On Tuesday, Hennepin County Board will also cast a critical vote — whether to spend $88 million on flawed “affordable” housing project

November 2, 2020 11:50 am

Officer’s quarters buildings at Fort Snelling’s Upper Post site. Photo by Philip Prowse. Courtesy of the National Trust for Historic Preservation.

The Hennepin County commissioners recently voted in favor of issuing $88 million in bonds for an astronomically expensive housing project known as the Upper Post Flats. The project will not result in a single apartment that’s affordable to the growing number of families who most desperately need housing in the Twin Cities.

The calculations behind affordable housing are complicated. But the math on this project is elementary: $903,000 per apartment is an outlandish cost and limited public resources should be spent elsewhere.

On November 3, as many Minnesotans cast a ballot, this overpriced project will come before the Hennepin County Board again for a final vote on the bonds.

Commissioners must vote no on Upper Post Flats, which is being developed by real estate giant Dominium, but only with the help of piles of government money.

We have state guidelines to ensure federal tax credits and state bonding dollars go to affordable housing developments that use those resources efficiently and meet real community needs.

In 2017, Dominium asked Minnesota Housing for bonding dollars to help fund ostensibly affordable apartments at the Upper Post site at Fort Snelling. At $550,000 per unit at that time, Dominium’s proposal did not meet the guidelines for funding. But when Minnesota Housing denied the application, the Plymouth-based corporation wielded their monied influence to pass a special bill in the waning hours of the 2018 state legislative session to prohibit our state’s housing agency from considering the cost of the project.

Over the past several years, the costs have continued to climb — up a staggering 64% since Dominium first put out its hand for bonding dollars. Dominium has openly acknowledged that this project is uniquely expensive and they have “made very bad guess[es]” about how much it will cost. By their own admission, the feasibility of this project — even with massive public subsidy — is challenging at best.

And let’s put those rising costs in perspective. At $903,000, each “affordable” apartment at the Upper Post will cost three times the average price of a single family home in the Twin Cities. Once they’re built, the rent for a one bedroom will be $1,200 and $1,400 for a two bedroom — the same as the average rent in the Twin Cities right now without any public subsidy.

With the same public funding, a nonprofit developer could create five times as many units as Dominium at dramatically lower rents. And, these nonprofit developers commit to keeping their units affordable in perpetuity, whereas for-profit developers like Dominium often flip projects like the Upper Post Flats to much higher, market-rate rents as soon as the law allows.

Because of structural racism and systemic exclusion, people of color are disproportionately experiencing high housing cost burdens, housing instability and homelessness. In June, Hennepin County showed political leadership in declaring racism a public health crisis, noting in its resolution the urgency to address disparities in areas like housing as a core principle of county programs and services. Providing funding to the Upper Post Flats project actively undermines that goal by subsidizing housing that we know will be far out of reach for the median renter household of color in the Twin Cities.

Like so many of Dominium’s so-called affordable housing projects, the apartments at Fort Snelling will be affordable to renters earning 60% of the area median income. That’s $43,000 per year for an individual or $62,000 for a four-person household.

As Commissioner Angela Conley pointed out, “The average income for Black individuals in Hennepin County is $30,000, and you have to be making $43,000… The average income is even lower for Native Americans, for whom this land specifically is sacred. We can’t afford to live in this development.”

Especially with the unprecedented housing instability the COVID-19 pandemic has brought to our communities of color, we need political leadership that calculates the community impact of every single dollar of public subsidy. It makes no sense to lend $88 million from our public coffers to help pay for a privately owned project that will produce fewer units renting at higher levels than other developers have proven is possible — with the knowledge that the public subsidy right now will ultimately underwrite Dominium’s corporate gain in the long-run.

When it comes to limited public resources for critical needs in our communities, our calculations must prioritize permanent, deeply affordable housing and explicitly address generations of racial injustice.

We need to support nonprofit and community developers that provide housing at a quarter of the cost of the proposed Upper Post project, with lower rents, and a long-term commitment to affordability. On November 3, the math is clear: Hennepin County Commissioners must vote no.

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Owen Duckworth
Owen Duckworth

Owen Duckworth is the Director of Organizing and Policy at The Alliance. He brings with him years of organizing experience, and a deep commitment to fighting racism in our region. Owen staffs the Equity in Place coalition, which is made up of housing advocates and community organizations based in diverse cultural and geographic communities, working to advance racial justice and housing justice in the Twin Cities region.