The following commentary appeared on September 5, 2017 in the Minneapolis Star Tribune.
Partnerships can help with public housing
Traditional funding is thin; private investors can play a constructive, nonthreatening role.
By Greg Russ and Tamir Mohamud
As officials of the Minneapolis Public Housing Authority, we found much to agree with in the Aug. 17 commentary by former state Rep. Phyllis Kahn (“Minneapolis election overlooks a critical issue”).
Kahn rightly highlights the urgent need for city leaders, the housing authority and public-housing residents to move forward on a long-term plan to preserve the housing that the MPHA provides. We face a deepening gap in federal funding that has grown for decades. With $127 million in immediate capital needs in our buildings, and just $10 million in annual funding from Congress, it is left to us in Minneapolis to seize the initiative and innovate.
MPHA’s 6,000 units of public housing are one resource we know we have, amid a regionwide affordable housing crisis. Two-thirds of Twin Cities families with extremely low incomes — the people public housing serves — pay more than half of their incomes for rent. And these families compete for a meager supply: For every 10 such families in the metro, only three affordable rentals even exist. Today almost 17,000 people sit on wait lists for MPHA’s public housing and housing vouchers.
We must move boldly to safeguard MPHA’s public housing. Reviving the city’s tax levy for public housing, which Kahn mentions, would be a strong start. Before it was eliminated during the recession, this levy provided vital funding for security services that benefit not just residents but surrounding neighbors. Restored to its full size — potentially millions of dollars — the levy could begin to make a dent in our backlog of repairs.
But it would not be enough. Funds from the city, state, loans and bonding should all be on the table. And so must the Low Income Housing Tax Credit. The LIHTC has enabled the preservation or construction of 3 million low-income homes since 1986. Yet no sooner had it entered the conversation here than we encountered an active effort to demonize and distort the role it could play in saving public housing.
Here are the facts any public-housing resident or concerned community member should know: The LIHTC entices an investor to give us millions of dollars that we do not need to pay back. This injection funds major repairs, badly needed upgrades to common and living spaces, and even the addition of more deeply affordable housing units for the families we serve.
For the investor to claim the credit, the IRS requires us to temporarily share ownership of the building (but not the land), typically for 15 years. The affordability of the homes is locked in for much longer — at least 30 years, and potentially in perpetuity. Never does the investor have the power to “turn it into condos,” raise rents or evict tenants, who have rights and benefits guaranteed under the tax credit rules, federal subsidy laws and state law. Federal subsidies, provided by MPHA, supplement the rent for every one of these tenants so that families pay the same rents.
The investor gets the tax credit, but MPHA controls the deal. Any deal that doesn’t meet our mission — to provide homes for those most in need — is a deal we reject outright.
The bottom line for residents breaks down into five simple promises:
- You will not lose your housing benefits.
- Your rent will not go up because of redevelopment.
- You will have the first right to return if you need to move temporarily while we make improvements.
- MPHA will continue to manage and maintain the properties.
- MPHA is committed to preserving — and increasing, if we can — our number of low-income housing units.
Extensive resident engagement is essential to any project, and we expect residents and the community to hold us to these. One can look to our stellar record among housing authorities — of never losing units over the decades; of keeping those units full; of service to refugee communities, the elderly and people of color — to know that we mean it. Anyone who doubts our commitment to preserve and grow can look to our upcoming groundbreaking for 16 new public-housing townhouses in south Minneapolis for families emerging from homelessness.
To keep our promises, we must raise sufficient funds to fully reinvest in our properties. This will require the support, advice and dealmaking abilities of the City Council and mayor to bring in the investment we need. If we move boldly together and embrace the tools available to us today, we can save this essential housing for the future. Our mission and our community demand it.