MINNEAPOLIS (KMSP) - The Greater Minnesota Housing Fund has big plans to invest millions to preserve affordable housing across the seven-county metro area.
The group was granted $3 million Tuesday from the Hennepin County Board of Commissioners they use will continue to build a $25 million fund to help keep people housed.
The preservation effort is particularly mindful of those on section 8 or rent subsidy vouchers like Merche Banks, a single mother from Richfield, Minn.
“I felt as a person I felt violated,” Banks told Fox 9 of receiving a notice to vacate on May 27.
Banks has lived at Crossroads Apartments, now known as Concierge Apartments, for the past eight years.
According to reps at the Greater Minnesota Housing Fund, investor Ron Soderberg acquired Crossroads Apartments seven months ago.
As a result Banks says her rent was raised by at least $150 and Soderberg will not accept rent subsidy vouchers, including Section 8.
“Without that housing subsidy I would not have a place to stay,” Banks explained.
After the acquisition, 650 households at Crossroads Apartments were given notice of a rent hike, and 135 were given walking papers.
This acquisition alone affects more than 400 people who are expected to be displaced by Soderberg’s ownership.
The Greater Minnesota Housing Fund is a preservation effort intended to prevent more stories like Banks’.
“[The fund] will preserve roughly 1,000 units of affordable housing,” said Greater Minnesota Housing Fund President Warren Hanson.
“We’re adding a lot of housing stock to the market, but we’re actually losing the affordability. What we’re trying to do is plug that hole,” Hanson noted.
According to Hanson, affordable housing is anywhere from $550 to $1,200 a month.
Those most at risk of losing affordable housing to out-of-state investors he says are seniors on fixed incomes, service industry workers, and young millennials who are just starting their careers.
The affordable housing takeover is an issue occurring every week in the Twin Cities.
Minnesota’s affordable housing problem is one the executive director of the Minnesota Housing Partnership, Chip Halbach, also considers a growing one.
“People with lower incomes have seen their incomes go down relative to inflation while their rents increase,” Halbach said.
While Minnesota’s rental vacancy is now at around 3 percent, the affordable apartment vacancy is much lower.
“For people who need affordable housing the vacancy rate is still quite low, below 2 percent, so for somebody who gets kicked out of Crossroads, or Stonehaven, or Meadowbrook it’s really hard to find them another place to live,” Gail Dorfman, Executive Director of St. Stephen’s Services, told Fox 9.
“Every time we hear that a building has been sold and anew owner is coming in and their putting granite countertops in the kitchen we get really worried about what’s going to happen to the people we serve in those buildings,” Dorfman, who has heard a lot from clients in recent months who have received an eviction notice, said.
Dorfman calls the step the Greater Minnesota Housing Fund has taken “a really great start.”
Dorfman, also a former Hennepin County Commissioner, is working hard through St. Stephen’s Services to find opportunities for people benefiting from rent subsidy vouchers to keep them out of homelessness.
“There are so few opportunities for them to take their Section 8 vouchers or other subsidy to find another place near where they live now in their own community,” Dorfman said shaking her head.
As for Banks, she has no idea where she’ll be living next month.
The Greater Minnesota Housing Fund expects their perseveration effort to be underway in the fall.
The organization will put down payments on properties in high demand areas such as neighborhoods near good schools, the light rail train or where other reinvestments are taking place.
Hanson hopes to continue the fund in phases with the goal of preserving at least 2,000 affordable housing units over the next five years.