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267702 WHITE - CITV CLERK PINK - FINANCE � GITY OF SAINT PAUL � Council �����`� � CANARV - DEPAR ENT BLUE - MAVO File NO. r ' - Co cil Resolution Presented By ' Referred To Committee: Date Out of Committee By Date WHEREAS, the need for a metropolitan housing policy is well recognized by St. Paul and the city stronglq supports development of such a plan by the Metropolitan Counci.l; and WHEREAS, the City of St. Paul has received the Metropolitan Council's draft of its Hou�ing Policy Plan which is to be part of the M�etropolitan Development Guide; and WHEREAS, much of the proposed plan consists of policy which the City can strongly support or which is already supported by adopted City policy; and WHEREAS, the City in part icular, supports the major thrusts of the proposal, which call for additional housing resources for lower-income households outside the areas where they are currently concentrated and efforts to ensure the availability of affordable housing for all income groups; and WI�I� �AS, the City of St. Paul has not had adequa.te time to sufficiently review the full proposal in depth, particularly its potential impact on central cities; and WHEREAS, there is a need for a comprehensive metropolitan housing study to be conducted, including a market analysis, in order to have accurate in- formation on which to base such a housing guide; NOW THEREFORE BE IT RESOLVED, that the City of St. Paul enter for the record of the Metropolitan Council the attached comments; and BE IT FURTHER RESOLVED, that the City of St. Paul recommends that the Nletropolitan Council delay passage of the Housing Policy Plan to provide municipalities with additional time to review the proposal and for a metro- � politan housing stud to be conducted. COUNCILMEN Yeas Nays Requested by Department of: Butler Hozza [n Favor Hunt Levine �� Against BY il��w Sylvester Tedesco �'� 1 '� � Form Approv d by City A rney Adopted by Council: Date Certified P�_sed ounc.il Secretary BY ` ► B Approve Mayor: Date s Approve Mayor for S b is n t!`Councii By BY Pus��sH�n AuG 2 i 197� �, � � "�.�-, o ? � . Following are the City of St. Paul's comments on the Housing Policy Plan proposal. Unfortunately, the time allowed for review and comment does not begin to be adequate for such a Iengthy and complex document with so many important implications. Certainly the need for a metropolitan housing policy is we11 recagnized by St. Paul and the city can strongly support development of such a plan by the Metropolitan Council. Because of the nature of the housing market, housing problems cannot be adequately addressed at the municipal level alone. Much of the present proposal consists of policy which the city can strongly support or which is already supported by adopted city policy. Ma�Qr thrusts of the proposal - additional housing resources for lower-income households outside the areas where they are currently concentrated, and public/private efforts to ensure the availability of affordable housing for all income groups - are obviously in the best interest of the city as well as the entire metro- politan region and can be supported by the city. Beyond this, in the interest of time and brevity, the comments which follow are limited primarily to areas where questions need to be raised. I. Perhaps the most important comment to make is that the plan seems to be based upon very little real information about how the housing market functions in the metropolitan area. Powerful economic forces and real ma.rket preferences of various population sub-groups will determine, to a very large extent, the future of housing in the area. Housing is provided by a market system; census statistics documenting "need", while - 1 - ' - 2 - . useful and necessary, do not tell us much about what builders will build or consumers will buy. We have previously spoken to the need for much better housing market analysis for the metropolitan area, and this plan proposal raises innumerable questions that such an analysis would help ta answer. A metropolitan housing analysis should include study of the supply/demand factors affecting the metropolitan area as a whole as well as sub-regions within the area, housing inventory of existing tmits and condition data, analysis of land economics and factors influencing development. Until such a study has been completed, the necessary information needed to formulate meaningful housing policy is lacking. The Housing Policy Plan should not be approved until a housing analysis has been conducted and the results used to amend the current draft. 2. The plan essentially proposes no further reliance- on the traditional "filter down" model of the housing market process to deliver housing to low and moderate ineome households. Rather, it places great emphasis on new construction to meet low-income needs. To some extent this is necessary i.f we are to: (a) realize more Zow-cost housing resources in newer suburban areas and; (b) relieve pressure on older neighborhoods to meet low-income market demand. However, such a strong emphasis on the production of low-cost units leaves some questions unanswered: Just how will the production of such units affect the used-housing ma.rket in fully-developed areas? If we strip all codes and ordinances to bare minimum to achieve ' low-cost housing, what will be the impact on the future quality of the residential environment in developing areas? Howe can we � - 3 - ' impact the market system to make sure that we make the most effective possib.le use of the existing housing stock to meet the needs for all income groups? _ 3. Additional housing resources for lower-income households are needed in suburban communities. NeverCheless, it is not appropriate to . simply rule out any additional subsidized housing in presently-lower- income city neighborhoods, or those areas, where redevelopment is � required. a. While the plan talks about "reversing present trends" some trends currently affecting the cities are not recognized. There are indications that renewed demand for central city housing _ is a significant force in the area housing market: a foree which may have considerable importance for the future and significan,t implications for pablic policy. Some older neigh- �� borhoods i.n the central cities are being "reclaimed" by higher- income population groups through the private market. The typical pattern when this occurs is a complete changeover over a period of time. Housing opportunities for low and moderate income households are eliminated because of rising property values. The provision or retention of housing resources for lower-income households in central city neighborhoods, when and as they are significantly improved through public and/or private renewal ' activities, is a challenge which the plan does not adequately address. - 4 - . b. Policy 83, which rules out subsidized housing where redevelopment occurs, is in conflict with policy 87 which notes the need for ' citizen participation in planning for older areas. Presumahly, the result of citizen participation is redevelopment which is responsive to the needs of the citizens. If redevelopment is responsive to the needs of the current residents of low-income areas, it cannot ignore the need for good quality housing affordable to low-income households. A blanket statement that "no further subsidized housing should be built in these areas" is unrealistic and unnecessary, particularly if large-scale redevelopment is considered and "subsidized housing" includes 80 percent market rate new construction under the Section 8 program. Additional co�ents on specific policy proposals fallow: Policy 15: We believe an analysis of the market should be made before builders are asked to construct smaller homes without garages and with fewer amenities. Policy 16 should perhaps be qualified to include: "where it has promise of contributing to greater availability of good quality housing at reasonable costs." PolicY 23 and other policies related to subsidized housing and central ' city neighborhoods: New construction for subsidized housing is Section 8 housing at the present time. Under Section 8, projects should be at - 5 - least 80% market-rate. Therfore, Section 8 new construction will help to reduce existing concentrations of lower-income households, and may be the only, or the most effective way of doing so in some cases : ' in city neighborhoods. We are not at all sure that high-rise con- struction for families is desirable even if the qualifications spelled out in this policy are met and wonder why this provisioa should be made; current HUD regulations prohibit such construction. Policy 30: Suggested modifications to the Section 8 program to provide for large families are most important. We agree strongly with this policy statement but don't see that the Council's plan includes any specific program measures designed to encourage the production of units to meet large family needs. Policy 40: It appears there is a possibility for conflict of interest in this area. The Metropolitan Council has the power to estabZish a housing allocation plan for the metropolitan area and it has a housing implementation arm--the Metropolitan HRA--which is competing with the HRAs in the central cities for housing subsidies, which are in short supply. A possible solution would be for the Metropolitan HRA to be established as a separate independent agency with a lay board and that it divest itself of all ties with the Metro- politan Council. - 6 - . Policy 42: The discussion with this policy suggests that "consumers. . . should be receptive to new and innovative forms of housing and home ownership". But no information is presented as to whether or not such � receptivity has been well demonstrated in the area housing znarket. Apparently, a major problem for condominium development in the area is the Iack of adequa.te regulatory legislation with protection for lenders. The plan should include some proposals to meet this need. Policy 43: Multi-family housing must be appropriately situated to ensure an adequate living environment just as much as single family fiousing. But the requirements are different, and an appropriate site for multi-family development ma.y well be an "inferior" site for single- family housing where the direct relationship to the exterior environment at ground level may be more critical and economies of construction do not allow for special measures to mitigate environment deficiencies. � Further, it is not clear just why multi-family housing should not, in many cases, serve a "buffer" function between single-family and other land uses. Policy 60: "Land Use Plans" do not usually deal with most of the factors raised in the discussion of this policy related ta safety and security. Many of the important factors have more to do with project design and project ma.nagement. - � - . Policy 69: We agree with the basic intent of this policy. However, the objective of a "population distribution similar to the metropolitan area as a whole" is going to require some continuing concern for the retention of housing resources for low and moderate ineome households - ' in city nei�;hborhoods as n.oted above. Poli"cy 74: We are not sure that current ma.rket experience justifies a grant program to encourage middle-income families to purchase in marginal neighborhoods. (a) This kind of purchase may be happening at an adequa.te rate anyway; and (b) A grant might not be very significant given the risk-taking spirit that is required anyway, and the long-term investment considerations. Again, we need to know more about the market. Policy 75t A house-recycling program along the lines suggested by this policy is underway in St. Paul with only limi.ted results to date. This �, approach to so-called "underutilized" housing is questionable. It can lead to greater dependence on the construction of specialized housing for elderly households which may not be needed in the future. It can only work satisfactorily where alternative housing for the elderly homeowners exists and is desired by them, and where there is middle- , income-family ma.rket demand for the house. Under these corcditions it is questionable why the public acquisition is required. - 8 - . Policy 76: This policy does not seem to recognize that HUD promotes Section 8 developments for non-elderly families which will serve up to 20 per cent lower income families with the rem,aining 80 per cent to be market rate housing. The introduction of Section 8 housing into a lower- � income neighborhood can actually increase the percentage of middle and upper-income families in lower-income neighborhoods. This inconsistencg should be clarified throughout the Housing Policy Plan. Policy 82: What does it mean to say "Whenever possible, land should be assembled on a scale sufficient to permit the development of a new residential environment that includes a full range of services and facilities?" There• are situations where this is necessary. But it may be just as important, or more consistent with today's development economy, to find every opportunity to accomplish redevelopment at a sma.11 scale where it can be integrated with the historic fabric of the community. Policy 83: The plan suggests that cleared land in deteriorated neighborhoods be held for long-term future re-use, a policy which appears to be infeasible, given the pressure to get cleared land back on the tax rolls. It is also contrary to HUDTs desire to }aave vacant land disposed of as quickly as possible. Perhaps the Housing Policy Plan should propose interim uses for cleared land, with State tax reimbursement if the land is to be held over an extended period for future re-use. - 9 - . Comments concerning the distribution plan of part 3• The allocation formula in Section III raises some questions about its potential effect on St, Paul, such as: would the formula outlined in the Housing Policy sezve to perpetuate existing housing• patterns? how does it provide a method for encouraging the proper mix of the various income levels throughaut the metropolitan area? how could it be altered so that low and moderate-income residents of the center cities have as many housing options as low and moderate- incame residents of other municipalities? If the formula is implemented in its present form it appears that the progortion of poorly-housed persons in the center city cauld increase. And that low and moderate-income persans outside the center city could generally be better housed than similar groups in the center city. A few comments concerning some of the proposals of part 4c Implementation: 1. Housing Court (p. 4-3) Examples exist of housing courts wi.th County jurisdiction. This might be desirable in our case to include more of the highly developed area and avoid singling out the central cities for this focus on housing problems. 2, Tax Reimbursement (p. 4-3) The proposal calls for State re- imbursement of property taz�es for subsidized housing pro�ects which pay only 50 per cent normal property tax. This recommenda- tion should be expanded to include all public housing projects which pay no property tax. Y ' , , - 10 - 3. Stronger alternatives to the truth-in-housing act should be considered, such as some form of occupancy certificate which would require agreement to some degree of code eompliance at . the time a property is transferred. 4. It is not clear from local experience or from studies of other programs that deferred assessments are an eff ective incentive for praperty improvements. This is not a strong enough measure to get at the problem which present tax policies present for home improvement. 5. It is not clear that financial incentives, such as grants to middle-income purchasers who will re-invest in older existing housing are necessary given current market trends (which we. _ don't know much about). 6. With reference to the guidelines for ranking subsidized new construction proposals (p. 4-22) : Our experience suggests that .�- the priority to be given to joint family/elderly buildings is not consistent with market demand. A St. Paul experiment with one high-rise indicated that elderly households genera.11y have a strong preference for all-elderly housing. 7. It might be more desirable to seek legislation for a housing maintenance code which would be applicable to the seven county metropolitan area, instead of attempting to establish a state- wide ma.ndatory housing maintenance code which ma.y not have the support of legislators from the rural and smaller couIInunities. . • - , - 11 - 8. While we support the intention of several proposals to improve housing conditions (Housing Court, Code Enforcement, Truth-in- Housing, etc.) , neither funding sources nor cost implications are addressed by the guide. Unless outside funding sources could be obtained, these programs might result in increased housing costs for consumers rather than providing good quality housin g at affordable costs. �,