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In the last decade, the Greater Minneapolis-St. Paul area (MSP) experienced rapid growth in its suburban poor population. From 2000 to 2012, the number of poor individuals living in the metropolitan area’s suburbs (outside Minneapolis and St. Paul proper) increased by 126 percent, the eighth-fastest rate among the nation’s 100 largest metropolitan areas. Today, nearly six in 10 poor residents of the metropolitan area live in suburban communities.
Part of this trend may reflect low-income people moving from the two cities to the suburbs. However, other forces are also in play, including the growth of low-wage work, new immigration, and the effects of the Great Recession—each of which appears to have affected suburbs in particular.
One consequence of these shifts is an urgent need for more affordable housing in the MSP region, particularly in suburbs. Twenty-two percent of suburban renters, and 25 percent of Minneapolis and St. Paul renters, pay more than one-half of their income toward rent, a threshold that indicates severe housing cost burdens. As regional stakeholders address growing demand for affordable housing, they increasingly encounter unique challenges in serving the suburban poor, who may live in communities that are disconnected from job opportunities or social services, or may be unable to relocate to higher-opportunity areas due to limited affordable housing throughout the metropolitan region.
CommonBond Communities has operated in the MSP region for more than 40 years. Today, it is the Midwest’s largest nonprofit provider of affordable housing integrated with services, with nearly 5,500 units of affordable housing throughout Minnesota, Wisconsin, and Iowa.
In contrast to many other affordable housing providers in the MSP region, CommonBond has been active in suburban communities for 25 years. Today, the organization has 1,938 units in suburban communities, representing 37 percent of its total portfolio. CEO Paul Fate credits the organization’s suburban success to the following factors:
- Building on strong regional foundations. The MSP region provides a strong policy backdrop for CommonBond’s work. For example: the Metropolitan Council, a regional governmental agency, establishes affordable housing goals for each community in the metropolitan area. (Under the 1976 Metropolitan Land Use Planning Act, communities are required to incorporate projected demand for low- and moderate-income housing into their land-use plans.) Greater MSP, a metropolitan-wide economic development group, supports further regional cohesion on those issues.
- Educating leadership. CommonBond has teamed with organizations to educate local decisionmakers about affordable housing. The Urban Land Institute (ULI) Minnesota monthly convenes the Regional Council of Mayors, composed of 20 area mayors, to discuss, among other topics, how to provide a range of housing choices throughout the metropolitan area. In conjunction with ULI Minnesota and MSP−based Family Housing Fund, CommonBond also participates in “Navigating Your Competitive Future” (previously “Navigating the New Normal”), public education sessions that engage local leaders in conversations about regional demographic trends and the critical role that sufficient housing choices play in a community’s economic competitiveness.
- Forging community partnerships. CommonBond invests time and resources to identify and work with trusted local partners to deliver new suburban projects. In the western suburb of Plymouth, CommonBond teamed with Interfaith Outreach and Community Partners, a highly regarded local nonprofit organization, which now delivers services at CommonBond’s affordable housing sites in the suburb. Similarly, in the eastern suburb of Maplewood, CommonBond worked with the Benedictine Sisters of St. Paul’s Monastery to engage community members and develop new, affordable housing and a family shelter on site.
- Integrating services with housing. CommonBond’s model of integrating services on site—its Advantage Services program—helps many low-income residents overcome some of the challenges they face in accessing needed services, particularly in suburban communities. In family developments, these services focus on school success for children (e.g., tutoring, mentoring) and economic success for adults (e.g., job training, financial planning). In senior developments, social services and preventive care support independent living in old age. CommonBond tailors these services to the service provider’s local environment.
- Blending diverse funding streams. CommonBond’s experience and financial expertise enable it to combine dollars from multiple sources to address community needs. Like other successful, large-scale affordable housing developers, CommonBond finances affordable housing developments using a mixture of conventional bank loans and community development investments, low-income housing tax credits, historic preservation tax credits, U.S. Department of Housing and Urban Development (HUD) programs such as the Community Development Block Grant (CDBG) and Section 202, philanthropic grants, and program-related investments. An important component of CommonBond’s suburban activity is the preservation of existing affordable and federally subsidized rental housing in addition to new construction.
Accomplishments and Challenges
CommonBond’s success is evident in the thousands of units of affordable housing it has delivered in MSP suburbs, the integration of those developments and their residents into the economic and social fabric of those communities, and the increasing ease in getting such developments built.
Nonetheless, CommonBond and its partners continue to face challenges to meet the demand for high-quality affordable housing opportunities in the region:
- Demand for affordable housing continues to outstrip supply. CommonBond has more than 100 properties in Minnesota, Wisconsin, and Iowa, but the waiting list includes more than 5,000 people—the equivalent of nearly 60 percent of the total population currently living in CommonBond housing.
- Local zoning requirements in some suburban and exurban areas impede housing choices. Many second- and third-ring MSP suburbs require minimum lot sizes of two to five acres. This low-density development does not accommodate multifamily housing, nor does it promote residents’ easy access to nearby services and transportation options.
- Municipal fragmentation in the region means that CommonBond must cultivate and maintain countless local relationships to advance its projects successfully. Administrative fragmentation mirrors municipal fragmentation: in the 14 Minnesota counties that form the MSP metropolitan area, a dizzying 28 Housing and Redevelopment Authority (HRA) offices administer federal housing programs.
Implications for Policy
CommonBond’s approach to serving urban and suburban communities in the MSP region is efficient and effective; however, it is not easy to replicate the scale, expertise, and institutional trust CommonBond has accrued in four decades of work in its communities. Yet policymakers could help move more programs and organizations toward CommonBond’s successful model by:
- Allowing high-capacity, affordable housing providers greater flexibility in managing their properties as a portfolio by, for example, encouraging the use of financing across multiple developments, rather than siloing funds by individual projects. This would permit entities such as CommonBond to achieve and reinvest cost savings, raise larger amounts of capital, and allocate rental assistance strategically across properties.
- Increasing support for on-site services in affordable housing to promote family stability and senior independence, and control health care costs. (With easier access to preventative care, individuals are able to avoid expensive emergency room visits.) Partnerships between health care providers and housing developers could help fund new arrangements like CommonBond’s Advantage Services.
- Preserving and strengthening national and local policy tools that require communities and/or providers to assess their affordable housing needs, such as HUD’s Affirmatively Furthering Fair Housing proposed rule and the Metropolitan Council’s affordable housing goals, and tying assessment exercises to the kinds of tools and conversations that CommonBond and its partners have used to help MSP−area communities understand the role of expanded housing options in improving community prosperity.
Photo credit: Flickr user Joe D