St. Joseph city council considers affordable housing project on east side

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by Stephanie Dickrell

news@thenewsleaders.com

St. Joseph could get some much-needed affordable housing, if local governments support a new project proposed by Sand Cos.

City council and economic development authority members heard preliminary details about an apartment building project on the east side of St. Joseph at a special joint meeting Tuesday, March 19.

Megan Carr, a senior business development manager with Sand Development, presented preliminary details, asking if council members were willing to commit to financially support the project. The company plans to apply for grant funding from the state, but needs local government support to do so.

The proposed property is southwest of the U.S. Army Reserve facility on 20th Avenue SE. It would include 48 units, including one-, two- and three-bedroom units.

The apartments would be available to people at two income levels: 30 percent and 60 percent of the area’s median income. For a family of four in St. Joseph, that is roughly $22,000 yearly income and $42,000 yearly income.

Rents could range from about $600-700 for a one-bedroom unit, up to $800-900 for a three-bedroom unit. The market rate rent for the area is about $800 for a two-bedroom apartment, according to the National Low Income Housing Coalition.

A ‘desperate’ need

for safe, affordable housing

Affordable housing is sorely needed in the area, said Neil Fortier, executive director of the Housing and Redevelopment Authority of Stearns County.

“The need is there and it’s not going to go away,” he said. “Our waiting list has been closed for so many years.”

The Stearns County HRA hasn’t been able to issue new vouchers in more than a decade, he said. If the project receives state funding, the Stearns County HRA will likely allocate five housing vouchers for low-income families to the project, Fortier said.

“It’s a great site for a great project,” he said.

Carr agreed and said Sand Cos. sees the need for affordable housing every day.

“We receive five to 10 inquiries a day,” Carr said, about the availability of affordable housing.

“People are desperate for a safe and affordable place to live,” she said.

Council member Anne Buckvold agreed and said she sees the need every day in her work in mental health, referring to the number of kids in the school district experiencing homelessness. And not all fit the stereotypes attributed to low-income families: people of color, immigrants and refugees.

“There are many homeless kids in the district. … It’s not just any particular group anymore,” she said. If it comes to fruition, the apartments wouldn’t be move-in ready until 2020. But Carr hoped to get some commitment to support the project from city and county officials.

Sand Development hopes to receive public funding from the state to support the project. To do so, it has to submit a grant application for the Low-Income Housing Tax Credit program by June.

Applications are judged on a variety of factors, including the need for affordable housing in that area, the monetary support of local governments, adaptability for aging populations and access to public transportation.

Projects are also favored if they incorporate sustainable construction practices, design and utilities. For a project like this, Carr said, the apartments would include low-flow water fixtures, high efficiency heating and cooling units and water heating systems.

Local experience

in affordable housing

Sand Development builds and manages affordable housing across Minnesota and Iowa.

It has developed more than 3,000 units at more than 50 properties, in sizes ranging from a dozen to more than 300 units. About 90 percent of its properties are affordable-housing projects.

Locally, Sand Cos. has developed and operates affordable housing and market-rate housing in Sartell, St. Cloud, St. Michael and Albany.

Carr said the company needs to get a commitment of about $500,000 from local governments, in tax reductions and waiving of utility and other fees. The total project could cost $8-9 million. Any monetary contribution would be contingent on the project receiving grant funding from the state, Carr said.

City Administrator Judy Weyrens said there are a variety of ways to get to the $500,000 contribution, including creating a tax-increment-financing district and tax abatement for the property.

Carr said it can take a few tries for projects to receive funding. It all depends on the amount of money being given out that year and the type and number of projects applying for the grants.

One option to show local support would be a negotiated purchase price for the foreclosed property, much lower than the market value.

One proposal is for Stearns County to sell the roughly six-acre property to the St. Joseph Economic Development Authority for about $25,000, a small percentage of its likely appraised value. The difference between the purchase price and appraised price would count toward a local monetary contribution, Carr said.

If that route is taken, purchase agreements would be contingent on Sand Development buying the land from the city.

If council chooses to proceed and commits to a local contribution, the application would be submitted in June and likely awarded in October or November. Construction would start sometime in 2019 and it wouldn’t be completed until 2020.

The project would add some temporary construction jobs, Carr said, as well as provide a small bump to local retail and food establishments. It would likely only create the equivalent of one new full-time job, among a few part-time management and maintenance positions, she said.

Potential problems

Despite the clear need, affordable housing projects often face community opposition. The project could also face public resistance to the cost of adding roads and other infrastructure, increased traffic and other issues.

“There are a lot of negative connotations to affordable housing,” Carr said, and offered to make presentations and answer questions from the public as the project moves forward.

Council member Bob Loso said given local attitudes about the area’s increasing diversity, the council may hear from residents concerned about the project becoming what he called a “refugee dump.”

Carr said by law, they can’t discriminate in allocating housing, and it is given out on a first-come, first-served basis.

Author: Stephanie Dickrell

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