The URL can be used to link to this page

6.0. HRSR 10-22-2001 Item # 6 City of Elk - .-� River MEMORANDUM TO: Housing & Redevelopment Authority FROM: Catherine Mehelich, Director of Economic Development DATE: October 22, 2001 l' SUBJECT: City of Elk River Housing Plan 2001-2005 Attachment • City of Elk River Housing Plan 2001-2005 Issue Lisa Graphenteen of the Central MN Housing Partnership will present the results of the recently completed City of Elk River Housing Plan 2001-2005. The Mayor and City Council have been invited to attend the presentation. Background At its February 2001 meeting the HRA authorized the Central MN Housing Partnership to complete an analysis of the housing market condition of the city. Recommendation The Housing Plan suggests a variety of strategies that may be considered depending on the role the City wants to play in addressing the identified issues. Depending on the amount of time available, staff recommends the HRA continue a discussion about the results of the housing plan at its November regular meeting. In the past the HRA has not taken an active role in addressing housing issues, nor has housing been a priority identified through the Strategic Economic Development Plan. The strategies may be a good topic for further discussion by the HRA, EDA and City Council during the update of the Strategic Plan in 2002. • • Citi of Elk. Rguer 2001 - 2005 • 71'ousinj Pian • • The 2001 — 2005 City of Elk River Housing Plan was developed by the Central Minnesota Housing Partnership. Demographic, Housing and Employment data found throughout the • study was provided by Admark Resources. This project was funded in part by the Initiative Foundation, a regional foundation and the Minnesota Housing Partnership. • • Executive Summary Introduction The Central Minnesota Housing Partnership in collaboration with the City of Elk River has developed the Elk River Housing Plan to identify local housing conditions and to plan for future housing need. The Housing Plan includes an analysis of local demographic, employment, and housing trends in Elk River. Based on the analysis demand estimates were developed through 2005. Study Area A primary study area was selected for the community which includes the City of Elk River and portions of Dayton and Otsego. Most housing demand for Elk River will come from persons that live or are employed in the study area. While this area serves as a primary study area it should also be noted that the community does draw from a much larger area that would include a large portion of Sherburne County,Northern Wright County, and Northwest Anoka and Hennepin County. A map of the study area is located on page 2. Demographic Trends • Elk River is a thriving community located in the southeast corner of Sherburne County. The community is located off U.S. Highway 10 and 169 and is only 35 miles from 111 downtown Minneapolis. The community is also within 40 miles of St. Cloud. These factors have and will continue to make this area prime for new development. • During the past ten years the City and surrounding area has undergone substantial population and household growth. During the past ten years the City has added 5,304 persons and 1,932 households for a 47.6% and 51.8% increase, respectively. According to the 2000 Census the City has a total of 5,782 housing units. • The largest population growth has occurred in the 25 to 44 and the 5 to 17 age categories. This signifies that growth in Elk River has primarily been from families with children. The median age of Elk River in 2000 was 32. • The 2000 median household income was projected at $53,583 for the Study Area. The largest household segment are those ages 35 to 44 which have a median household income of$60,549. • In addition to being ideally located between two major employment centers, the City also offers a multitude of employment opportunities. Nearly all major employers classify the local economic climate as good with many existing employers experiencing job growth over the past few years. The largest growth over the past ten years has occurred in the Trade Sector in Sherburne County. • • Housing Trends • A high demand for housing and low vacancy rates for the area have caused housing prices to rise substantially over the past ten years in Elk River and the surrounding area. • The City has a very tight rental housing market with a low vacancy rate of 1.7% according to the 2000 Census. A current rental analysis found an even lower rate of 0.5%. The average cost of a two-bedroom apartment is $670. A household would need to earn approximately$12.90 per hour to afford the average two-bedroom apartment. The average industrial wage in Elk River was $11.54, which could only afford a rent of $600 per month. • The homeowner vacancy rate is also low at 1.4%. Housing values have increased substantially in Elk River. In 2000, the median sales price was $160,000 with an averages sales price of$174,820. To afford the median sales price of$160,000, a household would need to earn over$50,000 annually. • Households age 25 to 34 are typically your first time homebuyers looking to purchase entry-level homes. The median household income for this age segment is $49,319 which could afford to purchase a home priced at approximately$156,000. • A comparison of the average wages paid by industries in Sherburne County found that most are not sufficient to afford the median cost of a home in Elk River and some sectors • would not be able to afford the average cost of a two-bedroom apartment. The lowest wages are found in the Trade and Services sector. • The JOBS NOW Coalition found that the living costs in Region 7W are 14% lower than the metro area,but the average wages were 31% lower than the metro area. The study also found that the hourly wage required to meet basic needs was $13.84 for a two-parent household(1 earner) with two children. The average hourly wage according to the Minnesota Department of Economic Security is $12.65. • Housing Demand The following are the recommended number of units for the community through 2005 to meet area housing needs: Housing Demand City of Elk River 2000-2005 Single Family Housing Rehabilitation 30 to 50 units Rental Housing Rehabilitation 20 to 30 units Low-Income General Occupancy Apartments 24 to 36 units Affordable General Occupancy Townhomes 48 to 72 units Market Rate General Occupancy Apartments 64 to 96 units Market Rate General Occupancy Townhomes 50 to 70 units Market Rate Elderly Apartments 30 to 50 units Elderly Patio Homes/Cottages 10 to 20 units Affordable Single Family Housing 200 to 300 units Market Rate Single Family Housing 500 to 600 units *Terms outlined in the demand section are defined in latter sections of the plan. • Rehabilitation As housing units begin to age, they will start to show signs of deterioration. Housing rehabilitation, which is the repair or replacement of essential components of the homes, is essential to maintaining a community's housing stock over a long period of time. Major housing rehabilitation activities look to improve problems in a home that may cause a health and safety issue or improve the energy efficiency of a home. Often times these are repairs that have substantial costs which often require some outside assistance through loans, low interest loans or deferred grants. Multi-Family Housing Elk River will have a demand for a variety of multi-family housing products over the next five years. Over the past ten years two general occupancy and one senior apartment have been developed in Elk River. Much of the multi-family housing development has been concentrated in for-sale townhomes. The following are the identified needs which are not listed in a priority order. The community needs a low-income general occupancy apartment in which rents are based on 30% of a households income. A project of this nature would primarily serve households with incomes at 30% or less of the area median income based on family size. For a family of four this would be an annual salary of$22,410 or$10.75 per hour. There is very little funding available • for a project of this nature; therefore it is not included in the final recommendations as the probability of it being developed is unlikely. - i The City also has the need for affordable rental options primarily focused on a townhome-style development. While all housing options should be affordable to a household by not exceeding 30% of that households income, affordable in this context refers to units that typically serve those earning less than 60% of the area median income. For a family of four these units would serve households earning less than$44,820 per year. Hourly this would equate to a single earner household at approximately$21.50 per hour. Market rate units do not carry any income restrictions and a project target towards general occupancy would not carry any age restrictions. While these units are primarily targeted to serve those earning over 60% of the area median income, households earning less than this can also occupy the units. The community will also have continued housing needs from its elderly population. Most subsidized programs define elderly as those age 62 and over. For a market rate unit the scope should be broadened to include those age 55 and over. In addition to apartments, patio homes/cottages are another form of living to accommodate seniors. Designs for patio homes vary but many have features such as one-level living, associations to maintain landscaping and snow removal, and are developed on smaller lots. Single Family Housing The development of single-family housing will be the largest housing need in Elk River through 2005. Costs illustrated for single-family housing include the total development cost of both the • land and the home. Based on the existing market the largest demand for homes will be those priced over $150,000. These homes will also be the easiest to achieve based on local costs for new construction. The community has a demand for homes priced under$150,000. These will be harder to achieve based on the existing market. Townhomes are one form of development that can assist in meeting much of this demand as they tend to utilize less land for development. Other incentives and methods, which are described later, can also be utilized to achieve this housing. The key aspect found in these recommendations is that the City of Elk River is going to need a diversity of housing types to meet future demand. The demand for homes priced over$150,000 will be the easiest need to meet. Many of the other housing demands will require varying levels of participation by the community. A balanced housing stock is a critical component for a community and the following strategies outline varying degrees of changes or initiatives that can be undertaken by a community. • • Housing Strategies The following strategies outline potential methods in which a community can ensure a balanced housing stock for its residents. A community should work to maintain a balanced housing stock to house employees along a continuum of incomes from day care workers to teachers to business owners. With housing communities can assume three levels of responsibility. The first is a policy level in which communities can make changes to local policies and plans to support a balanced development of housing. The second level is an intermediate level where communities can provide letters of support, and financial or technical support. The final level would be an advanced level where a community may not only finance a project but assume an ownership role as well. The following outlines activities along all three levels where a community could become involved. Rehabilitation • Define a target area of Elk River by analyzing age of housing, valuation of housing and the condition of housing to establish a rehabilitation target area. • Have information available for residents on programs that are available for housing rehabilitation including but not limited to Rural Development, Tri-Cap, and MHFA. • Sponsor an application to the Small Cities Development Program to receive funds for owner-occupied and rental rehabilitation that can be used by property owners to make essential improvements. Multi-Family Housing • Identify land/parcels within the community that can be utilized for the development of multi-family housing. • Provide financial/resource assistance to projects that will develop affordable rental units. • Examine sites/areas that can be redeveloped to provide additional housing. Single-Family Housing • Develop an inclusionary housing ordinance that sets a standard for affordable housing development in new subdivisions. • Provide incentive such as reduced lot sizes, street widths, or fees for developers who incorporate affordable housing into developments. • Work with area employers to establish a homeownership savings program. Other • Sign resolutions of support for projects that are seeking funding from an outside agency to develop affordable housing within the Community. • Make policy changes through the City Comprehensive Plan and Zoning Ordinance that support housing demand. • Conduct an employee survey to gauge information from employees working in Elk River. This tool can be used to gather a variety of information on housing, commuting patterns, • spending patterns, etc. It is important to note that the recommendations found within this study are based on housing • conditions and research conducted at the time of the study and it does not take into account any external changes that would potentially change the outcome of the study. This would include such items as industry layoffs, governmental restrictions, zoning, etc. 1111 • II) Population and Households Population Elk River is located in the second fastest growing County in the State of Minnesota according to the 2000 Census. The City has experienced extensive population growth over the past twenty years. During the 1980's, the City increased its population by 4,358 persons fora 64.2% increase. This growth trend continued in the 1990s when the City increased its population from 11,143 to 16,447, an increase of 47.6%. It is anticipated that the City will continue to have strong growth trends over the next five years due to its proximity to major highways and the Twin Cities Metropolitan Area. In addition, the City also provides numerous commercial and industrial opportunities for employment. Between 2000 and 2005 it is projected that the City will grow by 15.8%, an increase of 2,597 persons. The entire study area,which includes the City of Elk River and portions of Dayton and Otsego, has also experienced strong population growth. Between 1990 and 2000 the study area increased by 7,273 persons, an increase of 46.5%. For the next five years this area will increase by just over 15%, with the addition of 3,501 persons. Population by race data produced for the 2000 Census illustrate increases in minority populations in the community. Each race segment has increased over the past ten years. Minorities comprised an increasing percentage of the total population with the White alone segment declining from 98.6% in 1990 to 96.4% in 2000 resulting in a more diversified community. • Population Growth Elk River Study Area 1980-2005 30,000 "� 25,000 s � �� ,� ��.� e%gyp '� 20,000 �' 15,000 ? t. 1 u rad 10,000 - W � 5,000 4 F , 0 'fir. � .,,,. » -r' 1980 1990 2000 2005 • • Households Household growth in the City and surrounding area has been even stronger than the population growth. The largest percentage increase occurred during the 1980s when households increased by 77% in the City. This was an increase of 1,624 households. The entire study area increased by 1,805 households for a 54.3% increase. Strong growth continued through the 1990s with the City increasing by 1,932 households, a 51.8% increase. The entire study area increased by 2,608 households for a 50.9% increase. According to the 2000 Census, the City has a total of 5,664 households and the entire study area has a total of 7,736 households. Over the next five years it is anticipated that the City will increase by 982 households, for an increase of 17.3%. The remainder of the study area will increase by 16.5% and add 1,280 new households. Table 1 Elk River Study Area Population and Household Data 1980-2005 1980 1990 2000 2005 1980-1990 1990-2000 2000-2005 # # # • Population Elk River 6,785 11,143 16,447 19,044 4,358 64.2% 5,304 47.6% 2,597 15.8% Study Area 10,926 15,637 22,910 26,411 4,711 43.1% 7,273 46.5% 3,501 15.3% Households Elk River 2,108 3,732 5,664 6,646 1,624 77.0% 1,932 51.8% 982 17.3% Study Area 3,323 5,128 7,736 9,016 1,805 54.3% 2,608 50.9% 1,280 16.5% Source: 1980-2000 Census Claritas, Inc. CMHP • Household Growth Elk River Study Area 0 1980-2005 10,000 „i ,t ,. l 8,000 �" 6,000 .:.4,,w.: --o.Elk I 4,000 • St Ares 2,000l',Z;'-i %P 0 — 1980 1990 2000 2005 Population by Age Table 2 illustrates population by age for the City of Elk River between 1990 and 2000. Currently the largest age group in the City are those ages 25 to 44 which comprise 33.9% of the population. This age segment increased by 1,613 persons between 1990 and 2000, an increase of 40.7%. The second largest age group are youth age 5 to 17 which comprise 22.9% of the population. This segment increased by 1,189 persons for a 46% increase. These two age segments also represent the largest numerical increases between 1990 and 2000. • The largest percentage increase during the past ten years was found in the 55 to 64 age group which increased by 87.7%, or 490 persons. The second largest percentage increase was individuals age 45 to 54 which increased by 80.8%, or 877 persons. All age segments in the City increased by at least 25% during the past:sen years. The median age for the City of Elk River is 32.0 years according to the 2000 Censu Age Distribution City of Elk River 1990-2000 6,000 �"" 5,000 • i 4,000 3,000 ` ` 9( 2,000 '0.:',:-.,4:,!',:e 1,000 , 0 Under 5 to 17 18 to 25 to 45 to 55 to 65 t-i V i to 75 to 85+ 5 24 44 54 64 74 84 0 • Table 2 City of Elk River Population by Age 1990-2000 1990 2000 Change # % # % # % Under 5 1,032 9.3% 1,375 8.4% 343 33.2% 5 to 17 2,582 23.2% 3,771 22.9% 1,189 46.0% 18 to 24 1,109 10.0% 1,395 8.5% 286 25.8% 25 to 44 3,965 35.6% 5,578 33.9% 1,613 40.7% 45 to 54 1,086 9.7% 1,963 11.9% 877 80.8% 55 to 64 559 5.0% 1,049 6.4% 490 87.7% 65 to 74 404 3.6% 663 4.0% 259 64.1% 75 to 84 275 2.5% 454 2.8% 179 65.1% 85+ 131 1.2% 199 1.2% 68 51.9% Total 11,143 100.0% 16,447 100.0% 5,304 47.6% Source: 1990 and 2000 Census • • . Household Income Table 3 illustrates changes in household income between 1990 and 2005 for the entire study area. In 1990, the median household income was $37,997. During this period over 25% of households earned between $35,000 and $49,999 per year. An additional 22.7% of households earned between $50,000 and$74,999 per year. In 2000, the median household income increased substantially to $53,583. Incomes between $50,000 and $74,999 now comprise the largest income segment at 27.6%. Considerable increases were also seen in the $75,000 to $99,999 and the $100,000 or more income groups. These income segments increased by 9.8% and 9.3%, respectively. By 2005 the median household income is projected to increase to $60,451. Increases during this period will mainly occur in the upper income brackets with the largest percentage increase found in those households earning $100,000 or more. This segment will increase by 828 households for a 7.5% increase. Table 3 Elk River Study Area Household Income Data 1990-2005 • 1990 2000 2005 Number Percent Number Percent Number Percent Less than$10,000 385 7.5% 365 4.7% 375 4.2% $10,000 to $14,999 207 4.0% 320 4.1% 350 3.9% $15,000 to $24,999 662 12.9% 617 8.0% 584 6.5% $25,000 to $34,999 942 18.4% 648 8.4% 816 9.1% $35,000 to $49,999 1,292 25.2% 1,448 18.7% 1,295 14.4% $50,000 to $74,999 1,164 22.7% 2,137 27.6% 2,295 25.5% $75,000 to $99,999 328 6.4% 1,254 16.2% 1,525 16.9% $100,000 or more 148 2.9% 945 12.2% 1,773 19.7% Total 5,128 100.0% 7,734 100.0% 9,013 100.0% Median Income $37,997 $53,583 $60,451 Source: Claritas, Inc. • Household Income Elk River Study Area 1990-2005 $100,000 or more $75,000 to$99,999 , i $50,000 to$74,999 $35,000 to$49,999 $25,000 to$34,999 //36A $15,000 to$24,999 .' $10,000 to$14,999f z Less than$10,000 0 500 1,000 1,500 2,000 2,500 Table 4 illustrates household income by age for 2000. Households age 35 to 44 comprise the largest segment with 2,026 households and have a median income of$60,549. The highest median income is found in the 45 to 54 age segment with a median income of$66,739. Households between the ages of 45 and 64 tend to not only have the highest median incomes,but also have the most equity in their existing homes. Households between the ages of 25 and 34 are usually in the market for rental housing or are looking to purchase entry-level homes. The median income for this age segment is $49,319. With this income a household could afford monthly rent in the amount of$1,230 including rent, utilities and a garage. A household with this income could afford an approximate mortgage of $148,200. The lowest median incomes are found in households over the age of 75. Households over the age of 85 have the lowest median household income at $13,333 per year. Incomes drop dramatically after households reach 65 years of age. Incomes drop from $66,010 for households age 60 to 64 to $27,272 for households age 65 to 69. • Employment Employment is a critical component to the housing market. The nine largest employers are illustrated in Table 5. Each employer was interviewed to assess local economic conditions including number of employees,wages, historic and future growth, and the need for additional housing. During the past two years six of the employers have grown in size and the remaining three have stayed the same. All but one employer indicated that the local economic climate is good. A variety of employers indicated that they anticipate their businesses to grow over the next two years. The largest employer in the City of Elk River is the school district with 1,250 employees. The second largest employer is Sherburne County with approximately 470 employees. Most employers would not disclose average wage data to provide a general overview of approximate wages paid by area employers. A 1999 Business Retention and Expansion Survey found the Elk River average industrial wage to be $11.54 per hour. The Minnesota Department of Economic Security also produces wage survey information and found that the average hourly wage for the Manufacturing sector in Sherburne County was $18.35 per hour for the second quarter of 2000. Employers were also asked to comment on the local housing market based on their experience with employees. All nine employers indicated that more moderate-income housing is needed in the community. Just under 80% of the employers indicated that the addition of more moderate income housing would be of benefit to their business. Moderate-income housing is typically defined as housing for households earning 80% or less of the area median income. For Sherburne County this would be $60,320 based on the HUD 2001 median household income of $75,400. This would equate to rental housing that is generally priced under$1,500 per month including rent, utilities and garages. For homeownership this would be a maximum purchase price of$190,800. According to a 2001 Labor Force Assessment which was completed for Sherburne County, residents of the County commute a wide variety of distances to work each day. Commuting patterns indicate that residents are commuting to various locations primarily following a pattern along Interstate 94. The patterns are not heavily concentrated in one County or City. Approximately 35% of those surveyed traveled 0 to 10 miles to work one-way. For those that commute 46 or more minutes each way, they indicated they would take a median decrease of $2.40 per hour to have a 0 to 15 minute commute. On the other hand those that commute 0 to 15 minutes per day would need to earn a median increase of$7.00 per hour to drive 46 or more minutes with 47%indicating they were unwilling. The study also found that the largest share of workers had an annual pre-tax salary of$20,000 to $40,000. • • The National Low Income Housing Coalition developed a report on the hourly wage that is needed to afford rental housing based on the fair market rent. In Sherburne County the following wages are needed to afford fair market rents: Fair Market Rent(FMR) Income Needed Wage Needed One-Bedroom $674 $26,960/year $12.96/hour Two-Bedroom $862 $34,480/year $16.5 8/hour Three-Bedroom $1,166 $46,640/year $22.42/hour Table 5 City of Elk River Major Employers 2001 Employer Product or Service Employees Elk River ISD #728 Elementary and Secondary Education 1250 Sherburne County Government Offices 470 Guardian Angels Intermediate Care Facilities 325 Great River Energy Electric Services 320 • Tescom Corp Industrial Valves 275 Cub Foods Grocery Store 210 Target General Merchandise 175 Alltool Manufacturing Metal Stampings 160 Menards Lumber and Other Building Materials 160 Source: Community Profiles, DTED The following graph depicts some of the gaps between wages paid in certain businesses and the cost of housing. According to the Central Minnesota Employment Outlook to 2006 developed by the Minnesota Department of Economic Security, the fastest growing job in Central Minnesota will be the Home Health Aide which has an average hourly wage of$8.08. The wage is considerably lower than the average cost of a two-bedroom apartment in Elk River. The same is true of the Elk River average industrial wage which is at $11.54. This wage is only half of what is need to afford a$150,000 home. In Region 7W,which includes Benton, Sherburne, Stearns, and Wright County, the average hourly wage is $12.65. Only the Sherburne County average manufacturing wage of$18.35 is high enough to afford the average rent,but is still not sufficient to purchase a$150,000 home. • • Cost of Housing Wagese � a ' $25.00 v�a. $20.00 1111 f $15.00 v aA $10.00 o $5.00 ,`\ —Or 7 $0.00 , _ ,„,;./V-40'-',. ` .At.,'' ,.. Home Health Aide Elk River Industrial Region 7W Sherburne Co. Manufacturing io Table 6 shows covered employment by industry for Sherburne County. This table represents the number of jobs in Sherburne County,regardless of where the individual resides. Some categories such as some agricultural workers, railroad workers, student workers, and elected officials are not included in the data. All industries have increased in size between 1990 and 1999. The only sector to experience some loss in the latter half of the 1990s was the Transportation and Public Utilities sector which declined by 18 jobs. The sector with the largest increase between 1990 and 1999 was the Trade sector which added 2,380 positions for a 93.7% increase. The Trade sector includes wholesale and retail trade and would include such businesses as general merchandise stores,building materials, food stores, automotive dealers and service stations, apparel and accessory stores, furniture and home furnishing stores, and eating and drinking places. The second largest increase was found in the Services sector which increased by 1,516 jobs for a 91.2% increase. The Services sector includes a wide range of businesses with some of the largest being business services, health services, legal services, social services(excluding government), and numerous other services. The largest percentage increase was found in the Construction sector. Between 1990 and 1999 it increased by 138.5%by adding 763 jobs. The second largest percentage increase was found in the Finance, Insurance and Real Estate sector which increased by 121.1%with the addition of 310 new jobs. • • The City of Elk River completed an analysis of local industrial firms and found that the largest employment by industry was in the industrial machinery sector at 28%. Fabricated metal and electronic equipment were also large employers at 22% each. Table 6 Sherburne County Covered Employment by Industry 1990 1995 1999 1990-1999 1995-1999 # % # Construction 551 820 1,314 763 138.5% 494 60.2% Manufacturing 1,442 2,452 2,848 1,406 97.5% 396 16.2% Transportation and Public Utilities 1,296 1,579 1,561 265 20.4% -18 -1.1% Trade 2,539 3,708 4,919 2,380 93.7% 1,211 32.7% Finance, Insurance and Real Estate 256 383 566 310 121.1% 183 47.8% Services 1,663 2,476 3,179 1,516 91.2% 703 28.4% Government 1,892 2,631 3,096 1,204 63.6% 465 17.7% Total 9,639 14,049 17,483 7,844 81.4% 3,434 24.4% • Source: Minnesota Department of Economic Security Covered employment data is not only available for the number of jobs by sector,but also the average weekly wages for those sectors. The following graph includes three major components: the average annual wage by sector, the average cost of a two-bedroom apartment in Elk River, and the cost of a$150,000 home. This chart illustrates the gap that can be found in some sectors between the wages that are earned and what households can afford for both rental and homeownership. The largest housing gap is founa in the Trade and Services Sector. On average, if a single-earner household were working in eith-r of these sectors they would have a difficult time affording the average two-bedroom apartmen . Homeownership for people employed in these sectors is nearly impossible unless they have a d al income household. The Finance, Insurance and Real Estate (FIRE) sector also had a small ,tap between wages and the average rents. Most sectors do not have an av:rage wage sufficient to purchase a $150,000 home. The only sector with an average wage hith enough to afford a$150,000 home are those in the Transportation and Public Utili pies (TPU) sector. • ai/ r Averageso 4,46 ,, Annual Wages 5 } ' r,064 Sherburne County Ve pR'Apt:44 1999 e0' $50,000 00 . //ter EEE IIIIt M r„,. M, r a,I!t4u11u1' ,.,., ` !I ! ::;:: , ��` 4 � I zi r �� ... ° $20,000 00 01 •001 • '1 Mi, t,,,,,-, I •',7,, , $15,000 00 4 3 0 .i a \ V, r4 - $10,000.00 0w $5,000.00 / � \ � 3 0 '''A $0.00 Services Trade FIRE Government Construction Manufacturing TPU All Industries Table 7 illustrates employment and unemployment data for residents of Sherburne County, • regardless of where they work. The labor force in the County has been increasing since 1990. The largest increase in the labor force occurred between 1993 and 1994 with an increase of 1,818 persons. Between 1999 and 2000 another substantial increase was experienced with a labor force increase of 1,592 persons. Unemployment rates in the County reached their lowest level in 1998 with a 2.5%unemployment rate. The highest rate was found in 1991 at 6.0%. Since 1997 the unemployment rate has stayed below 4.0%. For the most part, the unemployment rate in the County has remained consistent with the statewide rate. With the exception of 1990, Sherburne County has had a lower rate than the national average. III Table 7 Todd County Employment and Unemployment Data 1990-2000 MN U.S. Labor Number Number Unemployment Unemployment Unemployment Year Force Employed Unemployed Rate Rate Rate 1990 22,462 21,187 1,275 5.7% 4.9% 5.6% 1991 23,210 21,815 1,395 6.0% 5.1% 6.8% 1992 23,891 22,499 1,392 5.8% 5.2% 7.5% 1993 25,402 23,907 1,495 5.9% 5.1% 6.8% 1994 27,220 26,130 1,090 4.0% 4.0% 6.1% 1995 28,543 27,427 1,116 3.9% 3.7% 5.6% 1996 29,578 28,354 1,224 4.1% 4.0% 5.4% 1997 30,936 29,904 1,032 3.3% 3.3% 4.9% 1998 32,580 31,766 814 2.5% 2.5% 4.5% 1999 32,932 32,040 892 2.7% 2.8% 4.2% 2000 34,524 33,418 1,106 3.2% 3.3% 4.0% iSource: Minnesota Department of Economic Security Employers in Elk River provide a diversity of employment opportunities in various sectors such as government, education, medical, and numerous commercial and industrial businesses. The City has made great strides in attracting businesses to their business parks and ensuring that space is available for new industries. The City is also working on redevelopment efforts for Downtown Elk River that will bring enhanced retail, office and housing space to the community. IP • Housing Data According to the 1990 Census the City of Elk River had 3,887 housing units. Data released from the 2000 Census indicates that the City has added 1,895 housing units for a total of 5,782 units in 2000. Another indicator of building trends in a community is the number of building permits issued although these do not always translate into new units. Table 8 illustrates building permit data for the City of Elk River between 1990 and May of 2001. During this period the City issued permits for 2,422 new housing units. Approximately 74% of the permits were issued for single- family homes. A total of 6%were issued for twin homes and the remaining 20%were issued for multi-family units. The multi-family category includes both rental and for-sale multi-family dwellings including townhomes. According to the 1990 Census, approximately 74.5% of the housing stock was owner-occupied units and the remaining 25.5%were renter occupied. The 2000 Census indicates that the percentage of owner-occupied units has increased to 78.3% and the percentage of renter- occupied declined to 21.7%. This decline in the percentage of renter-occupied units correlates to the lower level of permits issued for rental units in the community in respect to overall development. Development in the City peaked in 2000 with permits issued for a total of 284 new housing units. Construction looks to remain strong in 2001 with permits issued for 110 new units through May 11, 2001. The largest number of multi-family units were permitted in 1990 with 131 units. • Single family permits were highest in 1996 with 208 units. During the past ten years permits have been granted for the development of a variety of housing types. The number of multi-family permits has been slightly lower than the percentage of multi- family units that exist in the community, resulting in a decreasing proportion to the total housing stock. It does not appear that development is slowing in Elk River when examining 2001 building permit data. • • Table 8 City of Elk River Building Permits 1990-2000 Single Family Units Twin Home Units Multi-Family Units Total 1990 125 8 131 264 1991 107 0 4 111 1992 107 8 23 138 1993 122 2 55 179 1994 157 18 0 175 1995 173 26 68 267 1996 208 26 0 234 1997 182 24 19 225 1998 201 0 29 230 1999 177 0 28 205 2000 172 26 86 284 2001* 52 6 52 110 Total 1,783 144 495 2,422 iSource: City of Elk River *2001 permits are through 5/11/01 Table 9 illustrates the number of housing units in Elk River according to the year they were built. It should be noted that information included in the 1990 Census from 1989 through March 1990 has been included in the 1980 through 1989 range. It should also be noted that data has not yet been made available on age of housing through the 2000 Census, therefore it is assumed that new units added to the community during the 1990s were all new construction. The table would not account for any annexations of older homes into the community during this period. The Census only included units that were year-round housing and therefore there is a difference of 56 units from the total housing count. The largest number of units in the community has been built in the past ten years with the addition of 1,895 new housing units. Housing units built since 1970 account for over 78% of the community's total housing stock. The community does have just under 300 units that were developed prior to 1940. • • Age of Housing City of Elk River 2% 5% 5% '`" 10% 32% 1990-1999 ▪1980-1989 ,a, 1970-1979 01960-1969 15% 01950-1959 ®1940-1949 O 1939 or earlier 31% Table 9 City of Elk River Housing Units by Year Built Year Built Number of Units Percentage of Units O 1990-1999 1,895 33.1% 1980-1989 1,757 30.7% 1970-1979 836 14.6% 1960-1969 559 9.8% 1950-1959 284 5.0% 1940-1949 106 1.9% 1939 or earlier 289 5.1% Total 5,726 100.0% Source: 1990 and 2000 Census Multi Family Housing According to the 1990 Census the City had a total of 951 renter-occupied units which comprised 25.5% of the total housing stock. This number increased by 277 units to 1,228 renter occupied housing units according to the 2000 Census. The overall proportion of renter-occupied housing units has declined in the community over the past ten years. In 1990 renter-occupied units comprised 25.5% of the housing stock which declined to 21.7% in 2000. Multiple attempts were made to contact all rental projects with 12 or more units in the City. Information is presented in Table 10 for those projects which participated in the survey. A total of 447 general occupancy and 152 elderly units participated in the survey which accounts for • approximately 49% of the renter-occupied housing stock. General occupancy units consist mainly of market rate and tax credit projects. One subsidized • unit participated in the survey where tenants would pay 30% of their incomes towards rent. Rents listed for this project illustrate market rents. A total of 76 one-bedroom units were surveyed which comprise 17% of the general occupancy units. Rents for these units ranged from $335 to $650 per month. Over 65% of the general occupancy units surveyed were two-bedroom units. Rents for these units range from $480 to $828 per month. Three-bedroom units surveyed in the community ranged from $420 to $857 per month. A total of 138 one-bedroom and 14 two-bedroom elderly units were surveyed. Two of the three elderly projects surveyed were subsidized with tenants paying 30% of their income for rent. The other project surveyed charges $609 for a one-bedroom unit and$756 for a two-bedroom unit. Vacancies are extremely low among all types of rental housing in the City of Elk River. For general occupancy units the overall vacancy rate is 0.7%with only 3 vacancies at the time of the survey. Vacancies were nonexistent among elderly units with no units available among the 152 units surveyed. The overall vacancy rate for the units surveyed was 0.5%, which is extremely low compared to a healthy market of 5%. A healthy market allows for housing availability and consumer choice on various housing types and pricing levels. The 2000 Census had a slightly higher vacancy rate for the community with a 1.7%rental vacancy rate, which is still very low. Single Family Homes and Vacant Lots According to the 2000 Census, approximately 78.3% of the community's housing stock is • owner-occupied. The vacancy rate for homeowners is even lower than the rental vacancy rate at 1.4% according to the 2000 Census. Vacancy rates drop even more dramatically for the remainder of the study area with the City of Otsego having a vacancy rate of 0.5%. The Minnesota Department of Revenue produces data on the median sales price of existing homes for each County in the State. The following are home sales trends in the County since 1984/1985: 1984/1985 $57,300 1989/1990 $67,500 1995/1996 $95,000 1998/1999 $118,900 1999/2000 $129,900 This includes data for existing homes only and does not include the sale of newly constructed homes. Since 1989/1990 the median sales price has increased $62,400, or 92%. In 1999/2000, Sherburne County had the ninth highest median sales price in the State of Minnesota. Median sales prices in the City of Elk River tend to be higher than the overall County sales prices. The following information was obtained from the City of Elk River on the number of home sales in the City between 1997 and 2000. Since 1997,the median sales price in the City of Elk River has increased by 32%, which is an increase of over $30,000. • • Year Homes Sold Average Selling Price Median Sale Price 1997 253 $129,263 $120,900 1998 346 $139,470 $127,800 1999 340 $153,004 $142,559 2000 306 $174,820 $160,000 Interviews with area Realtors found that the average listing time for individual homes was approximately 60 days. Most existing homes in the community are ranging from $130,000 to $500,000. Newly constructed housing in the community is typically ranging from $165,000 to $600,000. Lots in the community are on average selling for$60,000 and above. A snapshot of the Multiple Listing Service also found similar data on the sale of homes in Elk River. Elk River had very few homes that were listed under $150,000 and would be considered affordable. To afford most of the homes that are listed at $200,000 or more a household would have to earn approximately$63,200 per year. All mortgage calculations found throughout the study are based on a 30-year mortgage at 7%with a 5% downpayment. A total of 54 homes were listed with the following price ranges: $100,000 and under 0 homes $100,001 to $150,000 2 homes $150,001 to $200,000 5 homes $200,001 to $250,000 16 homes $250,001 to $300,000 15 homes $300,001 and over 16 homes Between the 1990 and the 2000 Census, the City has added 1,895 housing units. Units built during this period will comprise 33.1% of the total housing stock. The second largest production of housing occurred between 1980 and 1989 when 1,757 new units were added comprising 30.7% of the housing stock. The community does have some older homes in the community which were built prior to 1950. These units comprise 7% of the housing stock with 395 units. • • Housing Demand The City of Elk River has experienced considerable population and household growth over the past ten years and is expected to continue to experience strong growth in the future. The area is ideally located in close commuting distance to both the Twin Cities Metropolitan Area and St. Cloud. In addition, the City offers numerous employment opportunities with a strong commercial and industrial base. Vacancy rates are extremely low in the community for both single and multi-family units. According to the 2000 Census the community had a 1.4% homeowner vacancy rate and a 1.7% rental vacancy rate. Housing demand for the City is calculated by utilizing a variety of factors. The first indicator is the expected household growth the community will be experiencing. A second factor is the pent- up demand which calculates the units that are needed to meet past growth and to allow for healthy vacancy rates. Finally,replacement needs are also factored into the housing demand. This represents a need for new units to replace older dilapidated units that are not suitable for habitation and are more economical to demolish than repair. This can also represent units that are functionally obsolete and not desirable by the market according to some feature. Table 10 City of Elk River Housing Demand 2001-2005 Forecasted Housing Growth 982 units Pent-up Demand 118 units Estimated Replacement Needs 5 units Total Housing Demand 1,105 units 30 to 50 units of single family housing rehabilitation 20 to 30 units of rental housing rehabilitation 48 to 72 units of affordable general occupancy townhomes 24 to 36 two-bedroom units priced at $600 to $750 24 to 36 three-bedroom units priced at $700 to $850 64 to 96 units of market rate general occupancy apartments 12 to 14 one-bedroom units priced at $600 to $750 14 to 22 two-bedroom units priced at $700 to $850 14 to 24 three-bedroom units priced at $800 to $950 50 to 70 units of market rate general occupancy townhomes 30 to 40 two-bedroom units priced at $750 to $900 20 to 30 three-bedroom units priced at $850 to $1,000 30 to 50 units of market rate elderly apartments 20 to 30 one-bedroom units priced at $600 to $700 10 to 20 two-bedroom units priced at $700 to $800 10 to 20 units of elderly patio homes/cottages 5 to 10 one-bedroom units priced at $650 to $750 5 to 10 two-bedroom units priced at $750 to $850 200 to 300 new affordable single-family units priced under$150,000 500 to 600 new market rate single-family units priced over$150,000 These demand estimates should also take into account recommendations that were found within the Downtown Market Analysis developed by Maxfield Research, Inc. A downtown redevelopment project could meet a substantial portion of the market rate apartments needs for both the general occupancy and the senior population. Strategies for Housing Development Growth projections indicate that Elk River will continue to face increased growth through 2005 • with a variety of housing options needed. The community has substantial needs in both the multi and single family housing market. Multi-Family Housing A variety of multi-family needs exist that can be met by both private developments and also through accessing programs available to provide more affordable housing. The community currently offers rental units that were financed through Low Income Housing Tax Credits. These are an excellent resource to develop a rental option that provides reasonably priced rents while providing quality housing. Projects that look to leverage resources including local contribution typically receive a higher priority. Every employer indicated that more moderate-income housing is needed in the community. As home prices continue to escalate in the community, employers may find even more difficulty with employees finding reasonably priced housing in the community. This can hamper hiring and potentially expansion efforts for area employers. A vital commercial and industrial base is key for a community to support the existing amenities and services that are provided. A collaborative effort could be initiated that partners with area employers to work through housing issues. Employers can participate in the issue by supporting efforts in various manners. In many areas employers have participated in numerous projects by providing land contribution, cash contribution, low interest construction loan, infrastructure contribution, or the purchase of low income housing tax credits. IP • Employers can also participate in activities that address the need for single-family housing. One resource employers can provide is to create a payroll saving match program to encourage homeownership. Employers can match contributions that employees make to a saving plan that will be used for downpayment and closing costs. Projects that include employer participation can not only access different funding sources,but they also often receive a higher priority when seeking additional financing options to develop a project. While the community does have a need to develop a low-income rental project where rents are based on 30% of income, there is limited funding to develop these projects. Therefore these units were not included in the recommendation section as in reality the Rural Development 515 program has a very limited amount of funding to construct any new units. Multi-family housing within the community will potentially be enhanced through the work of the Downtown Redevelopment Plan. As part of this planning process a variety of housing options are being considered including for-sale townhomes, market rate rental units, and senior rental units. These efforts would not only Provide additional housing opportunities for the community but would also assist in downtown revitalization. Senior multi-family housing is also a need within the community. Senior housing is vital to creating life-cycle housing that allows a transition for seniors into lower maintenance housing and that also opens up more"starter homes" for new families. Single Family Housing • The City of Elk River has a substantial need for the addition of new single-family homes. Through 2005 it is estimated that a total of 700 to 900 new units of single family housing are needed with the greatest demand for homes prices over$150,000. Much of the new construction within the community is meeting this price range. It will be more difficult to meet the demand for units priced under $150,000 where 200 to 300 new units are needed through 2005. Demand for this housing could be met through a variety of options. The first would be to incorporate various housing styles into new developments. A subdivision could include a mixture of housing types that would potentially add townhomes or more modest single-family homes to reduce the cost of the housing through increased density and reduced housing costs. More modest single-family homes can be developed utilizing similar design styles, but offer less finished living space with room for expansion. Twinhomes and townhomes are an option to provide more units and to reduce the costs of the housing. Another option would be to target programs that can provide financial and technical resources to create a subdivision that offers more affordable starter homes. Many communities have worked through the Building Better Neighborhoods Program of the Greater Minnesota Housing Fund to create appealing subdivisions that offer new single-family homes and multi-family housing. In addition to the Greater Minnesota Housing Fund resources can also be leveraged from the Small Cities Development Program and other resources. • It should be noted that while the demand estimates seem overwhelming for a community, 4111 permits for 2000 and a portion of 2001 have been issued which will meet a large share of this demand. Permits have been issued for this period for 394 housing units. Rehabilitation Although a vast majority of the City's housing stock is fairly new, the community still has just under 700 housing units that were developed prior to 1960. Some of these units are likely going through gradual disrepair and a rehabilitation program would assist in maintaining these units. Efforts to improve housing units in the community can be approached on an individual or larger community scale. At an individual level homeowners could work with Tri-Cap to access the MHFA Rehabilitation Loan Program which offers a 0% deferred or fix-up loan or the Weatherization Assistance Program to qualified homeowners. Another option would be to take a larger approach to rehabilitate a neighborhood or targeted area of the community that consists of older housing stock. A program that offers a larger impact to a community would be the Small Cities Development Program. This program can offer deferred loans to qualified homeowners to make essential repairs to homes that help remove health and safety issues and to improve energy efficiency. This program is also available for rental rehabilitation activities. In addition to rehabilitation, funds can also be used for new housing construction. A list of eligible activities is found in the resource section. It should be noted that all the programs have some type of eligibility requirements and are not available to all households. Funds are also limited and/or awarded on a competitive basis for • these programs. While the City does have a vast need for multiple types of housing, it is important to note that these recommendations are based on a conservative estimate of need through 2005. Development of these units at one period would likely result in an over saturation of the housing market. The housing market is continually changing and as such should be examined on a regular basis when working to implementation components of the housing plan. • • U0 0 V O' V ,-� O O N 0 0 0 0 0 0 0 8 0 0 0 cdM c73O Vl M 00 N V7 N ONr4 1 — 0o kr) �) O co N = I M b4 NNO NN H4 H9 M 1 CT C t oo N N I N co P41 pa v-) N in O N N in tn a) W i---- P4 P4 N N 69 cn 7r c 69 c d4 N N d9 P4 69 9 69 b4 69 69 Ef3 69 kr) ry O OIn _ O � Vl in O P4 PO \O VCD Ml � 7 Pa O O ,- -3 69 69 69 cM ---rl c�9 b9 b4 H9 M M Es9 H4 pzO „ ,�_, N co --4 0o O O O O pa co O O 4'1Pt" OE P4 � v E , O vD N d' 7r V) N -4 N r- , 1 i~i N O N O • c _ ; _ I. NN O N WPC:t P4 a)MI Phi y = N N M M N M O u> O 7r PP \O N mN O co ,-a ,- O O 7r N N •-, M M �O ,_-+ c0 \O z) M M N N N —i NM N N N O\ cn M O O .--( O, N Z, 1-, ,--4 M �O ^" 00 Q\ co O\ 00 co c0 co N N N M -, 00 (T 00 pa Q\ a\ O\ D\ O\ O\ O\ C7\ O\ O\ D\ ✓ Q� O� O� ,--� w w w w — w ,--i w w .--i .-••i 1-1 ,--i U (L) b VI H U 0 w' s-i F 44 A4 0 a) 0 N a) p? g 6 0 P4 41 E Itii , cz3 Iv! W'd Q -bO 'd ct O O 0 x - g H PO 'd CU _4_, O 'd — O .4 c '_ •y g c cc � S". O 0 o 9 O O • Pl-i P4 Q 4-1 W PG �l P-1 = 124 4 E••- P-i U` Q W [i cd0 d, • Funding Resources for Housing Activities Note: The following information lists the primary resources available for housing development and rehabilitation activities and is not an all-inclusive list of resources that are available. Minnesota Housing Finance Agency To provide for a simplified and collaborative effort twice a year the MHFA issues a request for proposals through their two housing divisions: the HOMES Division which includes programs for home ownership, home improvement, and rehabilitation loans and the Multifamily Division. The RFP is a method where project no longer apply for specific programs but request funding for a specific housing development that meets a local housing need. These consolidated programs include some of the following resources in addition to some resources listed under the Greater Minnesota Housing Fund. Housing Trust Fund Three types of activities can be funded through the Housing Trust Fund including capital, operating subsidy(both operating support and project based rental assistance), and tenant based rental assistance. Funds are generally awarded in the form of a zero interest deferred loan for construction, acquisition, preservation, and rehabilitation of low-income rental housing. Eligible applicants include a non-profit, for-profit organization, limited dividend entity, cooperative housing corporation, a local unit of government, an Indian Tribe, a Joint Powers Board established by two or more cities, individual, or a private developer. Note: Rules for this program are currently under review and are subject to change. • Economic Development and Challenge Program This program includes the consolidation of the following programs: ARIF, MURL, Employer Matching Grants, and Community Rehabilitation Fund. The program provides grants or loans for the purpose of construction, acquisition, rehabilitation, construction financing,permanent financing, interest rate reduction, refinancing, and gap financing of housing that supports economic development activities or job creation in an area. Minnesota Families Affordable Rental Investment Program (MARIF) Provides a first mortgage or subordinated loan for the new construction or acquisition and/or rehabilitation, of permanent rental and permanent supportive housing with a minimum of four units. Units assisted with MARIF funds must be occupied by family households who at the time of initial occupancy are current or recent MFIP participants. Innovative Housing Loan Program Provides interim loan financing to housing developers to encourage the use of innovative construction methods, materials, equipment, design, marketing or financing in the rehabilitation or development of single or multi-family housing. Low Income Housing Tax Credits Low income housing tax credits provide reduced federal income tax liability for qualifying property owners who agree to rent to low and moderate income tenants. The funds can be used • for all costs associated with a residential development. • Historic Tax Credits Any project utilizing historic tax credits must be a designated historic or a contributing member of a designated historic district to be eligible. They can only be used in conjunction with the rehabilitation or conversion of an existing structure. Community Activity Set-Aside Program (CASA) Provides lenders, local government and/or non-profit housing providers with set-asides of MHFA mortgage revenue bond funds to provide low interest rate financing for homeownership opportunities. Other programs administered by MHFA that are not included in the RFP include: HOME Program Rental Rehabilitation Grant Program Provides grants by utilizing Federal HOME funds for the rehabilitation of existing rental properties. Funding is coordinated through a local administrator which is the Central Minnesota Housing Partnership. Deferred Loan Program This program assists low-income homeowners in financing home improvements with 0% deferred loans. This program is available through local Community Action Agencies. Great Minnesota Fix-Up Fund This program provides low interest loans to assist homeowners in making housing improvements • that increase the livability and energy efficiency of existing housing. Greater Minnesota Housing Fund Multi-Family Development Assistance Three types of assistance can be provided for affordable multi-family rental housing. They include gap financing, interim financing and employer assisted housing. Gap financing provides 0 to 1% interest deferred loans with the term matching that of the project's first mortgage. Interim construction financing is available at a 0% interest rate for developers during the construction period. Finally, matching funds are available for multi-family projects that have a significant commitment from local employers. Single Family Assistance The Greater Minnesota Housing Fund has three programs which fund activities related to single family homeownership and include gap financing, homebuyer education financing, and entry cost assistance. Gap financing is typically structured as a 0% interest, deferred second mortgage loans that are due on resale. Gap financing can be structured through different programs including the Building Better Neighborhoods Home Initiative, the New Home Construction Program, and Employer Assisted Housing. GMHF also provides funding for pre and post purchase homebuyer counseling. The Central Minnesota Housing Partnership is the primary provider of homebuyer education in Central Minnesota. • Funding is also available to assist homebuyers with down payment and closing cost assistance. Entry cost assistance can include local down payment assistance programs, employer assisted housing, and partnering to participate in the MHFA Entry Cost Homeownership Opportunity (ECHO)Program. Department of Trade and Economic Development Community Development Block Grant— Small Cities Development Program Local Units of Government are the applicant with the Local Unit establishing terms, target areas and uses. Eligible uses are acquisition and demolition, site improvement, rehabilitation, assessment abatement, down payment/closing costs, construction costs, and administration costs. Redevelopment Grant This program provides grants to development authorities (cities, counties,port authorities, HRAs, and EDAs) for land acquisition, demolition, infrastructure improvements, ponding, environmental infrastructure and other eligible redevelopment costs. Grants pay up to 50% of redevelopment costs for a qualifying site. USDA Rural Development Rural Housing Home Loan Provides fixed-rate loans to low to moderate income families for new or existing single-family homes. • 504 Program Provides low-income homeowners with loans or grants to make necessary improvements. Grants are only available for very low-income households, 62 years or older. Rural Rental Housing Loans Provides funds to build,purchase, and repair apartments along with rental assistance for low- incomes residents. Public Facilities Program Grants and low interest loans for public facilities Central Minnesota Housing Partnership The Central Minnesota Housing Partnership offers a broad range of housing services. The following are some samples of the programs and services they offer including: Home Rental Rehabilitation- CMHP administers these funds which are used to assist owners of affordable apartments make needed repairs on their buildings. Affordable Mortgage Products—CMHP now originates loans to better serve rural communities with affordable lending resources. CMHP works with local lenders to access more resources resulting in the most affordable payments possible. • • Gap Financing—CMHP collaborates with the Greater Minnesota Housing Fund and local lenders to provide individuals/families experiencing an affordability/value gap with interest free financing. Project Packaging and Technical Assistance—CMHP provides technical assistance to communities and organizations developing housing projects including new development, preservation, or rehabilitation. They also assist in assembling a financial package for the project including grant writing. Minnesota Housing Partnership Predevelopment Loan Program Provides loans up to $50,000 to cover a variety of expenses necessary to finance, design, or plan a housing project for low to moderate income persons prior to acquiring, constructing or rehabilitating a PJ typicalexpenses Some ex enses may include architectural, engineering or other Professional fees; processinand financing expenses; and consultant or staff costs related to project planning or funding proposals. All expenses covered through this loan program must be reimbursable by permanent development funders. Federal Home Loan Bank The Federal Home Loan Bank of Des Moines provides low-cost short and long-term funding and community lending to participating institutions. Funds are available for new construction gap funding,rehabilitation gap funding,homebuyer assistance, construction financing, and funding • for infrastructure. Other Resources Community Action Agencies Local Community Action Agencies have funds available through their weatherization program that can assist homeowners in making repairs that provide a more energy efficient home. Funds are typically available for both repairs and energy assistance. Many agencies also administer funds through MHFA's rehabilitation loan program. Essential Function Bonds Revenue Bonds that are issued by the City or an Authority of the City(EDA). The Bonds are sold to investors and are backed by"good faith" guarantees of the City. The funds can be used for any costs associated with the new construction or rehabilitation or conversion of residential rental property. Tax Increment Financing State law enables cities,port authorities, housing and redevelopment authorities, and economic development authorities to administer development, redevelopment, or rehabilitation activities that are financed by the increase in property taxes generated by the activity. This tool can be used to redevelop blighted areas, construct low and moderate income housing, along with many other development activities. Habitat for Humanity Central Minnesota has numerous Habitat for Humanity chapters that could potentially assist with housing projects. The Minnesota Affiliate list includes the following chapters: Aitkin County Habitat for Humanity Lakes Area Habitat for Humanity, Brainerd Carlton County Habitat for Humanity Habitat for Humanity of Morrison County Wright County Habitat for Humanity Central Minnesota Habitat for Humanity, St. Cloud East Central Minnesota Habitat for Humanity serving Pine, Isanti, Chisago, Kanabec and Mille Lacs County •