What to do about housing? Where can we have an impact? For some background: the Olmsted County Housing and Redevelopment Authority operates numerous programs aimed at addressing local housing concerns. The HRA is heavily funded by federal dollars. Federal funding has been shrinking for the program in recent years, and at one point proposed federal cuts would have nearly decimated the program that provides over 500 housing vouchers in Olmsted County. Other efforts of the OCHRA, like a relatively new housing rehab program, uses mostly money generated from a local tax levy that has been in place for a number of years. We are fortunate to have this wonderful program with such dedicated staff.
Housing vouchers make up the difference between what a person can afford to pay and what market rate is for rent. If a family can only afford $650, but the rent is $950, the voucher makes up the difference. I support the program, but the money ends up in the pockets of landlords and doesn’t provide a pathway out of poverty for most.
Right now, there are a number of great organizations that have partnered to create the Coalition for Rochester Area Housing. Through philanthropy, they have gathered well over $4 million to invest in solutions, much of which has been put forward by Mayo Clinic.
This most serious issue needs to be addressed carefully. My efforts will revolve around exploring different creative options that can sustain themselves, rather than increasing funding or creating restrictive policies. I hope to talk with OCHRA and the Rochester Coalition for Rochester Area Housing about some collaboration.
Right now, we see ongoing opportunities to invest in current rentals as they come onto the market. I am referring mostly to our stock of single-family homes that were converted to rentals during the 70’s, 80’s, and 90’s. Many are in disrepair, but in many cases even with the cost of renovations, the price-per-unit can be kept around $80K per unit on average. A recent remodeling project of mine involved a triplex that had just been purchased. After renovations, the unit price would have been about $65K per unit. Significantly cheaper than building new “affordable” units (which allow rent to start at around $950/month for 1 bedroom).
As mentioned, we have around 500 vouchers in Olmsted County. If $4 million was leveraged through existing programs to invest in current housing stock (before it becomes cost-prohibitive), we would have 50 more units that offer affordable housing – an increases of 10%. And this would be without subsidizing, without adding more vouchers. Fifty newly-remodeled units that could be rented out for between $650-1000, instead of $950 and up. This allows 50 families to afford their rent with dignity in a nice home. It also creates a job for a manager, a job (or business opportunity) for a maintenance/lawn care service, maintains a reserve fund for future repairs, and even pays back the $4 million at around $325,000 annually! Could we do that? The answer is yes. These are the types of “policies” I hope to bring to fruition.