
 Taxes                   $          120 $        120
 Insurance               $           50 $         50
 First Homes CLT fee     $          -    $        10
 Total Monthly Payment   $          806 $        609
 Income Needed           $       32,252 $     24,369
 Hourly W age Needed     $        15.51 $      11.72
•Resale based on appraisal
•Value of land remains out of the equation
•Seller receives 50% of appreciation of house value
•Remaining appreciation stays with home, keeps home
affordable to working families with no additional subsidy
                         First Homes Resales


 $160,000
 $140,000
 $120,000
 $100,000                                      Home and Land Value
  $80,000                                      CLT Sale Price
  $60,000
                                               Non-CLT Sale Price
  $40,000
  $20,000
     $-
            Initial Purchase    Resale
Employer Benefit
650 of planned 875 housing units completed. They
house:
   •low to moderate income families from 219
   different businesses
   •215 low to moderate income Mayo families
First Homes’ key focus remains serving Rochester
AREA employers and their employees.
First Homes also serves communities within a 30
mile radius, adding to smaller community vitality
and offering choices to homebuyers.
              First Homes Developments


                                Goodhue
                                            Wabasha
                          Pine Island              Plainview

                          Kasson Byron    Rochester
                                              Dover Dover
                              Dodge
                                                       St. Charles
                                         Olmsted          Winona
                     Hayfield                    Chatfield
     Multi-Family    Grand Meadow           Spring Valley
     Rental

                                Mower          Fillmore
     Single-Family Home
     Ownership




28 Projects in 12 Communities, 7 Counties
                                      COMMUNITY PARTNERS
                          LENDERS




                                                  CITIES/COUNTIES
 Three Rivers Community Action, Inc




BUILDERS
First Homes BY THE
NUMBERS
New Single Family Homes created to date:                                               342
New Community Land Trust Homes:                                                        108
Workforce Rental Units Created:                                                        229
Subtotal – Completed Units                                                             679
Workforce Rental and Single Family Units Allocated (not yet created):                  196
Total Units completed or allocated:                                                    875



                                                                        Single Family Completed
                                                                        CLTs Completed
                                                                        Rental Units Completed
                                                                        Other Allocated Units
     Leverage: 1 to 14 so far
       $4,642,058        $4,909,060        $4,501,002
                         Cities
       Other                               First Homes
                                                     $2,485,198
                                                     GMHF


                                                            Cities
      $55,445,899                                           First Homes
               MHFA
                                                            GMHF
                                                            MHFA
                                                            Other




First Homes has brought more than $71 Million to SE MN region
ADAPTING TO THE
CHANGING
ENVIRONMENT
Adjustment of First Homes goals from 500 single family and 375 multi-family, to 600
and 275, respectively
Heritage Homes
    •    Stabilizing Neighborhoods
    •    Providing housing choice for workforce housing
    •   Investing in inner neighborhoods as a counter to our investment in suburban
    developments
Continuous review and adjustment of First Homes program delivery

                        Original Goal       500 Single Family
                                            375 Rental
                        Current Goal        600 Single Family (Including 200 CLTs)
                                            275 Rental
            Heritage Homes
• Value Gap – Sometimes the homes cost more to
  purchase and renovate than they appraise in the
  end. Why do we do it? To stimulate the market
  and invest in neighborhoods and families.

• The homes become part of the Community Land
  Trust – as the neighborhood gentrifies, the CLT
  homes remain affordable forever.
1503 1st Street SW – Sold September 2004
   ORIGINAL             AUGUST 2004




               COMPLETE RESTORATION


               1130 WEST CENTER STREET



JANUARY 2005
1                                      2
         Are Social Justice and Economic
         Development Incompatible???


    Achieving two organizations’ goals means:
    Sometimes subordinating your own to achieve both

                                            4
Business Plan vs. Vision Statement              First Homes is using a
                                                business approach to
Objectives vs. Goals                            meeting local housing
Measurable Results vs. Goal Setting             needs

Starter Homes vs. Affordable Housing
Mutual Benefit vs. Moral Imperative
Community Infrastructure vs. Community Ownership
www.firsthomes.org