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HomeMy WebLinkAbout07-18-08 City of Lakeville ' ~ Community and Economic Development Memorandum To: Economic Development Commission From: David L. Olson, Community and Economic Development Director Copy: Steve Mielke, City Administrator ..Adam. Kienberger, Economic Development Specialist Date: July 18, 2008 Subject: July Director's Report Reminder: There is no 7uly Meeting of EDC. The next meeting is scheduled for August 26th. The following is the Director's Report for July of 2008. Building Permit Report The City issued building permits through the end of June with a total valuation of $36,064,894. This compares to a total of $79,678,468 during the same period in 2007. Included in this valuation were commercial and industrial permits with a total valuation of $8,783,900. This compares to a total valuation of $21,681,600 during the same period in 2007. The City issued permits for 72 single family homes through June with a total valuation of $19,119,000. This compares to 120 single family home permits during the same period in 2007 with a total valuation of $31,933,000. The City issued permits for 13 townhome and condo units through June which compares to 72 townhome and condo permits issued during the same period in 2007. First Park Lakeville First Industrial received approval from the Planning Commission for its second one lot plat for abuild-to-suit 285,000 SF office/distribution center for Uponor. Attached is an article that recently appeared in the Minneapolis St. Paul Business Journal on this project. This second plat for First Industrial is scheduled to be considered by the City Council on August 4t" Eureka Township Annexation The City Council at their July 7th meeting approved an ordinance to annex 97 acres of land in Eureka Township on the east side of Cedar Avenue owned by Airlake Development Inc, (dba Hat Trick Investments LLC.) The City agreed to a one time lump sum property tax reimbursement to Eureka. Township in the amount of $5,000. The annexation still needs approval by the State of Minnesota Office of Boundary Adjustments. This is anticipated to be completed by the end of August. Foreclosure Update Attached is the monthly update on foreclosures in Dakota County provided by the Dakota County CDA. There have been 139 Sheriff .Sales as a result of foreclosures in Lakeville through June of this year. This compares to 199 for all of 2007. This. City is in the process of formalizing its policies in dealing with these properties. Money Magazine-Best Places to Live Lakeville ranked 26t" out of the top 100 best small cities to live in the most recent list released by Money Magazine. Plymouth, MN was ranked number one in the Country. Three other cities in Dakota County made the top 100 including Eagan, Apple Valley, and Burnsville. Pioneer Press Series of Articles on Affordable Housin4 Attached is a three-part series of articles by Bob Shaw of the Pioneer Press on the issue of affordable housing in the metropolitan area. 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PAUL , July 4, 2008 Breaking news all day on the Web: minneapolis-stpaulbusinessjournal.com ~ Vol. 26, No. 4 $2.00 .v ' l~ t . o ease aunt e 25~ ~ ~ a v' a 'n s r'a Demand for industrial space dropped 6y industrial parkin Lakeville. The real estate investment trust will,' A LOOK SACK half in the past year, a report says. Page 36 The company plans to move from try to capitalize on the momentum a slightly smaller facility in Burnsville, of the Uponor deal when it' breaks.. BY SAM BLACK but its Apple Valley U.S. headquarters ground later this month on a sepa- The Business Journal STAFF WRITER will stay in place: rate, speculative 282,000-square-foot marks aquarter-century Uponor USA has signed a lease for Chicago-based First Industrial industrial warehouse on another site of breaking news. Page 15. a 285,000-square-foot distribution Realty Trust is developing the build- in the park. There are no tenants yet center thatwill kick off a new 137-acre ing as part of a new industrial park. for drat building. UPUNOR ~ PAGE 36 UPONOR: flew distribution center in Lakeville will be much more efficient FROMPasE, than the old one in Burns ville enough of the land was developable. LAlfEUtLLI: Dave Olson, Lakeville's community and "Even with the economy and housing mar- g economic development director, said First ket and fuel issues going on, we still feel bullish 35 215th Street W. o Industrial has taken the natural wetlands on the economy," said Craig Patterson, senior into account and done a good job collecting development officer for Chicago-based First First Park and filtering the water on the site so that it Industrial. "This is being proactive and getting Lakeville doesn't affect the trout habitat in the nearby ready for 2009 ° Vermillion River. First Industrial plans to have both its spec building and Uponor's new building designat- cooling U.S. housing market, said Dan Hughes, All about efficiency ed as Leadership in Energy and Environmental Uponor's real estate and development manager. First Industrial's bet on the industrial mar- Designprojects, meaning that they meet state- Sales have been helped by the rising price of ket in Lakeville was influenced by corporate of-the-art green standards. copper. About 70 percent of its sales comes from America's drive for leaner operations. Mendota Heights-based RJ Ryan plastic piping used in residential and commer- "What we see here and around the country Construction Inc. is the general contractor of cial plumbing jobs in place is companies needing to improve their supply both buildings, and Wayzata-based Mohagen of copper. The company chain. They say if they can make their products Hansen Architectural Group is the designer. i. ~ .also makes radiant under- move in and out more efficiently, to save even Brokers Scott Frederiksen, Bill .Ritter, Ryan ~ floor heating and cooling one day in the supply chain, that's a benefit for ICrrmarzickandEricRossbach,allofNlinnetonka- k ~ . products designed to save them," Patterson said. based Welsh Cos., are listing the speculative ~ ~ energy for building owners. Uponor's new distribution center will have building for lease. CB Richard Ellis brokers Ray ~ Uponor is constantly a simplified layout to aid circulation of prod- • Reese and Brian Fogelberg represented Uponor `~5~,,4,` I expanding its facilities, ucts in the building and on the loading docks. in its site search. Hughes said. It recently It also will have ceilings that are 10 feet taller ' Hughes completeda38,000-square- than the old building, so there will be about 3 Investing. in down market foot expansion to its million more cubic feet for storage. Uponor USA, a division of Finland-based 210,000-square-foot headquarters in Apple Uponor Corp., makes building materials. such Valley. It's plannh~gto build a 6,000-square-foot sblack@bizjournals.com ~ (612) 288-2103 as plastic-extruded pipes that substitute for lab next to its office this fall and is working on a those made of copper. deal to buy a 15-acre site next door to eventu- When the new distribution. center is com- ally build a training center, Hughes said. plete in early 2009, Uponor will relocate about 40 to 50 employees from its 270,000-square- Lakeville's second park foot distribution center on Highway 13 in The new industrial park, named First Park Burnsville. That 38-year-old building is also Lakeville, is two miles east of Interstate 35 at UPONOR USA owned by First Industrial. the corner of Dodd Boulevard and County City: Apple Valley Uponor, the largest private employer in Road 70. It borders the nearly full first phase of Parent company: Uponor Corp., Helsinki, Finland Apple Valleywith about425 employees, report- theAirlake Industrial Park. Executive vice president, North American region: ed sales in North America last year of $233 mil- First Industrial's investment there will be Anders Tollsten lion, up about 1 percent from the year before. more than $30 million. Construction of the Business: Makes plastic plumbing pipes, Ithadbeengrowingatabout 15 percentannu- Uponor and speculative buildings will cost at .radiant heating and cooling equipment, ally for the past several years but was hurt by the least $10 million each, and the land cost First sprinkler systems and other products Industrial $11.5 million. Employees: 425 in Apple Valley, 40 to 50 at In 2006, Indianapolis-based Duke Realty distribution center in Burnsville E:: `~Y''~~ Corp. had the same area under con- Founded: 1620 in Virsbo, Sweden ' ~ tract but decided to pass because not Web site: www.uponor.com ~ _ - _ " k ~ ' - PROVIDED BY UPONOR Uponor USA makes buildin materials such as 4~~ 9 1 - - plastic-extruded pipes that ~ o~ ~ substitute for copper. 3-~ C~ Pik E Dakota County ~ ~ ~ ~ ~ 1 Community Development Agency ~Gt?~~~~~~ -MEMO July 14, 2008 TO: Dakota County Cities From:Dan Rogness, Director of Community Revitalization Re: Foreclosure Update Some of you may have heard about "upside-down" mortgage holders in the news recently. These are struggling home owners who owe more than their homes are worth. The CDA's foreclosure prevention counselors are seeing these situations nearly every day within Dakota County. In fact, an estimated 9 million homeowners are upside-down in the United. States, according to Moody's economy.com, a division of Moody's Analytics. Consider this recent example in Dakota County: City: Farmington Houser 1998 single-family split; 2,500 square feet Purchased: March 2007 for $320,000 Current County Estimated Market Value: $279,800 (payable 2009) Sheriff Sale: May 2008 for $336,740 One way for a homeowner to solve this dilemma is through a "short sale," which will result in a sale price that is less than the amount owed on the loan. Any liens must agree to the lower amount as full satisfaction of the mortgage. Junior liens may also ask the former home owners to enter a repayment agreement for the portion of the loan not paid through the sale. In other information, please note that the May Notice of Pendency numbers have been updated since the June E-news was sent. Notice of Pendency's for the last week of May were inadvertently not counted last month. We apologize for any inconvenience this may have caused. Dakota County Stats -June 2008 • # of Sheriff Sales in June - 176 (compared to 89 in June 2007) • Total Sheriff Sales for 2008 - I , 106 (compared to 668 Jan. June, 2007) • # of Notice of Pendency's Filed in June - 259 • Total Notice of Pendency's Filed for 2008 - 1,404 _ NfJM_~ Dakota County ~ FZ5 H Community Development Agency ~~~~~1Z A Notice of Pendency is filed by a mortgage company's attorney as official notification that the foreclosure process has begun. Not all of these result in sheriff sales. Pages 3 and 4 of this PDF file have statistics for each city of Sheriff Sales and Notices of Pendency. Mapping Using Dakota County GIS http:!lgis.co.dakota.mn.ustwebsiteldakotanetgis! The Dakota County Office. of GIS is updating the 2008 Foreclosures and Notice of Pendency layers on a monthly basis. If you need assistance using this Web page, please call Randy Knippel or Mary Hagerman with the Office of GIS at (952) 891--7081. In The News Provided in this PDF file are a few notable foreclosure articles that were published in the. last month. Among the points of interest: • With the resetting of adjustable-rate mortgages, the mortgage foreclosure crisis is poised to continue through 2008 and into 2009. Forty percent of more than 50,000 subprime loan payments will increase this year: • Additionally, foreclosures and delinquent payments were the highest on record going back to 1979 during the first months of 2008. Slumping home values have caused Americans' home equity to drop to the lowest level on record in figures going back to the end of World War IL • An article on the economic plight of Dakota and Scott County residents. Along with mortgage foreclosures, food shelf visits are also on the rise. Combined with falling property values, the trends suggest that budget preparations will be uncommonly turbulent this fall in the east-metro suburbs. • The FBI has ordered more than two dozen of its field offices, Minnesota among them, to stop investigating some financial crime so agents can focus on the mortgage fraud involved with the subprime crisis. Last fiscal year, which ended Sept. 30, the FBI received almost 47,000 so-called Suspicious Activity Reports detailing potential mortgage crimes. In the first half of 2008, already 38,000 reports have been documented. • A national story on creative tactics cities are using to stop foreclosures and keep owners in their homes. With projected economic losses of $166 billion this year for 361 metropolitan areas, some cities are suing lenders. Minneapolis is one such city currently engaged in this type of litigation. If you have any other concerns, please call me at (65 I) 675-4464 or send me an email at drogness~dakotacda.state.mn.us. ~ V N O : N ~ N O~ O~ ~ 'a' ~t'1 N d' N ~ ~ N N N N - ~ ~ - - 00 - O~ u1 111 - *.t.' ~ 7 ~ y ~ ^ C O~ ~O i11 O~ O p N V O Z N ~ V u O N c O j.l 'a:+ ~ N ~ C ~ =O ~ U ~ DA a ~ y ~ Q d C y~ 0 v C~C C U H p~ L Qyj 2 L ~ M N ~ ~ - - ~ - ~ ~ O~ N ~ ~ ~ cOV U ~ L ~ 0 N '[t' ~ N ~ ~ N N ~O ~ ~ tr1 N O ~ ~ L ~ p 3 a N N N N~ O. N M O~ ON t11 ~ T ~ ~ H Q ~ > • ~ L U • ~ 0 Q • ~ ~ N N - O~ art' N M N ~O O 00 111 v, ~ • N O ~ • ~ ~ G • L ~ ~ M u1 O ~p O~ - O - Op t~'1 ~r1 ~ ~ ~ ~ ~ W N N N - N - ~ u ~ v • ~ M O~ N O M- M-- 00 N 1~ N N ~ A • ~O ~ ~ • V ~ • O H t R ~ • Id a+ o ~ ~ s N ~ ~ ~ o . ~ s ~U. ~ ~ y _ ao = ~ u° v~ ~ ~ ~ ~ ~ ~ ~ ~ y ~ caa ~ ~ o ~ w- V > > bo ua t9 ~ c ° N ~ J o _ - ~n V d ~ i i ~ ~ ~ ~ ~ 7 d ~ F ~ O Q ~ O- 3 R3 ld ~ ~ Id O O O ~ O ~ LL N QmW W= ~J~OGVf~Vf 1- O ~Z ° N ~ N ~ d ~ " ~ C ~ ~ p ~ ON ~ ~ ~ 00 ~ ~ _ ~ ~ ~ ~ y O N - N - ~ a- ~ ~ c O 3 V' - p d' ro ~ 0 ; a.+ O ~ z a ~ = O O ~ Z ~ o c`~d ~ L ~ e~ {.7 y .D ~ u ~ ~ ~ O O «S i ~ ~ N ~ d ~ C CC O N C '1.1 O C N U C i a_T ~ U ° V v QO a ~n ~ ~ ~ s ~ ~ V _ ~ C L11 ~ v O ~ O 3 N N u t~ p = LO 'L L ~ M M N ~ M ~ M N ~ 00 - ~ ~ Q O N O ~ o V o V v ~ ~ s ~ ~p 'd' - - ~ N O~ O eNd ~ ~ T~ M M M M - - M ~ N - - ~ N ~ ypi ~ L ~ O L ~ ~ ~ L ~ _ R~ ~ N ran N ca+'i N d" .o N N ~ N~ O 3 Id N V • a O ~ ~ ~ ~ r~ M N N N M 00 N^ N N ~ O c Q • ` - N m p ~ • a`~.o a~i ~ L ~ M Lf'1 M O~ M~ N M O~ M A N ~ ~ LL Q• LL N M N- N - ~ O d O ~ V? «s u • ~ O 41 • ~ N N rN Q` d' ~O ~ M N ~ ~ Z ~ A • V ~ • ~ ~ V ~ • _ _ cC O • ~ t c a ~ ~ 3 ~ ~ ~ V ~ > ~ ~ O ~ ~ H V J ~ a~ ~ c U Q. i ld ~ ' ~ ~ •d = ~ ysi ~ ~ ~Q,,, Z vtO, O. ~ cd ~ G7 ~ L Z Q m W LL J~~ N~ Vf O ~ y Home mortgage reset' shock to hit suburbs Page 1 of 3 ~r~~'tbun£~~colt~ ~ ?~I.L' r_',~~.~~LS T. ~'AIaL~, I~Ti:~r~~~GT~. Home mortgage'reset'shnck to hit suburbs By MIKE MEYERS, Star Tribune June 1, 2008 The foreclosure crisis in Minnesota continues and is now poised to spread from cities to suburbs. In large swaths of the Twin Cities and across the state, 40 percent of more than 50,000 subprime loans wilFjump to higher payments this year. Another 22 percent will reset after this year. In Twin Cities suburbs, where home construction once boomed, hundreds of square milesare dotted with the homes of tens of thousands of subprime borrowers wha will skid into higher monthly payments in 2008. Seventy-seven percent of such loans were taken out after 2004. Older, urban neighborhoods have already seen a cascade of foreclosures in recent months. Declining interest rates could provide a respite for some, but the breather on ,higher payments maybe short-lived. "Foreclosure rates, certainly for 2008, will remain high and, in some places, at historical levels," said Michael Grover, an author of a new study published by the Federal Reserve Bank of Minneapolis. "We certainly are not out of the storm." Indeed, by one measure, the study may understate potential economic troubles ahead for tens of thousands of Minnesota homeowners. The numbers in the Fed study, supplied by First American LoanPerformance, encompass most but not all subprime mortgages, note authors Grover and Andreas Lehnert, an economist with the Federal Reserve board of governors. The figures include an estimated 70 percent of all Minnesota subprime mortgages and 95 percent of "Alt-A" mortgages home loans that didn't require proof of income, demanded little or no .money down or were otherwise unconventional. In the universe of subprime loans, only-about 59 percent of subprime loans were current, as of October 2007, the Fed study found. Almost 87 percent of Alt-A loans were current. ' "Some have spread rumors that the foreclosure crisis. is on its last legs," said Brandon Nessen, executive director of Minnesota ACORN, a nonprofit organization that counsels financially troubled homeowners. "From where we sit, the foreclosure crisis is going to continue through 2008 and into 2009," he said. Falling rates help To be sure, falling interest rates in the last several months should offer some help to http:/Iwww.startribune.com/templates/Print This Story?sid=19428529 6/12/2008 Home mortgage 'reset' shock to hit suburbs Page 2 of 3 subprime borrowers facing mortgage resets. The average reset will bump up interest payments about a full percentage point, as of May 2008, compared with about 3.5 points at the same time a year earlier, Grover calculated. Nevertheless, consumer advocates advising financially strapped homeowners note that resets are not cone- time event. Many clients at Twin Cities Habitat for Humanity have seen their payments fall in their first reset in the last few months, said Cheryl Peterson, the group's program manager for mortgage foreclosure prevention. "A couple of our clients said, 'My interest rate didn't go up, so I don't have to worry about it,"' Peterson said. But she said that's not so. "For the rest of the loan, it has the ability to go up as much as five points," she said. Indeed, many adjustable-rate subprime loans change every six months. Some are altered every month, leaving homeowners vulnerable to rate increases in the months and years ahead. Simply refinancing is not an option for many subprime borrowers, either because lenders have tightened lending standards or because the market value of their homes has fallen substantially in the last year or two. That makes more foreclosures inevitable., in the view of experts. What's more, as the number of empty houses rises, the market value of homes and entire neighborhoods could fall "Often people describe a wave of foreclosures," Grover said. "Arguably, in parts of the Twin Cities, the wave already has gone through." The number of scheduled subprime resets within the borders of Minneapolis and St. Paul, for instance, is overshadowed by subprime resets in the suburbs. But that may be because many urban subprime loans hit the rocks before monthly payments rose. Food or mortgage Sharon Young, a homeowner on the East Side of St. Paul, knows the dilemma all too well Young, 42, and her husband, Waverly, 46, were renters until they bought their first house three years ago. They bought an adjustable-rate mortgage that started with payments of $1,679 a month. In March 2007, the monthly payment was reset to $2,218. The couple, with a combined gross income of $77,000, couldn't manage the $539 monthly increase. Young handles patient health claims for a local hospital. Her husband is a maintenance worker. "Our mortgage company refused to negotiate," she said. The lender also wouldn't accept http://www.startribune.com/templates/Print This Story?sid=19428529 6/12/2008 Home mortgage 'reset' chock to hit suburbs Page 3 of 3 any payments less than the full monthly amount owed. As a result, Sharon said she quit making payments a year ago and expects to lose her home to foreclosure this summer or fall. Paying for food, utilities and other expenses demanded much of the extra $539 a month the mortgage lender demanded. "We rob Peter and Paul doesn't get paid," she said. Refinancing is out of the question. Young and her husband bought the house for $250,000. A recent appraisal put its value at $170,000. Young's assessment of home ownership: "It was a disaster." Mike Meyers • 612-673-1746 ©2008 Star Tribune. All rights reserved. http://www.startribune.com/templates/Print This Story?sid=19428529 6/12/2008 Foreclosures surge to a record high -late payments, too, signaling worse to come Page 1 of 3 ~~c"~~"Tt'[bt;~ti~~CC~fiTl _ ~I~I~TNE~POLIS-ST.P~.UI.,,II~~StIT~ Foreclosures surge to a record high -late payments, too, signaling worse to come By JEANNINE AVERSA ,Associated .Press June 5, 2008 WASHINGTON.- The foreclosure hammer is hitting ever harder. People lost their homes. at the highest rate on record in the first three months of theyear, and late payments soared to a new high, too - an alarming sign that the housing crisis and its damage to the national economy may only get worse. Dumping more empty homes on an already glutted market also is likely to put a further drag on home prices - extending a vicious cycle. Slumping home values are being blamed in large part for the rising tide of foreclosures. Troubled borrowers are left owing more to the bank than their homes are worth. They can't sell without taking a huge financial hit, so they just walk away. In fact, .Americans' equity in their homes -usually their single biggest asset -now has dropped to the lowest level on record in figures going back to the end of World War II. Homeowners' portion of equity fell to 46.2 percent, which means the amount of debt tied up in their homes exceeds the equity they have built up. Watching their home values sink, consumers have pulled back on spending, a factor in the economy's slovvdown. Buoyed by rebate checks, shoppers did get back in the buying groove in May, but analysts predict that consumers -pounded by galloping gasoline prices -will still be cautious. "The economy is treading water, and the housing. market is one of the undercurrents trying to pull it down," said Stuart Hoffman, chief economist at PNC Financial Services Group. Nearly 1 percent, or roughly 447,723 loans, fell into foreclosure during the January-to- March period, the Mortgage Bankers Association said Thursday in its quarterly snapshot of the mortgage market. That surpassed the previous high of 0.83 percent over the last three months in 2007. The ,report also found that more homeowners slipped behind on their monthly payments. The delinquency rate jumped to 6.35 percent - or 2.87 million loans -compared with 5.82 percent for the previous three months. Payments are considered delinquent if they are 30 or more days past due. Both the rate of new foreclosures and late payments were the highest on record going back to 1979. With prices expected to keep dropping, foreclosures and late payments "are going to continue to go up," Jay Brinkmann, the association's vice president of research and economics, told The Associated Press. http://www.startribune.com/templates/Print This Story?sid=19562454 6/12/2008 Foreclosures surge to a record high-late payments, too, signaling worse to come Page 2 of 3 Homeowners with tarnished credit who have subprime adjustable-rate loans took the hardest hits. Foreclosures and late payments for these borrowers also swelled to all-time highs in the first quarter. The percentage of subprime adjustable-rate mortgages that started the foreclosure process climbed to 6.35 percent. The rate was 5.29 percent in fourth quarter,-the previous high. Late payments rose to 22.07 percent from 20.02 percent, the previous high. The association's survey covers just over 45 million home loans. More problems also cropped up with loans to more creditworthy borrowers. The percentage of such loans falling into foreclosure was 0.54 percent, compared with 0.41 percent at the end of last year. Late payments rose to 3.71 percent from 3.24 percent.- The numbers were higher for those prime borrowers with adjustable rate mortgages. Initially low rates reset to much higher ones, making it difficult, if not impossible, for homeowners to keep up with monthly: mortgage payments. The proportion of those. loans falling into foreclosure jumped to 1.55 percent from 1.06 percent.. The delinquency rate rose to 6.78 percent, compared with 5.51 percent. "The number one problem is the drop in home prices," Brinkmann said. Declining prices, especially in newer built areas, "are hurting people's ability to recover when-they run into trouble - a divorce or loss of job," he said. "In other days, you could sell the home. But because home prices have fallen so much, in many of those cases, the homes are going into foreclosure." California, Florida, Nevada and Arizona accounted for 89 percent of the total increase in new home foreclosures, he said. Those are places where prices have fallen sharply and there was a lot of home building, creating too much supply,. Brinkmann said. "These extra inventories from foreclosures complicate what is already a heavily built situation," said David Seiders, chief economist at the National Association of Home Builders. After afive-year boom, the housing market fell into a deep slump two years ago. That dragged down sales, and prices with it: As the value of homes plummeted, many newer homeowners found themselves owing more on their mortgages than their homes were worth. Nearly 8.5 million homeowners had negative or no equity in their homes at the end of March, representing more than 16 percent of all homeowners with mortgages, according to Mark Zandi, chief economist at Moody's Economy.com. He estimates that will increase to 12.2 million, or almost one out of every four homeowners, by the end of June. Nearly three in 10 people say they are worried their home's value will decline over the next two years, according to a recent Associated Press-AOL Money & Finance Poll. Sixty percent said they definitely won'f buy a home in the next. two years. That's up from 53 http://www.startribune.com/templates/Print This Story?sid=19562454 6/12/2008 Foreclosures surge to a record high -late payments, too, signaling worse to come Page 3 of 3 percent two years ago. As foreclosures and late payments climbed, financial companies took multibillion-dollar losses when their investments in mortgage-backed securities soured. A credit crisis spread, crimping other types of financing. The fallout plunged Wall Street in turmoil, disrupting the normal functioning of markets. All those troubles have pushed the economy to the brink of a recession. Employers, cutting costs, have eliminated more than aquarter-million jobs in the first. four months of this year. To bolster the economy, the Federal Reserve made aggressive interest rate cuts. But with inflation on the rise, Fed Chairman Ben Bernanke this week sent his strongest signal yet that the central bank's rate-cutting campaign. is coming to an end. The Bush administration has. urged lenders to freeze rates for some homeowners and encouraged lenders to rework mortgage terms so troubled borrowers can stay in their homes. A congressional plan that includes a foreclosure prevention program has stalled as lawmakers figure out how to pay for it. Associated Press Business Writer J.W. Elphinstone contributed to this report. On the Net: Mortgage Bankers Association: http://www.mbaa.org/ ©2008 Star Tribune. All rights reserved. httn://www.startribune.com/temnlates/Print This Storv?sid=19562454 6/12/2008 'A new sense of desperation in the people we're seeing' Page 1 of 2 ~~~~"Tl~t~€.It~~'~~~rl~ 1"'II~'~1'vT~li~~~~ - T. ~'~.t Zk`~iiv r~l ~'tix~T~ 'A new sense of desperation in the people we're seeing' By KEVIN GILES and DAVID PETERSON, Star Tribune staff writers June 7, 2008 More residents are broke. and hungry in Washington and Dakota counties, with signs of their distress appearing in sheriff sales, overdue bills and a scramble to find money for food and rent. "There's kind of a new sense of desperation in the people we're seeing," said Dan Papin, Washington County's director of community services.. "They're seeking help from the government as well as in the community." Combined with falling property values, the trends suggest budget preparations will be uncommonly turbulent this fall in east-metro suburbs, with homeowners expecting relief from taxes even as demands for public assistance are rising. "We're very concerned about some of these trends," Nancy Schouweiler, Dakota County board's chair, told staff members who pulled together about 100 pages of updates on the county's condition as a prelude to thinking about tax rates and budget demands. Food shelf visits and mortgage foreclosures both sharply on the. rise are "leading indicators" of a bigger picture, said Dakota County researcher Jane Vanderpoel. In Washington County more affluent than Dakota, with a 2006 median household income of $76,000 compared with Dakota's $71,000 the strain is evident everywhere as people seeking assistance cope with the further burden of gas prices nearing $4 a gallon, Papin said. "Mostly they're just forced to make unpleasant choices," he said. Dakota County, with more older, inner-ring suburbs than Washington and Scott counties, seems to have a markedly higher rate of poverty. The rate of free and reduced lunches for Dakota County schoolchildren is 18.4 percent, compared with 14 percent in Washington and 15.6 percent in Scott, according to statistics assembled by Washington and Scott counties in response to the Dakota draft report. Washington County's caseload in food support, previously known as food stamps, grew 10 percent in the past year, Papin said, rising to 1,892 clients in March 2008. Meanwhile, demands on food shelves continue to soar. The latest figures from Hunger Solutions Minnesota show a 24 percent increase in the number of visits to Washington County food shelves the first quarter of this year compared with the same period in 2007. In Dakota County, that increase was 12 percent. Eight food shelves in the two counties gave away 580,000 pounds of food during the first quarter of this year. httn://www.startribune.com/templates/Print This Storv?sid=19632864 6/12/2008 'A new sense of desperation in the people we're seeing' Page 2 of 2 More families in trouble In St. Paul Park last week, Friends in Need Food Shelf served a record number of families in a single day: 93, said Director Michelle Rageth. Visits have jumped at Friends in Need, which also serves. Cottage Grove, Newport and Grey Cloud Island in south Washington County. Almost all of the people coming to Friends in Need have jobs of -some type but can't pay the bills or recently lost jobs, Rageth said. "We're seeing so many homeless people who are without electricity and phones," she said. "They just have multiple issues to deal with." Sheriff sales of foreclosed properties in Washington County are on a pace to double over last year, said Kevin Corbid, the county's director of taxpayer services. Dakota doesn't expect quite that big a jump, but is forecasting a rise to about 2,400, which is about 10 times as many as just. five years earlier. The hottest of hot spots for foreclosures in Dakota fast year were in-the older; inner ring suburbs of West St. Paul and South St. Paul, and in the southern half of Apple Valley, according to a map included with the report. Rates of foreclosures per square mile varied immensely, analysts said, from less than 5 per square mile in parts of Lakeville, west Eagan and Inver Grove Heights, to more than 30 per square mile in the more troubled areas. At Washington County's workforce center in Woodbury, the number of people using the job resource room has more than doubled since 2006. In the latest trend, many of them were laid off from smaller companies now feeling the pinch of a declining economy, said Division Manager Robert Crawford. They tend to be higher-skilled workers, he said, which means that lower-skilled workers have a diminished chance to find work in a tight job market. "It doesn't look like it's going to get better anytime soon," he said. "People are hurting." kgiles ~startribune.com • 651-298-1554 d~eterson(c~startribune.com • 952-882-9023 ©2008 Star Tribune. All rights reserved. httn://wwwatartribune.com/templates/Print This Storv?sid=19632864 6/12/2008 FBI wants more action on mortgage fraud - TwinCities.com Page l of 1 ~ ~ ¦ ~ Ff Wc~~"i~S ~Cti®Cl ©t1 The subprime loan crisis sparked a collapse in the credit markets and triggered almost $400 billion in t losses and write-downs on Wall Street. It also has t11Qt't~t'~gPv 1 ~au~ driven hundreds of thousands of families from their homes as foreclosures hit record numbers. IVlinnesata amang field offices tall to shift focus The 26 field offices were told to temporarily to subprime crimes suspend opening new cases dealing with price fixing, mass marketing, wire fraud, mail fraud and By Robert Schmidt environmental crimes, Carter said. Current cases Blaamiserg News aren't being dropped, he said. The FBI has 56 field offices and about 12,000 agents. Article Launched: Oo113~'2008 12:01:Ov AM CDT The FBI, confronting a surge in mortgage fraud, has The affected FBI offices also are in Florida, Georgia, ordered more than two dozen of its field offices to California, Nevada, Arizona, Texas, New York, Ohio, stop probing some financial crimes so agents can Michigan, Illinois and Indiana, he said. focus on the subprime crisis. FBI Director Robert Mueller told Congress in April Kenneth Kaiser, chief of the bureau's criminal that he had seen a "tremendous surge" in cases investigative division, issued the'directive late last related to subprime loans, which are made to week on a video conference call with the heads of 26 borrowers with poor credit... offices in areas where mortgage crime is rampant, including Minnesota, said Bill Carter, an FBI One measure of the increase: Last fiscal year, which spokesman in Washington. ended Sept. 30, the FBI received almost 47,000 so- called Suspicious Activity Reports detailing potential Carter said the shift was made after an analysis of mortgage crimes, a 31 percent jump over the how agents are spending their time. The FBI previous year. In the first half of 2008, there already traditionally has moved investigators to address have been 38,000 reports. urgent needs, he said. About 150 agents were working on more than 1,300 mortgage cases before the change. "If you're seeing a significant crime problem,you have to move resources," Carter said. "We've got a big problem with mortgage fraud.." The cases, known as loan-origination fraud, involve schemes to flip properties for a quick profit, cheat banks or rip off homeowners facing foreclosure. Targets of investigations can include real estate agents,. homebuilders, lawyers and appraisers. Advertisement I."~..1 ~'rir~t ~'ovret-~d BS% f.... , sM=: http://www.twincities.com/business/ci 9569512?nclick check=l 6/23/2008 Cities sue, invest to stop foreclosures -Mortgage Mess - MSNBC.com Page 1 of 3 ~~44rv MSNBC.com Cities sue, invest to st®p foreclosures Creative tactics to keep owners in homes; ~We can't wait' for the Feds The Associated Press updated 7:41 p.m. CT, Mon., June. 16, 2008 PHILADELPHIA -Just two months ago, Aaron Brokenbough had no clout and little say when lenders moved to foreclose on his home. His Philadelphia row house was scheduled for a sheriff's sale, the end of the road for most homeowners who are behind in mortgage payments. That was before a Philadelphia court decided to step in with this unusual order: Sheriff's sales cannot go forward without alast-ditch effort by the lender and homeowner to work out a deal. The court also gave Brokenbough some muscle, matching him with a volunteer attorney and housing counselor to take his side against his lender and their lawyers. Brokenbough feels a ray of hope. "I'm overwhelmed," said the 36-year-old former mail processor, who fell behind on payments after he lost his job and his wife incurred medical bills from a surgery. "I'm hoping to save my home." Philadelphia is just the latest in a growing number of cities -including Los Angeles, Baltimore, and Trenton, N.J. -that are taking matters into their own hands to help stop the nation's housing crisis within their borders. With more than a .half-million foreclosed homes on the market, and over 3 million borrowers behind on their mortgages, more cities are aggressively reaching out to residents and filing lawsuits against lenders. While politicians debate in Washington, many cities are on the front lines of the foreclosure crisis: fielding calls from desperate homeowners, and fighting vagrancy and crime around vacated properties. "We can't wait on the federal government," said Douglas Palmer, mayor of Trenton, N.J., and the president of the U.S. Conference of Mayors. "We're taking action." Cities are under the gun to act: A report released by the U.S. Conference of Mayors last November projected economic tosses of $166 billion this year for 361 metropolitan areas. These stem from lost tax revenue and jobs as well as slower consumer spending that come with home equity declines, and don't even include the financial toll of increased crime, fires and building code violations. To try to recoup part of that money, some cities are suing lenders. But it's not easy to go after federally regulated companies. In January, Cleveland took the public nuisance route and sued 21 major investment banks and lenders, charging that their subprime lending practices devastated neighborhoods and hurt property values and city tax collections. Baltimore sued Wells Fargo & Co., alleging a pattern of predatory lending practices in its poorest neighborhoods. Minneapolis and Buffalo, N.Y. are engaged in similar litigation. "Why would these mortgage lenders continue to enter deals with these people who they knew could not afford their loans?" said Robert Triozzi, Cleveland's director of law. "To suggest (these financial institutions) didn't know the consequences just defies logic." He blamed Wall Street greed and said the players relied on a scheme that could only work if home prices continued to rise. "We're. going to hold them accountable for actions they have done here," said Triozzi, who is seeking hundreds of millions of dollars in damages. Wells Fargo said the lawsuit has no merit. "The city seeks to use a single financial services company as a scapegoat for broad social problems that have plagued Baltimore for decades, including some caused by the city's own actions," Wells Fargo said in a statement. "The mortgage industry, however, says it is taking action to try to stop the rising tide of foreclosures." httr,://www.msnbc.msn.com/id/25195953/brint/1/disnlavmode/1098/ 6/23/2008 Cities sue, invest to stop foreclosures -Mortgage Mess - MSNBC.com Page 2 of 3 Last fall, many lenders and servicers banded together to form a group called the Hope Now Alliance. The lenders try to work out repayment plans, and can modify the terms of the loan by lowering the interest rates or forgive part of the debt. Some. cities are also trying to help homeowners catch up on their late payments. This week in Jacksonville, Fla., -where the foreclosure rate is three times the national average -officials are launching a campaign to promote the city's interest-free loans. Distressed homeowners can get up to $5,000, which will be forgiven if they stay in their homes for at least five years, said Dayatra Coles, manager of housing services. Louisville, Ky., also is giving out up to $5,000 in loans. The loans will be forgiven if the homeowner stays put. for a decade. The city has teamed up with the United Way to offer access to housing help in addition to the charity's social services. In order to battle a foreclosure rate-that is 2.5 times the national average, according to First American Core Logic, Trenton's mayor has asked pastors to preach at least one sermon in June on foreclosures and to distribute information about where to get help. Church volunteers became walking billboards, wearing "Save Trenton Homes!" T-shirts with hotline numbers on the back. Last Sunday, Rev. Donald Sullivan Medley of the Cadwalader-Asbury United Methodist Church in Trenton preached that there's no shame in asking for help. "Matthew chapter 7 talks about the wise and the foolish building their homes on the sand or on a rock," he told his congregation. The house on the rock withstood winds, rain and floods, not the house on the sand. "We have to prepare," said Medley, whose trustees distributed foreclosure help information during service. Several people later came forward to get more information. Los Angeles, meanwhile, is adding foreclosure counselors in neighborhood centers for jobs and city services. The city also is tapping neighborhood .councils to fight blight. L.A. is watching other cities' plans to buy up foreclosed properties and possibly use them for affordable housing, but in an area where homes can easily cost over $500,000, the cost of such a plan is a huge obstacle, said Gil Duran, spokesman for Mayor Antonio Villaraigosa. Cities don't have the financial or regulatory strength to stem the crisis, and need firmer backing from the federal government, said John Taylor, president of the National Community Reinvestment Coalition in Washington. The federal government has taken several steps to prop up the housing market, but critics say Bush administration-backed efforts to help borrowers avoid foreclosure are falling short. The government has expanded the authority of the Federal Housing Administration to allow more borrowers to refinance their loans, and to help home buyers purchase a foreclosed property. In May, House lawmakers passed a bill to send $15 billion to states to buy and fix up foreclosed property. Proponents say the measure, opposed by President Bush, will prevent blight in neighborhoods plagued by abandoned homes. Lawmakers are also considering housing tax credit of up to $7,500 for first-time home- buyers. Still, calls are growing for more government intervention, in the form of a plan for the government to guarantee as much as $300 billion in new loans to help borrowers refinance into cheaper, fixed-rate mortgages. But while the Congressional infighting drags on, cities have to deal with the housing "sinkhole" day in and day out, Taylor said. "They recognize the federal government really isn't moving that will make a difference fast enough." That's why officials in cities like Philadelphia aren't sitting still .Last week, hundreds of people mobbed a court room in city hall after they were told about the court intervention program. Common Pleas Court Judge Annette Rizzo said "It was bedlam." http://www.msnbc.msn.com/id/25195953/print/1/displavmode/1098/ 6/23/2008 FBI says Twin Cities area is hotbed for mortgage fraud Page 1 of 2 c~CTIC[~tIC~eRt~rn` ~I~ - PACTI;, 1<Nlt.~l.S~C~~T't FBI says Twin Cities area is hotbed for mortgage fraud By DAN BROWNING, Star Tribune June 20, 2008 The FBI has identified the Twin Cities as one of the 10 worst areas of the United States for mortgage fraud and said it has literally dozens of criminal investigations underway here as part of a national. crackdown on the problem. Deputy U.S. Attorney General Mark Filip and FBI Director Robert Mueller called a news conference Thursday afternoon in Washington to announce a special enforcement effort targeting mortgage fraud and mortgage-related securities fraud. The multi-agency initiative is called Operation Malicious Mortgage. From March 1 through June 18, the government charged 406 defendants in 144 mortgage fraud cases around the country. The FBI estimates the total losses from these cases at about $1 billion. Six of every 10 cases had losses of at least $1 million. In Minnesota, it's even worse, said Rick Thornton, assistant special-agent-in-charge of the criminal division in Minneapolis. "We have three cases where we are expecting losses approaching $50 million in each case," Thornton said.."That's a real loss to one or more financial institutions." Two of the biggest cases include the prosecutions of Parish Marketing and Development of Eagan and TJ Waconia of Roseville, said Paul McCabe, FBI spokesman in :Minneapolis. The Parish case involved more than 200 homes in some southern Twin Cities suburbs; the TJ Waconia case involved 165 homes in Minneapolis. The losses in those cases are still being tallied. McCabe declined to discuss the third case, an indication that it may still be pending. The FBI's Minneapolis office currently has "40 plus" investigations underway, Thornton said. But even that understates the scope of the problem. He stressed the fact that his agency has been participating in an informal mortgage fraud task force for some time with the U.S. Postal Inspection Service, Internal Revenue Service-Criminal Investigative Division, the U.S. Attorney's office, the Hennepin County Attorney's office and other agencies. They work together, but each also has its own. cases. Almost all cases top $1 million Most of the cases they investigate have losses in the $5 million to $10 million range, Thornton said. "Virtually everything that we're working has a loss in excess of a million dollars," he added. The FBI recently sent notices to 24 of its offices nationwide that have been identified as having particularly high mortgage fraud problems the Minneapolis office, which covers httn://www.startribune.com/templates/Print This Storv?sid=20585019 6/23/2008 FBI says Twin Cities .area is hotbed for mortgage fraud Page Z of 2 Minnesota and the Dakotas, was listed among the top 10, Thornton said. He said the problem area is the Twin Cities. The agency directed each office to stop opening lower-priority white-collar crime cases for the time being and to concentrate on mortgage fraud. Thornton said his agents would keep working existing cases. And the office does have some flexibility to pursue new cases that have significant community impact. But more routine white-collar crimes may get pushed aside for a while, he said. 60 arrests in one day On Wednesday, federal agents arrested 60 people in 15 federal districts. None was in Minnesota, but plenty have already been arrested here. In 2007. and 2008, the U.S. Attorney's office charged 23 defendants who have either pleaded guilty or have been sentenced for mortgage fraud and related crimes, a spokesman said Thursday. Some of the defendants include Sabry Wazwaz, Christopher Horton, Adam Leaf, Jill Lehn, Isadore Stewart, Mario Lewis, Ron Joseph, Ramiz Saadeh, Kristopher Robbins, Molly Heise, Joseph Van Huebl and John Rubischko. "Obviously, we've been engaged in mortgage fraud investigations and this building problem for some time," Thornton said. Dan Browning • 612-673-4493 ©2008 Star Tribune. All rights reserved. http://www.startribune.com/templates/Print This_Story?sid=20585019 b/23/2008 'lymouth is best place to live, Moriey magazine says http://www.startribune.com/templates/Print This_Story?sid=2533549 B1~1"fb{.~IBO*~~n`~ Ik'~~~1`~E. ~~'~~`a-:~T~~ti~L~~~.4ti%.~~~111'-! Plymouth is best place to live, Money magazine says By TIM HARLOW, Star Tribune July 14, 2008 The best small city to live in America is Plymouth. At least that's the consensus of a team of writers and editors at Money magazine who today released their list of the top 100 cities with populations of 50,000 to 300,000. The west metro suburb with a population of 70,100 came in at the head of the class and was lauded for its plentiful number of jobs, quality schools, affordable housing, arts and culture, recreation space, low crime rates and its proximity to the downtowns of Minneapolis and St. Paul, the Mall of America in Bloomington and area's professional sports teams and cultural attractions. Of course the magazine chided the city for its long, cold winter. Plymouth was not the only Minnesota city to make Money's top-100 list. Eagan came in at No. 17, Apple Valley at No. 24, Lakeville at No. 26, Eden Prairie at No. 40, Maple Grove at No. 41, Burnsville at No. 43, Rochester at No. 70 and Blaine at No. 93. © 2008 Star Tribune. All rights reserved. ~f 1 7/14/2(1(IR 1 1 •1 R AM Best places to live 2008 -Lakeville, MN -from MONEY Magazine Page 1 of 4 26. Lakeville, MN WINNER ~ - Top 100 rank: 26 ~ Population: 53,000 Compare Lakeville to Top 10 Best Places Lakeville is a southern suburb of the Twin ~ Cities that has more than 100 years of history. The town treasures an historic downtown that gives it a unique feel compared to other burbs. ~ ~ ~ L ~ ~`v'~~f x ~ i ~ ~ ~ ~ ~v~ ~ y". True to its name, Lakeville boasts three ~ F ~ , - sizeable lakes, two of which provide ~KF opportunities for boating and fishing. ~ wS - r y ,F ' ~ . , It also boasts some of the highest ranked Downtown Lakeville schools in the country (no. 3 on our list) and is home to an industrial park with more than 150 businesses providing about 4,000 jobs. '4'~r'~ Apple- Valle Financial City stars Best places avg. y - ~ - 15DB: S Median famil .Income y $96,156 $93,075 - (Per year) - - ~x ,ham Family purchasing power 1 - r a (annual, cost-of-living adjusted) $85,701 $84,780 r ~ Sales tax 6.50% 6.60% ? I ~h State income tax ~ I Lakeville rate (highest bracket) 7.85%I 5.17% m Fam State income tax rate ~ ~ (lowest bracket) 5.35%I 2.43% Paw~sc~~~•r U~gl~ Tele Atlas - TerrnS'~ Auto insurance premiums Click map to enlarge (Average for the state) $1,590 $1,791 Show: Homes for sale ~ Million-dollar homes ~ Top companies ~ Colleges ~ Hospitals ~ Job growth % ° ° Museums ~ Wineries ~ Gardens ~ Ski resorts (2000-2007) 16.98 /0 18.72 /o See Lakeville in... HOUSIng City stars Best places avg. Median home price $256,000 $291,949 ...What Readers Say Average property taxes $2,969 $3,886 They speak out on Lakeville and other (2007) places _.......e___~..__ _ _ _ _ . See. Lakeville homes for sale ! What about Greenville South Carolina it's up and coming. It'... See million-dollar homes http://money. cnn. com/magazines/moneymag/bplive/2008/snapshots/PL273 5180.html 7/ 18/2008 Best places to live 2008 -Lakeville, MN -from MONEY Magazine Page 2 of 4 _ wM.... _,__.._w.._..._ EducatlOrl City slats Best places avg. THANK YOU for not felling anyone Colleges, universities and ~ about Charlottesville, Virginia. We professional schools (within 30 miles) 30 49 ~ (a I Junior colleges and 25 25 a.___.__. _____w__....i technical institutes (within 30 miles) Ok now that Fountain Valley has Test scores reading ° ° appeared, 1 now know this list is a above/below state average) 28.9 /0 17.3 /o I JOKE... Test scores math 27.1 % 16.8% Have your say above/below average) students attending public/private N~~y•• schools (located within town limits) 96.3/3.7 89.0/11.0 PLACES COMPANIES HOMES Quality of life City slats Best places avg. See city slats Compare Air quality index" 80.8% 75.9% of days A01 ranked as good) Apple Valley, MN ? Personal crime incidents (per 1,000) 13 2 Burnsville, MN ? Property crime incidents (per 1,000) 223 25 Rosemount, MN ? Median commute time 22 7 23 0 Savage, MN ? (in minutes) Eagan, MN ? population with commute 10.2% 15.7% 45 mins. or longer Prior Lake, MN ? population walk or bike to work 1.3% 3.0% Blooming#on, MN Leisure and culture city slats Best places avg. Movie theaters 31 51 (within 15 miles) Restaurants 1,562 4,094 (within 15 miles) Bars 132 408 (within 15 miles) ,,A Feedback on the Best Places to Live list? Public golf courses 261 316 E-mail the editors (within 30 miles) Libraries 47 89 (within 15 miles) ~ Museums (accredited by AAM; 4 13 Information powered by OnBoard LLC within 30 miles) Some data may be provided courtesy of its partners. Ski resorts (within 100 miles) 12 33 Arts funding (Dollars per person of state. 2 1 1.5 'f ~ ~I ~ ~ funds spent oh arts) ~ ~ ~ $ t t ~ ~ ~ ~ http://money.cnn.com/magazines/moneymag/bplive/2008/snapshots/PL2735180.html 7/ 18/2008 Best places to live 2008 -Lakeville, MN -from MONEY Magazine Page 3 of 4 Weather city stars Best places avg. Additional data and consulting services Annual rainfall 31.68 36.17 provided by Bert Sperling's bestplaces.net. (inches) clear days in the area 26 30 Hi htem ~ ° ° ° ~1 9 P rn July F 82.8 87.8 real estate Search Homes for sale provided by Trulia Real Low temp in Jan ° F 3.4° 22 9° Estate Search. Health* City stats Best places avg. Has health plan 92.4% 88.3% of residents) Body mass index (avg. for residents) 27 27 Diabetes rates 9.7% 9.6% of residents diagnosed) Hypertension rates 22.8% 27.2% of residents diagnosed) Meet the nelghborS City stats Best places avg. Median age 31.9 35.9 Completed at least some college ° ° of residents) 78.7 /0 73.7 /o Married 69.4% 57.5% Divorced 7.7% 8.3% Racial diversity index (100 is national average; higher numbers 31.8 104.2 indicate greater diversity) Amount spent on vacations (domestic and foreign, household avg. per $8,116 $8,007 year) From the August 2008 issue Notes: * County data State data (3) Crime incidences are estimates based on FBI 2006 Universal Crime and incidence reports, OnBoard analysis. (I) Income tax notes: 17 states have statutory provision for automatic adjustment of tax brackets, personal exemption or standard deductions to the rate of inflation. Massachusetts, Michigan, Nebraska and Ohio indexes the personal exemption amounts only. The tax brackets reported are for single individual. For married couples filing jointly, the same rates apply for income under $31,150 http://money.cnn.com/magazines/moneyrnag/bplive/2008/snapshots/PL2735180.htm1 7/ 18/2008 Best places to live 2008 -Lakeville, MN -from MONEY Magazine Page 4 of 4 to over $123,751. A 6.4% AMT rate is also applicable. These states allow personal exemption or standard deductions as provided in the IRC. Utah allows a personal exemption equal to three-fourths the federal exemptions. http://money.cnn.com/magazines/moneymag/bplive/2008/snapshots/PL273 5180.htm1 7/ 18/2008 http://www.twincities.com/fdcp?1214918572565 1 ¦ ¦ ¦ a War Qver affordable anywhere near them. hQ us' n 'If you want spousal abuse and.. meth labs, it's fine,' said Clyde McCaskey, a former Forest Lake Planning Commission member. He fought the construction of the Forest Ridge complex where Carlson lives; By Bob Shaw saying it would bring crime to the area and hurt bshaw@pioneerpress.com property values. Article Last Updated: 06/29/2008 12:26:36 AM CDT TO that, Carlson snapped: 'Oh, boo hoo! Go fly a kite. We are hard-working people. We are at the _ r beginning of the long journey that they all took.' i, , ~ i IYs a journey that's get#ing more difficult. In the war h' •w x against affordable housing, opponents are winning. ?a . _ As far as experts can tell, the percentage of _ a`~ y~ Minnesotans spending more than ,7' _ 30 percent of their incomes on housing has never : ~ been higher -about 35 percent. ~ Much of the blame goes to the suburbs. Suburban cities have three-quarters of the area's population - but only half of its affordable housing. The "I just feel so blessed to. live here," renter Stephanie wiuiarn: Metropolitan Council is calling for 86 percent of the said of the affordable town house where she, her husband z area's new affordable housing through 2020 to be 8-month-old son, Chetan, live in Woodbury, sienna Ridge builf in the suburbs -about one-third of all new residents pay about $750 a month for apartments that woi Construction. typically let for $1,100. (Brandi Jade Thomas, Pioneer Press As affordability pushes its way into the suburbs, it will be like a kettle in which issues of fairness, Andrea Carlson gets the feeling she isn't wanted. class, property values and crime will bubble and sometimes boil over. She's 23, with two adorable children and a great sense of humor. Her policeofficer husband works 52 Opponents say "affordable housing" has acquired hours a week and makes $47,000 a year. Both are the stink of the "welfare" label - a sign of a taking college classes and saving money to buy a neighborhood in decline. home next year. "1 .don't want Apple Valley to become the Phillips But Carlson lives in subsidized affordable housing neighborhood of Dakota County," Apple Valley City -which her Forest Lake neighbors don't want Council Member Tom Goodman said in 2006 as he Advertisement ~ ~ ~ 9 e It ; s., ;^Y ~ ~ _ ~ _ „ems rY - ° ~ _ . 13 wk i ntr~d u~tc~ offer of ~ - 3~?°fo discc~unf fc~r new subscribers. ' - ~ . - ~ j . cG, n R~.1~ 1 of6 7/1/20088:23 AM http://www.tw incities.comlfdcp? 1214918572565 t ¦ ¦ ¦ ~ ~ argued against an affordable-housing project. but are difficult to build in the suburbs because of PhiNips is ahigh-crime, racially diverse part of :political resistance, local regulations and the high Minneapolis. cost of land. Proponents say having local employees living Subsidized housing. A federal program, for where they work reduces sprawl and congestion. example, gives tax credit to developers of new units, The objections, they say, smack of snobbery. who then offer a discount of about 30 percent to renters. This is the program most often used in the Suburbs should open their doors to a greater suburbs. diversity of incomes, races and ages, said John Slade, a congregational organizer with the The Twin Cities metro area is lagging in goals set Metropolitan Intertaith Council on Affordable by the Met Council. In 1996, the council aimed for Housing. adding 86,000 affordable owned homes and 16,382 affordable rental units by 2010. So far, the metro "Are we building God's kingdom on earth?" Slade area is on track to add only about 64 percent of the said. "Does that kingdom accept all of God's needed housing. children, or not?" Overall, Minnesota's reputation as a place where Not A Renter's Market /The scarcity of affordable housing is affordable is slipping - it had the housing has surprised experts. After all, home nation's second-highest rate of affordable housing prices have been sinking for 18 months, to a median in 2000 but dipped to 14th in 2006. price of about $205,000. That raises alarms for Tom Fulton, president of the That makes if a buyer's market. But it's not a renter's nonprofit Family Housing Fund, which seeks to market. produce and preserve affordable housing. He said families forced to spend too much on housing - Thousands of homeowners evicted by foreclosures along with $4-per-gallon gas and high food prices have been thrust into rental housing. Funding for - teeter on the brink of poverty. affordable housing has been spiraling downward for years, and rents are getting pushed sky-high. "It starts to throw families into perpetual financial crisis," he said. "Kids suffer." Housing is considered affordable if it consumes 30 percent or less of a household's income. Given the Unless the suburbs provide more affordable 2006 median incomes of the Twin Cities area, the housing, people will be shunted into economic Met Council says that an affordable home would cost ghettos, said Chip Halbach, director of the about $201,000, and affordable rent is $883 Minnesota Housing Partnership. monthly. When communities separate the rich and not-so- There are two kinds of affordable housing: rich, they also separate people by age, race and social class, he said. Unsubsidized apartments or houses. These "market rate" units provide most of the affordable housing Halbach said that when suburbs create building Advertisement ¦ ~ ¦ :`y 13 wk introductory offer of , _ r,, 33°le discount for new subscribers. ' - _ Z of 6 7/1/2008 8:23 AM http://www.twincities.com/fdcp? 1214918572565 ¦ ~ ¦ codes only for large, expensive homes, they zone subsidized housing wrecks property values. Worse, out their own police officers and teachers. They they say, it isn't fair. zone out young people starting their families and careers. They zone out the disabled and senior "Judy and I busted our hump for a lot of years. We citizens. put everything we had into this house," said Bogut, standing in the stylish $575,000 home he built in "Do we want a mixture of people?" Halbach said. "Or 2006. do we want, in essence, a gated community that is homogeneous?" But last year, the first building in a 41-unit affordable housing complex called Sienna Ridge was 'Bad Actors' /Traditionally, affordability has not builfjust across the cul-de-sac from his house. found a home in the suburbs. Why, he asked, should someone get a subsidy to Suburbs live on the image of wealth, offering a live in his neighborhood? refuge from perceived urban problems of crime, inferior schools and congestion. Subsidized "Should we give subsidies for people to live. in housing -particularly to conservative, Republican- North Oaks?" Bogut said. "People all over the world leaning suburbanites -tarnishes that image. want to live in North Oaks. Well, that's just too bad. I live here, and no one is offering me a helping hand." When officials consider adding affordable housing, they must confront constituents like Jojo Tores. Bogut hasn't met his neighbors and doesn't want to. She lives only one block from her 7-year-old son's "It's the housing, not the people," he said. school in Forest Lake. Yet the boy takes the bus - one hour in the morning, one hour in the afternoon. Today, his house looks lonely -one of only two homes built in the 38-lot Wyncrest development. Why? Because he'd have to walk past the Forest The lots aren't selling, and the project is nearly Ridge affordable-housing complex. Tores calls it bankrupt -which the developer says is partly "not as scary as I thought," but she says she doesn't because of Sienna Ridge. want to take chances with her son's safety. _ "Affordable housing next to $500,000 homes is Planning commission member McCaskey, who used crippling," said Wyncrest co-owner Jeff Forshee. to live near the Forest Ridge site, said people who qualify for rent subsidies don't belong in that "When someone pays half a million dollars for a ,neighborhood. home, they are buying the neighborhood, too. I wish the world was not that way, but it is." "Part of the problem is that they are bad actors to begin with," McCaskey said. 'They are low-income He said Woodbury officials deliberately picked an because they have reasons for being low-income - affordable-housing site with few neighbors - to such as the inability to be employed." minimize political fallout. In Woodbury, Greg and Judy Bogut argue that "If our project were booming, they would not have Advertisement G~files carry t , . • . ~ =r- ~ ~ - t r - ~ 13 wk intrecuctc?ry affer of ~ ~ ~ - - ~~°/a di~GC~un fc~r new su~s~ribers. ~ ~ ~ ~ ~ ~ ~ at+L Y.y~ ~ ~1"I ~ f ~ ~l 3 of 6 7/1/2008 8:23 AM http://www.tw incities.com/fdcp? 12149185725E ¦ ¦ ¦ pulled this stunt," Forshee said. "Then I would. have "It's not race and it's not income," said Oakdale 15 homeowners helping me in this fight." police community affairs officer Michelle Stark. "It's the management." -One Mayor's Case /Generally, McMansions and malls create more tax revenue for suburbs than Police chiefs agree. affordable housing can, said Tim-Marx, commissioner of the Minnesota Housing Finance "Affordable housing does not, in itself, attract a Agency. criminal element," said Apple Valley Police Chief Scott Johnson, who monitors crime in several "It's a pertectly rational decision" to reject affordable subsidized-housing complexes. housing, said Marx, whose agency paid $745 .million in 2007 to subsidize renters and first-time Several new developments are proving that tough- homebuyers. minded management keeps crime low.- . But when all suburbs reject affordable housing, At Sienna Ridge, renters are meticulously screened, suburban workers must commute daily from core especially for criminal records. They sign "no-crime areas, he said. Some suburbs are now accepting leases," which mean they can be evicted if arrested. affordable housing to ease congestion, as well as to boost business growth. Manager Jenel Sauber said one tenant of another complex with similar rules recently shoplifted $200 "My reason is selfish," said Forest Lake Mayor Stev in groceries from a Cub Foods store -and was Stegner, explaining his. support of Forest Ridge. He immediately. kicked out. said businesses wiH be attracted to his city if it offers housing for workers to live nearby. When management is competent, residents aren't all that different from their neighbors. "Many (occupants) have entry-level jobs. They will get hired and move up the ranks. To say you don't To prove the point, Dakota County produced a want them here is short-sighted," Stegner said. calendar featuring 12 months of affordable-housing complexes and their happy occupants. "I hope Forest Lake becomes a model," he said. "I want to get the visuals out there, so there is not If Arrested, You're Out /Another argument against so much to fear," said Mark Ulfers, director of the affordable housing is that it generates crime. Dakota County Development Agency, which manages Opponents cite such urban nightmares as Cabrini affordable housing for the county. Green in Chicago, but they could just as well point to Gentry Place Townhomes in Oakdale. John Duffy, who built Forest Lake's Forest Ridge and Woodbury's Sienna Ridge, said his renters blend There,. police receive an average of two calls per into the community. apartment per year -eight times more than the calls per unit in Cedric's Landing, a nearby complex About half his renters are single parents. Roughly where rents are not subsidized . 75 percent work in the community, and more than 99 percent have full-time jobs. His renters have an Advertisement ¦ ~ ~ ~~v ~ G ~1 ~o nn ~~oo~ ~~~-z~3~ .Y' d 1 ~ ~ wk introductory offer of _ 3 33°la discount for new subscribers. .,~~T ~'ri-~ I ~ ~ =~~ci Fv 1 of 6 7/1/2008 8:23 AM http://www.twincities.com/fdcp?1214918572565 ¦ ¦ ¦ i average household income of about $35,000 per at Best Buy, they make $41,000 a year. As she year - and a family with several children can have a unpacked boxes recently, she paused to pick up her .household income of close to $50,000. 8-month-old boy. "Cho cha cha! You little show-off!" she said, as the baby fought .off a barrage of kisses. "What (opponents) consider'poor' is sometimes a joke. I mean, $50,000 a year?" said the Minnesota She looked around the town house. Housing Partnership's Halbach. "I just feel so blessed," she said, "to live here." "There is a paranoia, a sense of elitism, that is harmful to the community overall. The attitude of the Bob Shaw can be reached at 651-228-5433. suburbs is: 'It's a cruel world. I made it, and it's up to you to make it. if you can't, too bad.' " What Is Affordable Housing? 9-Foot Ceilings / Duffy makes sure even his Housing is deemed affordable if it costs 30 percent buildings blend in. or less of a household income. In the Twin Cities, the Metropolitan Council considers a $201,000 The new generation of affordable complexes is vain home and rent of about $883 a month affordable. almost to a fault -indistinguishable from unsubsidized town houses. Most affordable housing is market-rate housing: mostly older homes and mobile homes that happen Duffy's developments feature arched. windows, 9- to be cheap. Suburbs can encourage developers to -foot ceilings, exterior stonework, multicolored build market-rate housing, but usually the costs of facades and two-car garages. land and materials are too high. Another problem - new market-rate housing often inflates in value and "They can't look like barracks or high-rise public- becomes unaffordable. housing facilities," said Dakota County's Ulfers. But they can't look too lavish, either, he said, or they Subsidized affordable housing is more trigger public protests. controversial. It includes: Over time, with good management, the protests die .New housing subsidized by a federal tax credit to down, Duffy said. In a few years, the complexes a private developer, who then rents the units at become part of the neighborhood -and they don't about a 30 percent discount. This is how most hurt property values. affordable units are built in the suburbs. For example, Sienna Ridge in Woodbury charges The renters don't see what all the fuss is about. occupants about $750 a month for a unit that would normally rent for $1,100. "We work just as hard as anyone else. It's just that our wages aren't as high," said 28-year-old Public housing usually refers to federally Stephanie Williams, a Rasmussen College student subsidized units administered by local agencies who moved into Sienna Ridge last month. such as St. Paul's Public. Housing Agency. In St. Paul, abouttwo-thirds of public housing is occupied by Between her waitressing job and her husband's job the elderly or people with permanent disabilities, Advertisement ~111?1 f1 1 ~ 1 ~ (800 X78=7;x'37 Col'~3 r a :.ti fr 3 wie .introductory offer of discount 33 /o for new subscribers. ~ , ~ ~ r°~ . ~ ~ ~ z~ 5 of6 7/1/2008 8:23 AM http:/1www.twincities.com/fdcp? 121491 &57256:; # 11 ¦ according to agency director Jon Gutzmann. Section 8 housing, a federal program that pays up to two-thirds rent, is targeted for impoverished .households and is rare in the suburbs. Section 8 vouchers can be used anywhere; some buitdings' cater to Section 8 recipients. Habitat for Humanity homes account for a small fraction of affordable homes, offering occupants reduced interest rates in exchange for help building the house. Part 1 Of 3 Today: The shortage of affordable housing. Monday: Pushing affordability in the suburbs. Tuesday: Regulations are affordability's worst enemy. Advertisement Try ~~e~ ~~oo~ ~7~-7~~7 C com , 13-wk introductory offer of . _ 33% discount for.. new subscribers. ~ _ Pi"I`;t Fi~Wti`tc:j Wit' _ . ~ of6 7/1/2008 8:23 AM http://www.twincities.com/fdcp?1214861428067 y: ¦ ¦ ¦ ~ ~~1r1 Housing What bothers him is affordable housing that people can't afford without a government subsidy -such f f O rte ~ rJ I ~ Ifl/ IS ®U h $i$" as the town homes he can see from his front porch. - The affordable complex has slashed the value of his I I"i s U u r Woodbury house, he says. "If I had known then what I know now," Bogut said, Met Council wants suburbs to build their fair "I wouldn't have moved here." share,' but many cities aren't going along He would have had many alternatives. While By Bob Shaw Woodbury embraces. affordable housing - bshaw@pioneerpress.com government-subsidized or not -dozens of Twin Cities suburbs don't. Article Last Updated: 06/30/2008 01:50:26 PM CDT Traditionally, homeowners like Bogut have made the suburbs hostile territory for affordable housing. The lack of affordability is written into building codes, integrated into local regulations and woven into suburban culture. But the anti-affordable way of life is under attack. The Metropolitan Council has set goals for new affordable housing through 2020 -assigning 86 percent to the suburbs. Its plan calls for nearly one in three new housing units to be affordable, defined as housing for which occupants. pay no more than 30 percent of monthly income. With demand for affordable housing hitting an all- time high, the suburbs have dodged their responsibilities long enough, said Chip Halbach, director of the nonprofit Minnesota Housing Partnership. '1Ne would like to see a fair share of affordable housing in every community," he said. Greg Bogut lives in a $575,000 home. That raises questions that will rage through the suburbs for decades: What is a "fair share"? How Henan afford it. much affordability should each suburb offer? To him, that makes it affordable housing. GOALS 'HAVE NO TEETH' Advertisement Tvv~ ~~fil+~~ - , ~~oc~~ H7' 1 ~-wk introductory offer cf ~ :z.:_~~ 3°Io d iscount far new subscribers. p . _ `yy 1 ~9 Y - f. .yyR~ w .-.:F h~ ~a . rt ~ 1 of 4 6/30/2008 4:30 PM http://www.twincities.com/fdcp?121486'.428067 ¦ ~ Landfall and Hilltop, with their mobile home parks, "They really have no teeth," Apple Valley City are full of units listed as affordable. Millionaire Council Member Tom Goodwin said. enclaves North Oaks and Sunfish Lake have almost none. Suburbs "don't come right out and say they don't want it," he said. 'They say, 'Gee, if we had a place to But between those extremes, the amount of put it, we would."' affordable housing varies greatly, even in similar suburbs. Burnsville, for example, has more than Apple Valley now has more than twice as much twice the number of subsidized affordable units per subsidized affordable housing per capita as some of capita as Eagan. Stillwater has three #imes as many its neighbors, which Goodwin said is not fair. per capita as Lakeville. When he has asked supporters of affordable Looking ahead, the Met Council has set goals for housing if other cities are taking their share, "they construction of new affordable housing according just look down at their shoes. I am amazed at to a formula that considers: communities that turn it down and get away with it." Land availability and prices. Affordable-housing Afton, for example, has no subsidized affordable developers are usually small businesses and can't housing. Lake Elmo, a city of 7,700, has a single compete against big national builders. 'They have to unit. buy little parcels and plug in affordable housing where they can," Met Council analyst Guy Peterson The reason is simple, Lake Elmo Mayor Dean said. Johnston said. Voters don't want it. Availability of mass transit that allows workers to "Around here, affordable housing has a bad commute by bus or light rail, cutting down on reputation. People think it brings in crime and highway congestion. density, and no one wants either of those," he said. Availability of nearby jobs. But does Lake Elmo have a moral obligation to the metro area? The Met Council is aiming for 51,000 new affordable units between 2011 and 2020. "I don't want to get into the moral-obligation argument," Johnston said. It's better, he said, to But that assumes the suburbs will cooperate. And. if provide affordable housing that isn't government- history is an indication, they won't. financed -such as the 500 trailer homes in Lake Elmo's Cimarron mobile home park. The Met Council can force suburbs to plan for regional infrastructure such as sewers or roads. But The city's stock of unsubsidized affordable homes to promote affordable housing, it can only offer will soar,. he said, with the completion of the Old incentives -such as payments for future. projects to Village expansion of the downtown area. cities that cooperate. Sometimes, local opposition can be so strong that That leaves suburbs free to ignore the goals. affordable housing can be built only with legal Advertisement T r~ Ci ~ e~ c~ m ~soo} ~7~-~~~~ _ R ~ N9 13 ~vk i ntrod uctary offer of ` o ~ ' 3 o discount far new subscribers. } . ~ - Z of 4 6!30/2008 4:30 PM http://www.twincities.com/fdcp?1214861428067 R ¦ ~ ~ muscle. Forest Lake accepted the Forest Ridge In some cases, the affordability arguments are affordable housing complex in December only after already having an impact. losing a lawsuit. "I am upbeat about it," said Stev Stegner, mayor of THE RIGHT THING TO DO? Forest Lake, which only last year was fighting affordable housing. "We need affordable housing in Supporters of affordable housing are honing their .all communities." arguments, which are bound to be heard more in the future. Woodbury is ahead of its Met Council goals, with more than 1,800 affordable units added since 1996. When promoting the units, backers stress they This is, in part, because Woodbury is the metro aren't like the crime-ridden tenements of the 1960s. area's suburban leader in Habitat for Humanity New affordable units are well managed to keep crime homes, with 40. controlled and are built attractively to fit into neighborhoods. Planning and Economic Development director Janelle Schmitz said affordable housing is part of "Affordable housing has learned its lesson," said Ed city policy. "Without it, our own children won't be Goetz, professor of urban and regional planning for able to live here," she said. the Humphrey Institute of Public Affairs at the University of Minnesota. But there will always be skeptics. Another argument is that affordable housing is School teacher Erin Burton is planning to have "work force hottsing," where IocaCworkers can afford children but not until she and her husband can to live. Businesses benefit by having lower-wage move away from Forest Ridge in Forest Lake. workers living nearby, supporters say. "It looks new and nice," said Burton, gazing at the But the most common argument is moral -that development from her front doorway. But she said providing decent, safe and affordable housing is the crime is common there. She doesn't feel good about right thing to do. the occupants. It's an easier sell if officials see affordable housing But doesn't everyone deserve an affordable place to as helping the elderly or disabled. That's who live? occupies two-thirds of the units in St. Paul public housing, according to St. Paul Public Housing Burton paused, choosing her words carefully -she Agency director Jon Gutzmann. teaches some children who live there. "I hear this all the time: 'I am 80. I lost my husband. "I have a hard time saying they have to live I worked my entire life. Thank God you have a somewhere else," she said. "But still, I would rather program to allow me to stay in my neighborhood not have it there." and not a nursing home,"' Gutzmann said. Bob Shaw can be reached at 651-228-5433. "I say thank God and Congress," he said. Advertisement Tr~~~+e~~~-~~.~cc~~ t~c~o~ .1..~ t ,j . 13 wk introductory offer of 3~0"~a discount for new subscnb~ers. ~ _ `r ~ >r;~,t ~ ,A,:~ ,.3~ti 3 of 4 6/30/2008 4:30 PM http://www.twincities.com/fdcp? 121486?~428067 ¦ ¦ THE WAR OVER AFFORDABLE HOUSING Section 8 housing, a federal program that pays up to two-thirds of rent, is targeted for impoverished Sunday: the shortage of affordable housing households and is rare in the suburbs.. Section 8 vouchers can be used anywhere; some buildings Today: pushing affordability in the suburbs cater to Section 8 recipients. Tuesday: Regulations are affordability's worst Habitat for Humanity homes account for a small enemy. fraction of affordable homes, offering occupants reduced interest rates in exchange for help building WHAT IS AFFORDABLE HOUSING? the house. Housing is deemed affordable if it costs 30 percent or less of a household income. In the Twin Cities, the Metropolitan Council considers a $201,000 home and rent of about $883 a month affordable. Most affordable housing is market-rate housing: mostly older homes and mobile homes that happen to be cheap. Suburbs can encourage developers to build market-rate housing, but usually the casts of land and materials are too high. Another problem: New market-rate housing often inflates in value and becomes unaffordable. Subsidized affordable housing is more controversial. It includes: New housing subsidized by a federal tax credit to a private developer, who then rents the units at about a 30 percent discount. This is how most affordable units are built in the suburbs. For example, Sienna Ridge in Woodbury charges occupants about $750 a month for a unit that would normally rent for $1,100. Public housing usually refers to federally subsidized units administered by local agencies such as St. Paul's Public Housing Agency. In St. Paul, about two-thirds of public housing is occupied by the elderly or people with permanent disabilities, according to agency director Jon Gutzmann. Advertisement ¦ ~ a Tr~ftle~ com t . h ~ „ ~ 13 wk introductory offer of - . - 3~ /o discount for new subscribers. 4 of4 6/30/2008 4:30 PM http:ffwww.twincities.com/fdcp? 1214918296630 ¦ ¦ ¦ Over-ruled? Part 3 of our series on affordable expensive new three_bedroom homes in the area. housing Yet the price isn't close to the $200,000 that is deemed affordable for typical Twin Cities incomes. U'~ erCJ. Reg Uiat'ans The reast~n is regulations -affordability's worst eep suburban home enemy. prices urireas®nably high Paul and every other homebuildercould be selling new houses and town homes for at least 20 percent less - if regulations permitted it -experts say. Bob Shaw "We break out into. a sweat. We get so mad thinking Pioneer Press about them all," said Casey Cermak, president of the Builders Association of the Twin Cities. Article Last Updated: 07/01/2008 06:47:20 AM CDT Today, as more Minnesotans than ever are priced - out of the housing market, housing advocates are 4~' joining with homebuilders. Their common goal - . ..:._f;~~a~~... - : _ ~ Make it easier to build less expensive homes on ~ : ~ ~ oheaper and smaller parcels of land. ~ _ , ~ ~ r ss " ~ "We join with developers to encourage communities ~ ; ~ to have greater density," said Chip Halbach, director ' ~ ~ ~ t. of the- Minnesota Housing Partnership, a nonprofit ~ ~ - 3 •rw { group that promotes affordable housing, UP TO 30 PERCENT OF COST? Regulations often are well-intentioned. They protect TyM1~ the environment, add fire safety, boost property values and beautify neighborhoods. Peter vrYJidan, the owner of a ~a~pentry c~mNdny, works un a house in But decades of regulations have smothered Fieldstone homes, Lakeville, on Thursday, June 12, zoos. {Pioneer Press: affordability. Cost estimates vary, but one study by Jean Pieri) Harvard's Rappaport Institute for Greater Boston put Stephen Paul wants to build you an affordable the cost of regulation in Massachusetts at 30 home. percent of a home's cost. But to do that, he'd have to break the law. In the past, wt~n buyers wanted a certain type of home, developers built it, said Ed Goetz, professor His $240,000 D.R. Horton home in Lakeville is a of Urban and Regional Planning for the Humphrey masterpiece of cost cutting.- one of the least Institute of Public Affairs at the University of Advertisement ~ ~ r.~ r - . K. 13 ~nrk intrc~ductary offer t~f _ - 3°1~o discc~Unf far new subscribers. ~ , ' 1 of4 7/1/2008 8:18 AM http://www.twincities.com/fdcp? 1214918'9663 ¦ ¦ ¦ ~ ~ Minnesota. In West Lakeland Township, for example, the average home sells for about $380,000, thanks in But now, thanks to regulations, they can't. part to the requirement of multi-acre lots. "This is nat a free market," Goetz said. When this pattern is repeated across the region, a result is not only unaffordable housing, but sprawl Suburbs don't respond to consumer demand Large lots and excessive open space have made the because they fear density -the practice of putting Twin Cities one of the most sprawling areas in the more houses and rental country. - n,,.: "we are sprawled to economic death," said Marc Putman, designer of several forward-looking y ~ t projects, including Stonemill Farms in Woodbury - " ~ ~ ~ and Spirit of Brandtjen Farm in Lakeville. . ~ 4 ~ x> 2 r++' ~ ' , Goetz agrees. "Go ahead. Ask around in the k ~ ~ suburbs how much land they set aside for higher- • ~ ~ ~ ~ density housing," he said. "It will be in the single `{}r't r~ ~ ~ _ - digits, if it's there at all." `a" PILING ON EXPENSE .4i-~' ~ Other regulations, ladled on over decades, also rticneiie ritzpatrick, sales rep for D.R. Horton builder,~takes , have laudable goals. Environmental rules, for sticker off of a window in an entry-level home with the grea example, now ensure new developments will not room concept, at Fieldstone Homes in Lakeville, Thursday, allow rain runoff to flow into streams. June 12, 2008. (Pioneer Press: Jean Pieri) (Jean Pieri) The most common response is to build large retaining ponds to hold back water. That and other units on less land. Officials and voters see it as a environmental regulations add as much as $8,000 step toward crowded, high-crime, inner-city to the cost of a lot. neighborhoods. "They say you can't build here because of wetlands," Instead, suburbs have building and zoning codes Goetz said. "You can't build here because of a rare favoring large houses on large, expensive lots, species. 4 am an environmentalist, but pursuing that as a public objective makes it more difficult to Suburbs commonly require 80-foot-wide lots for. achieve affordable housing. That is a fact." homes, while houses in the core cities fit into lots as narrow as 40 feet. Some suburbs require lots to be Regulations also have successfully made fires less at least two, five or even 10 acres, ensuring only the deadly in homes - at a cost. rich can live there. And builders are groaning as officials debate a new Advertisement ~ n ~ t ~ ~ ~co m ~~oo~ ~7~-~~~~ - ~ 'I ~ wk i ntrad uc~ory offer of ~ ~ ~ . ~ : 33fl/o discount for new subscribers. F'riaz ~'•~vv~r:= ~ ~u a ~ - 2 of4 7/1/2008 8:18 AM `ri http://www.twincities.com/fdcp?1214918296630 MI' ¦ ~ requirement -fire spri~kaers in homes, which NO POINT IN ARGUING would add about $4,000 to-the cost of every house. On a sunny June morning, D.R. Norton's Paul and "It makes absolutely no sense," said Cermak of the saleswoman Michelle Fitzpatrick inspected one of Builders' Association. their least expensive homes, a model called the Isle. Suburbs in the south-metro area require tornado- It didn't look inexpensive. They march up an airy safe rooms in town homes with no basements. These split staircase and checked out the three bedrooms. are steel-doored rooms lined with three-quarter- The home, with a great room, has 1,776 square feet inch-plywood and-Kevlar, the fabric used in of space. bulletproof police vests. The price tag? $2,000. Fitzpatrick pointed out subtle signs of cost cutting: Regulations also often require streets wide enough Formica countertops, not granite; oak cabinets; sash for four lanes of traffic. windows, not casements; and standard General Electric appliances. One Stillwater official demanded a cul-de-sac be enlarged to allow an oversized fire truck to turn "I tell buyers, 'You can put fancy stuff inside, but around in it, said Michael Noonan, president of the what you are buying is the space itself,'" said Minnesota branch of Rottlund .Homes. But the city Fitzpatrick, raising her"voice over the banging of didn't even have a truck that big, Noonan said. nail guns. "There is no wasted space here." "I just looked at the guy and said, 'You have got to But as hard as they work to control costs of be kidding me,"' he said. construction, they have given up any thought of controlling costs by arguing about obeying Many suburbs even regulate what a house looks regulations. like. They require costly architectural extras, such as stonework or full-width porches. "You just do it," Paul said Some call for "360-degree architecture," which Bob Shaw can be reached at 651-228-5433. makes four sides of a house attractive. "It makes a neighborhood more appealing," said Paul, who is WHAT IS AFFORDABLE HOUSING? vice president of sales and marketing for D.R. Horton in Minnesota. Housing is deemed affordable if it costs 30 percent or less of a household's income. In the Twin Cities, But homebuyers will never have the choice of doing the Metropolitan Council considers a $201,000 without it to save money, he said. home and rent of about $883 a month affordable. "They write these things into their zoning Most affordable housing is market-rate housing: ordinances, and it invariably drives up the cost per mostly older-homes and mobile homes that happen unit," Goetz said. "Sometimes, it's done intentionally to be cheap. Suburbs can encourage developers to to make less affordable housing." build market-rate housing, but usually the costs of land and materials are too high. Another problem is Advertisement Tv~r r~ ~ ~ l ~e~ ~~a~~ ~7~-~~~~ CO~"Yl 1 ~ wk in#roductory offer of ~ _ ~ 33'1'0 discount for new subscribers. a,. - ~ , , ~ 3 of4 7/1/2008 8:18 AM http://www.twincities.com/fdcp?121491 L~,296630 ~ ¦ ¦ ~ thaf new market-rate housing often inflates in value and becomes unaffordable. Subsidized affordable housing is more controversial. It includes: New housing subsidized by a federal tax credit to a private developer, who then rents the units at about a 30 percent discount. This is how most affordable units are built in the suburbs. For example, Sienna Ridge in Woodbury charges occupants about $750 a month for a unit that would normally rent for $1,100. Public housing usually refers to federally subsidized units administered by local agencies such as St. Paul's Public Housing Agency. In St. Paul, about two-thirds of public. housing is occupied by the elderly or people with permanent disabilities, according to agency director Jon Gutzmann. Section 8 housing, a federal program that pays up to two-thirds rent, is targeted for. impoverished households and is rare in the suburbs. Section 8 vouchers can be used anywhere; some buildings cater to Section 8 recipients. Habitat for Humanity homes account for a small fraction of affordable homes, offering occupants reduced interest rates in exchange for help building the house. PART 3 OF 3 Sunday: The shortage of affordable housing. Monday: Pushing affordability in the suburbs. -Today: Regulations are considered a hurdle to affordability. Advertisement ~ri?~ } 13 vvic introductory offer of ~ ~ 3?3°/© discount for new subscribers. ` . - 4 of4 7/1/2008 8;18 AM Page 1 of 3 Olson, David From: MN Department of Employment & Economic Development [StateOfMinnesota@ngwmail.des.state.mn.us] Sent: Thursday, July 17, 2008.10:03 AM To: Olson, David Subject: June employment figures from DEED If ou cannot read this masse e, please click here ~ 'I l 11~' ~ 'Lti.l_i ~ For Immediate Release Kirsten.Morell, 651-259-7161 July 17, 2008 Kirsten.Morell@state.mn.us Minnesota Gains 3,400 Jobs in June State unemployment rate drops to 5.3 percent ST. PAUL -Minnesota gained jobs for the second consecutive month in June, with employers adding 3,400 positions on top of the 2,500 jobs that were created in May, according to figures released today by the Minnesota Department of Employment and Economic Development (DEED). The state has added 1,900 jobs through the first half of the year, compared with a U.S. loss of 438,000 jobs during that period. The state's seasonally adjusted unemployment rate dropped to 5.3 percent, while the U.S. rate held steady at 5.5 percent in June. "While some areas of the state and some industries are lagging, Minnesota 's overall economy continues to hold its own compared with the national picture," said DEED Commissioner Dan McElroy. "The state has added jobs in three of the last four months, with manufacturing among the bright spots in June, thanks to steady job growth in computers and electronics manufacturing." Manufacturing added 1,300 jobs during June. In addition, preliminary U.S. Department of Commerce data indicate that the state's manufactured exports are up nearly 10 percent this. year through May, suggesting that international sales growth maybe driving -some growth in manufacturing. Other sectors gaining jobs this month included Government, and Education and Health 07/17/2008 Page 2 of 3 Services, which each gained 1,400 jobs. Growth was also seen in Financial Activities (up 900), Other Services (up 600) and Construction (up 600). Job losses were seen in Trade, Transportation and Utilities (down 1,500), Professional and Business Services (down 800), Information (down 200), Leisure and Hospitality (down 200), and Natural Resources and Mining (down 100). Over the past year, the state has added 7,600 jobs, for a growth rate of 0.3 percent, compared with a U.S. growth rate of -0.1 percent during that same period. Minnesota. industries that have gained jobs since June 2007 are Education and Health Services (up 10,200), Government (up 7,300), Financial Activities (up 2,400), Professional and Business Services (up 2,200), and Leisure and Hospitality (up 2,000). Over-the-year job losses were posted by .Construction (down 8,000), Manufacturing (down 4,600), Trade, Transportation and Utilities (down 2,400), Information (down 600), Other Services (down 900), and Natural Resources and Mining (down 20). Employment in the Minneapolis-St. Paul Metropolitan Statistical Area has grown 0.3 .percent in the past year with the addition of 4,800 jobs. In other regions over the past year, Duluth- Superior grew 0.6 percent with 800 additional jobs, Rochester grew 0.8 percent with 900 jobs, St. Cloud grew 1.0 percent with 1,000 jobs, Fargo-Moorhead grew 0.9 percent with 1,100 jobs, and Grand Forks grew 1.9 percent with 1,000 jobs. These figures are not seasonally adjusted. For additional information on the June employment information, please visit www.po sitivelyminnesota. com. Seasonall adjusted Not seasonall adjusted Unemployment June 2008 May 2008 Rate Minnesota 5.3% 5.4 U.S. 5.5% 5.5 Employment June 2008 May 2008 June '07-June June `07-June '08 Level 08 Percent Chan a Chan e Minnesota 2,778,200 2,774,800 7,600 0.3% U.S. 137,640,000 137,702,000 -167,000 -0.1% Over-the-Year Em to meat Growth b Indust Sector SA OTY Job OTY Growth US OTY Chan a Rate % Growth Rate Total NonFarm Em to meat 7,600 0.3 -0.1 Natural Resource & Minin -20 -0.3 5.9 Construction -8,000 -6.0 -6.1 Manufacturin -4,600 -1.3 -2.6 Trade, Trans & Utilities -2,400 -0.5 -0.7 07/17/2008 Page 3 of 3 .Information -600 -1.0 -1.1 Financial Activities 2,400 1.3 -1.3 Prof & Business Services 2,200 0.7 -0.4 Ed & Health Services 10,200 2.4 2.7 Leisure & Hos itali 2,000 0.8 1.6 Other Services -900 -0.8 0.5 Government 7,300 1.7 1.2 Over-the-Year Em to meat Chan e b Metro olitan Statistical Area OTY Employment OTY Employment Metro olitan Statistical Area Chan e °lo NSA Chan e # NSA Minnea olis-St. Paul MN-WI MSA 0.3% 4,800 Duluth-Su erior MN -WI MSA 0.6% 800 Rochester MSA 0.8% 900 St. Cloud MSA 1.0% 1,000 Far o-Moorhead ND -MN MSA 0.9% 1,100 Grand Forks ND-MN MSA 1.9% 1,000 -30- Upon request, the information in .this news release is available in an alternative format such as braille, large print, audiotape, or computer disk. This message was sent to cioison@ci.iakevilie.mn.us by: MN Clepartme~a# of Emp6oyment Economic Deveiapment (monte.hansonCa~state.mn.us) 332 Minnesota Street Suite E20(3 St. Pau(, MN 55201-1351 • 80®-657-3II58 Subscribe • lPnsubscribe 07/17/2008 Dakota-Scott Workforce Investment Board News and Notes w~~orc~ ip~~~~ spa May-June 2008, Vol. 6-1 tab, /a Pmnk Y.»Yk lur labs. Providing comprehensive, professional, and timely services for job seekers and employers. Welcome to the Dakota-Scott Workforce Investment Race to the Get Jobs Job Fair -Sept. 18th Board's (WIB) News and Notes. This newsletter's The fall edition of the Get Jobs Job Fair will be at purpose is to provide you with an update of workforce Canterbury Park in Shakopee. Contact Mike Lang at 952- and economic. developmentactfvities. 895-7641. www.mnwfc.ore/dakota May Unemployment -Dakota 4.5%; Scott 4.6% Rate was 5.0% for the State and 5.2% nationally (not A Three WIB Meeting seasonally adjusted) The Workforce Investment Boards of Ramsey, http://www.deed.state.mn.us/lmi/tools/laus/Geo~Select.as~x Washington and Dakota-Scott counties held a joint, half- day meeting June 13~'. Stay Current on Unemployment News The goals for the meeting included: Unemployment is in the news a lot with proposed 1. Understand current economic realities and projections in legislation and potential extensions. Keep track of the the Tri-WIB area; latest info at the What's New section of www.uimn.org. 2. Interact with a panel of experts to discuss business, education, labor market and demographic changes; 3. Brainstorm possibilities with fellow Tri-WIB members; Dakota-Scott Top Private Companies 4. Envision proactive possibilities for aTri-WIB collaboration. Companies are ranked by revenue -(from the May 16th Minneapolis-St. Paul Business Journal) The morning featured comments from U.S. Rep. Betty #2 - CHS Inc., Inver Grove Heights McCollum and a panel presentation, which included: #21-Buffets Holdings, Inc., Eagan -Bill Blazar, Minnesota Chamber of Commerce #37 -Northern Tool + Equipment, Burnsville -Rachel Hillman, Department of Employment and #41,-Ames Construction Inc., Burnsville Economic Development #44 - Smead Mfg., Co., Hastings -Martha McMurray, State Demographer's Office #48 -Dart Transit Co., Eagan -Mark Misukanis, Minnesota Office of Higher Education #57 -Walser Automotive Group, Burnsville -Keith Ryskoski, Superintendent of Stillwater Area Public #66 - Norcraft Cos., Eagan Schools #74 -Universal Cooperatives Inc., Eagan #80 -Gemstone Products Co., Mendota Heights After the presentations, attendees worked to identify: #81- Fabcon, Savage 1. What are the top workforce issues you are currently #85 -Transport Corp of America Inc., Eagan facing? 2. What are the top three workforce issues you will face in the next 1-5 years? Veterans JOb Fair - OCt. 9th 3. What workforce issue would you like to see the Tri-WIB The Minnesota Veterans Employment Service and the address in the next year? How? Department of Labor are hosting a statewide Veterans Career Fair Oct. 9 from 11:00 a.m. to 4:30 p.m. at the The leadership of the three WIB's will review the results Earle Brown Heritage Center in Brooklyn Park. and determine next steps. http://www.mnwfc. ors/dakota/wib/triwib. htm The 2007 Veterans Job Fair was the largest single-day event of its kind in the nation. It featured over 100 Minnesota businesses and over 1,300 veterans looking for Tough Jobs to Fill employment. Manpower Inc. posted the results from its "Annual 10 hardest jobs to fill" survey. Engineers, machinists and For additional information, contact Gary Quernemoen at skilled trades top the list. 763-785-6465 garv.quernemoen(a~state.mn.us or http://www.manpower.com/investors/releasedetaiLcfm?Re http://www. ositivelvminnesota.com/events/index.htm leaseID=305783 Kautz Slated to Lead National Organization New Publication Available Burnsville Mayor Elizabeth Kautz was elected Second Trends, DEED's quarterly magazine that examines the Vice President/Advisory Board Chair for the United States state's workforce, demographic and economic trends, is at Conference of Mayors at the organization's annual http://www.deed.state.mn.us/lmi/publications/trends.htm. meeting in Miami, Florida. The post positions her on a three-year ascent to eventuallylead the national organization. Kautz received the WIB's "Friend of Workforce Development Award" in January. Serving People With Disabilities In the last 18 months, the West St. Paul Rehab Services team has assisted 98 people with disabilities, living in Local Counselor Wins State Award northern Dakota County, to find and keep jobs. Staff anticipates a 20% increase in the number of people with Caron Hassen was awarded the Marty Dockman Merit disabilities successfully employed by this time next year. Award at the MN Career Development Association's http://www.deed.state.mn.us/rehab/ conference. Hassen was honored for her excellent work as a Dislocated Worker Counselor. She is an employment counselor with the Department of Employment and Economic Development, providing services to dislocated Career Success Essentials Helps Job Seekers workers in Dakota County. On May 12`" Dakota-Scott Workforce Services presented Career Success Essentials. The one-day seminar focused on the basics of the job search: resumes, networking and Hot New Web Site for Economic Development interviewing. Participants heard directly from employers about what they want to see during interviewing. Career A new web site provides a wealth of information for site Success Essentials will be offered again Monday, Aug. locators, community developers, businesses looking for 1 I~' at the Shakopee Law Enforcement Center and new locations and entrepreneurs. www.metromsp.org Tuesday, Oct. 14~' at the Northern Service Center. Information includes: • economic development statistics • site-specific demographic information Concrete and Masonry Training • searchable list of commercial or industrial properties Dakota County Technical College offers a 9-month • an interactive mapping program to quickly locate Concrete and Masonry program. Demand for this buildings or land training is due to projected growth in commercial building, loss in the number of masons due to retirement, and in anticipation of the hiring of 60-80 masons for fall projects. http://www.dctc.mnscu. edu/prospStudents/programs/maso Dakota County's Aging Initiative nrv.cfm By 2025, older adults in Dakota County will outnumber school-age children. This growth in the population of older residents will affect the way services are delivered. Dakota County is preparing for this "age wave" and its impact on Salary Survey Data generations to come. Living Longer and Stronger in Find the state's latest salary surveys and wages by industry Dakota County is an initiative to create a network of info at: http://www.deed.state.mn.us/lmi/wa eg s.htm accessible communities that provide opportunities for older adults to maintain active and vital lifestyles. http://www.co.dakota.mn.us/HealthFamily/HealthyLiving[ Immigrant Bridges LiveLone/default.htm A tremendous site for immigrants and those working with immigrants is "Immigrant Bridges." It includes orientation guides, FAQs, and connections to helpful resources. Have an Interesting Job? <http://www.knowing_ Workforce Services is piloting a career day during the edse.com/immigrant ue ide/ keui/active/index.html Burnsville Job Club once a month. Professionals with interesting or high demand jobs will talk about what they do, how they got the job and what someone interested in WI& Chair Is Guest Columnist for Sun-Current that job might consider. If you have an interesting career See Cathy Weik's column entitled "Finding a 'dream job' and are willing to volunteer an hour talking to jobseekers, isn't easy" at call Helene at 651-554-5908. http://www.mnsun.com/articles/2008/06/25/opinion/cw26a d~obscolumn.txt