Housing Visions and
Shortsightedness
By Doris Rubenstein, PDP Services
Minnesota Business, May, 2002
It seems that workforce housing is
getting a lot of attention these days from many different sectors
of our community.
In November, 2001, Housing
Minnesota organized the first Minnesota Housing Convention. The
economic impact of workforce housing was underscored by the
results of a recent study, called “Workforce Housing: The Key to
Ongoing Regional Prosperity” prepared in September 2001 by
Maxfield Research for GVA Marquette Advisors/Real Estate
Counselors. The report brought out these points:
- Job growth will create the
need for 26,800 new workforce units over the next five
years.
- Private developers may lose
about $31,000/unit for owner units, and $43,000/rental unit.
That means there is a need for about $1.5 billion in gap
funding.
- The metro area loses $128
million in consumer spending, and $137 million in income
from the prospective workers who cannot find housing.
- A $1.5 billion subsidy
for new workforce housing will generate a net gain of $12.2
billion to the regional economy over the next fifteen years,
or $8.13 in economic benefits for $1 invested.
This particular conference was
unique in that nearly a third of the participants were connected
in some way to businesses in housing construction and development.
Few other recent workforce taskforces, representing local and
state government units, non-profit institutions, and faith-based
organizations, can boast such participation. In fact, there’s
seems to be a disconnect between the advocates for workplace
housing and those who can provide it?
The Minneapolis Regional Chamber of
Commerce recently appointed a high priority task force to address
workforce housing. Let’s look at who’s on the Chamber of
Commerce task force. There are 29 members: Five represent
non-profit organizations, none of which are dedicated to housing.
Three are connected to government. Two are part of educational
institutions. The rest are businesses. It’s a good mix of
finance institutions, builders and developers, and consultants
with a good smattering of other high-profile companies mixed in.
Now let’s look at some of the
coalitions for affordable housing and who is involved with them.
- The Family Housing Fund lists
of officers and directors have 23 members. Four are from
business (none in construction or housing management), ten
are from government, and the rest are non-profits.
- The Minnesota Housing
Partnership board of directors lists among its 18 members
four for-profit institutions on the board, including one
company involved directly in housing: Fannie Mae.
- MICAH (Metropolitan Interfaith
Council on Affordable Housing) has one member on its
17-member board who does not represent a non-profit
organization: Stuart Management Corporation.
Of the profit-making institutions
on these boards, the majority are banks. They provide the mortgage
capital for buyers and loans to the builders. In sum: just 9 of 58
board members, or barely fifteen percent, represent those who
finance or manage housing and none represent for-profit builders.
That fact is that there is little
cross-over between those who represent constituencies who need
housing for their workforces, those who will be co-beneficiaries
of increased housing by providing services to those new homes, and
those who need the homes on the boards of these organizations. Yet
they all are concerned with and clamoring for workforce housing.
The need for workforce housing is
undeniable. The benefits of investments and subsidies are clear.
What we need now is for government, business and housing advocates
to find a neutral forum for working together to solve this
problem. They must open their respective doors wider, and be more
welcoming to differing view and approaches. If they don’t,
everyone loses. When they do, everyone wins.
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