Regional HUD Administrator, Mayor Frey, and Chair Fernando Join Minneapolis PHA to Celebrate 16-Site, 84-Unit Modular Family Housing Grand Opening

Date Published: 
September 26th, 2023

From the Minneapolis Housing Authority's press release:

Today, U.S. Department of Housing and Urban Development (HUD) Great Lakes Regional Administrator, Diane Shelley, Minneapolis Mayor Jacob Frey, and Hennepin County Board Chair Irene Fernando joined MPHA staff, residents, and partners to celebrate the grand opening of the first of 84 new deeply affordable family homes across Minneapolis.

“Today is a historic day for the agency, welcoming home the first of 84 families to their beautiful new homes,” said Abdi Warsame, Executive Director/CEO of the Minneapolis Public Housing Authority. “This innovative modular project demonstrates the power of partnership among local governments to address our region’s affordable housing crisis. This successful project creates a blueprint for MPHA and housing authorities across the country to deliver quality, cost-effective, deeply affordable family housing.”

“Every American, regardless of their life experience, deserves a place to call home,” said Diane M. Shelley, HUD’s Great Lakes Regional Administrator. “I am excited to witness how HUD’s investment in these new homes, in partnership with other agencies and businesses, will help families level their opportunity to succeed and thrive in a beautiful new community.”

“The grand opening today is another step forward in our efforts to provide all Minneapolis residents with safe, stable, and permanent housing,” said Minneapolis Mayor Jacob Frey. “Today isn’t just about new public housing – it’s about constructing bridges to brighter futures and providing foundations for families to thrive in this city. I am incredibly grateful to MPHA, and our federal and county housing partners, who continue to partner with us on this important work.”

“The Family Housing Expansion Project meets so many of Hennepin’s priorities,” said Hennepin County Board Chair Irene Fernando. “In partnership with MPHA, we are changing what’s possible for some of our most vulnerable friends, family members, and neighbors.”

The Family Housing Expansion Project (FHEP) will bring 26 two- and 58 three-bedroom units in fourplexes and sixplexes to 16 sites across Minneapolis. These new buildings will be a part of MPHA’s deeply affordable scattered site family housing portfolio. Sixteen of the units will be disability accessible, with another 17 being high-priority homeless units with services funded through Hennepin County’s Coordinated Entry program. The agency estimates these 84 new homes will be able to serve approximately 420 families over the next 30 years. This project is the agency’s largest new-unit development in more than two decades.

Projected to be fully completed within 13 months after its financial closing (and less than a year since its groundbreaking), FHEP includes several innovations that make it different from a typical housing development. Building 84 units on 16 sites is a highly unusual approach that provides families with housing options they can afford in many different neighborhoods. Using a modular construction approach has resulted in less noise and fewer neighborhood disruptions at each site while delivering the project 30 percent faster than a conventional construction approach. The first families are moving home in September, with the agency estimating the final units being available to families in December.

The agency maintains more than 700 deeply affordable family homes scattered across Minneapolis through its wholly owned and controlled nonprofit, Community Housing Resources (CHR). These homes account for more than 80 percent of the MPHA housing available for families with children. The agency maintains a family housing waitlist that has recently been as many as 7,500 people, with more than 80 percent of those on the agency’s waitlist being households of color. This new project aims to address the significant unmet demand for this kind of housing.

These scattered site homes are a critical piece of city infrastructure, as they are a proven tool to provide families with a solid foundation for upward mobility. Of the nearly 3,100 residents currently living in CHR homes, 87 percent are Black/African American, 55 percent are ages 17 or younger, 85 percent of households are female-led, and two-thirds of the households have five or more family members living there—families with young children.

Of the current heads of household, 19 percent were employed when entering their new home. On average, these residents earned $20,722 a year in income. Today, 67 percent of these residents are employed, earning an average of $34,225 a year, with more than 60 percent of these residents’ earned income increasing while in these homes. Better yet, between 2020 and 2022, 17 percent of all families leaving CHR homes went on to purchase their own homes.

From FHEP’s inception, MPHA residents have been involved in every step of the process. Before the agency conducted any external engagement, agency staff sat with residents to understand what should be prioritized in any new-unit developments. The agency created a resident design panel, connecting residents with project architects to provide guidance on everything from layout designs to finishings used on surfaces throughout the new units. The unique resident-led approach afforded project architects invaluable insights, including an emphasis on maximizing storage space throughout the units not previously considered.

The Family Housing Expansion Project was made possible through financing across various partners. This included $19.9 million in equity from Low-Income Housing Tax Credits (US Bankcorp Impact Finance), a $12.5 million contribution from MPHA, a $8.9 million permanent loan to cover project costs (Citi Community Capital), $4.6 million in federal ARPA dollars awarded from the City of Minneapolis, a $1.4 million Local Housing Incentives Account (LHIA) award from the Metropolitan Council, a $1.2 million award from the City of Minneapolis’ Affordable Housing Trust Fund (AHTF), and a $500,000 award of Hennepin County’s Affordable Housing Development Accelerator fund. US Bankcorp Impact Finance provided a $25 million construction loan via Housing Revenue Bonds issued by Minneapolis’ Community Planning and Economic Development department. The project also benefitted from more than $500,000 in equity through solar tax credits, which nearly doubled because of the recent federal Inflation Reduction Act. The project’s solar system (361.6 kW) is projected annually to cover nearly 30 percent of all electrical consumption in the new homes.

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