A lot has changed on the Northside in the last 20 years. The amount of people living in poverty has doubled. The amount of subsidized housing has increased while owner occupied homes have dropped dramatically. The markers of stability are being chipped away year by year. With the current foreclosure mess, there is opportunity for more homeownership and less rental but because of the credit crunch many potential buyers are being forced out of the market. It is unfortunate since many home sales now are at 1990s market rates.
Increased levels of homeownership would be beneficial for the overall health and neighborhood stability of North Minneapolis. And what are the benefits for the whole community, particularly for our community members who are renting subsidized housing?
In North Minneapolis, the homeownership rate is 60 percent, according to City of Minneapols January 2008 housing data, but because of the foreclosures plaguing the Northside these numbers are no doubt skewed lower. Conversely this means there is about 40 percent rental on the Northside. And of that rental proportion 20 percent is subsidized. Camden had 25 percent (626 units), whereas south of Lowry had a 14 percent rate (766 units) under the Section 8 Voucher Program. Folwell had the extreme disparity in 2007 of having 43 percent of rental property as units subsidized. The city average is 5 percent.
Many of the foreclosed homes were being used as rental properties. Some are slowly becoming market ready with many being purchased for more rental housing. It would be ideal for new homeowners to purchase them. Recent Minneapolis ventures such as the “Advantage” plan and new “conversion fees” on non-homestead properties are realizing the ownership needs for the Northside. Will these alone be enough to encourage ownership?
So why is homeownership a need for our community? With higher levels of homeownership, community livability standards increase for the entire community.
William Rohe, professor at UNC, researched homeownership rates and effects on communities. His research finds more homeowners increase property values — as much as $1000 for every 1 percent increase in ownership rates. Increases can help improve the physical appearance of the community (maintained property, less trash, etc.). Higher rates of homeownership were shown to improve a number of social conditions in a community as well. The research documents better educational attainment, lower school dropout rates, lower crime rates, and less teen pregnancy in communities where ownership stabilization methods are used. Rohe also adds that homeowners become more engaged and involved in community organizations and are more likely to work for betterment of the community as a whole. They are also more likely to create stronger neighborhood bonds by networking with other members of the neighborhood. Thru increased social networking the entire community flourishes through more training resources and better constructive norms.
Additionally, as homeownership increases the retail and commercial opportunities in neighborhoods increase as well. More employment opportunities, particularly part-time jobs and youth employment become available.
John Harkness, from John Hopkins, has also done extensive research on how homeownership affects children in neighborhoods with high poverty rates. Harkness concludes that homeownership has many benefits for children in the community attaining stability and creating social bonds. The transient effects that subsidized housing and rental living has on children are great. It affects their ability to create relationships, their educational attainment, and their social behaviors.
Richard Green has also studied how homeownership effects children’s educational attainment and homeownership. He states they become less likely than children of renters to drop out of high school or to have children as teenagers. Effects are largest for children of low income households. The results show that children of homeowners also have a higher probability of staying in school than children of renters.
Subsidized housing and rental housing are filling up entire blocks of North Minneapolis. These are not high-rise apartments or duplexes, etc. that are normally defined as rental. Were our neighborhoods, our blocks, our homes built and designed for the commercial use of a rental property? Is 20 percent rental and subsidized housing, too much for our neighborhood?
Many experts say yes. Paul Joyce from the University of Kentucky studied comparisons between crime and subsidizes housing. “When public housing…approaches the density of traditional public housing (greater than 50 units per square mile), it could have a more adverse impact on the community than a traditional public housing project would have. Thus, when it is necessary to provide many new units, traditional, high density public housing may be the better alternative.”
The argument for deconcentration of subsidized and rental housing in neighborhoods benefits renters and homeowners. Instead of offering more subsidized vouchers Harkness says it would be much better to have more homeownership opportunities for low income families. They attain wealth, and aid in creating community stability. And George Galster, one of the most prominent urban affairs experts, warned in a 2003 paper, “Without deconcentration of impoverished areas, lower income communities are at high risk for substance abuse, pregnancy before marriage, violence and crime and other social ills”
And what about the residents of subsidized housing when so many are concentrated at the density we have in North Minneapolis? Does this “pack them in” policy help lower income families and communities out of poverty? Sandra Newman, also from John Hopkins, says no. Newman states “…public housing residents appear to be significantly worse off than the welfare population at large, most of whom do not receive housing assistance of any kind. Public housing’s poor performance appears to be widespread and cannot be attributed to only a small proportion of seriously distressed developments.” Joyce expresses his concerns that subsidized housing in high density does nothing to help the recipients, the communities. Newman boldly calls the current policies at HUD “racist.”
Subsidized housing also impacts property values. Ingrid Ellen, Associate Professor of Public Policy and Urban Planning at NYU Wagner, has done extensive research on the impacts of subsidized housing on communities. In a study titled “Does Federally Subsidized Rental Housing Depress Neighborhood Property Values?” Ellen’s research revealed that the more there is the more decline in value of a community - as much as 10 percent.
North Minneapolis has much promise and much to offer new residents. It has great parks, it is close to downtown, and has sturdy classic homes. It is culturally diverse. It has many committed to make it better.
The local, state and federal governments need to do more to encourage home ownership, but in the end it’s our responsibility because we are the government. We all need to unite to create a positive momentum. Nonprofit organizations need to do more to help end the poverty in our community. We need education for the families receiving vouchers on how to live in and take care of a home. We need more positive role models. And we need strong leadership with positive voices representing all the residents of North Minneapolis to work together and address these issues.