Strong infrastructure and public safety are the pillars of a strong city, and you can’t have either without a growing economy and fiscal responsibility. My 2013 budget invests in all of them — as it does in building and preserving housing and stabilizing our neighborhoods, which also help grow our economy.
Minneapolis is defined by miles and miles of strong middle-class neighborhoods, which are the bedrock of one of the strongest middle classes of any city in the America.
But that bedrock is weaker than it was. For many years, 93 percent of single-family homes in Minneapolis were homesteaded. Last year that fell to 80 percent, and in some neighborhoods it was much lower.
This is why the budget I proposed invests in stabilizing neighborhoods and helping people stay in their homes. With the help of the Obama Administration, we continue to fund successful programs that grow a new generation of single-family homeowners, including Minneapolis Advantage, City Living and Home Ownership Works, among others. HUD Secretary Shawn Donovan has praised Minneapolis’ approach as a national model.
Another new effort we have begun in the last year is called the Rehab Support Program: it targets middle- and lower-middle-income homeowners who find that unexpected home repairs put them in danger of foreclosure or walking away, and offers them a forgivable loan. We have applied for State funding to double this program.
The foreclosure crisis hit Minneapolis hard: from 2007 to 2011, more than 12,000 properties were foreclosed on. Even though the rate has slowed dramatically — in 2012, we are on track for less than half the foreclosures of 2009 — the number is still far too high. My budget also continues to fund our foreclosure-prevention efforts.
For the last five years, we have funded a partnership with the Homeownership Center, which worked with homeowners and lenders to help prevent 1,473 foreclosures. Their success rate is high: counselors are typically able to help two-thirds of homeowners who seek their help to avoid foreclosure.
And we are beginning a new effort called Project Homeowner Connect. The Homeownership Center will pull together under one roof a wide variety of service providers, including lenders, who will help homeowners stay in their homes, including those who have fallen behind. We aim to hold Project Homeowner Connect at least three times a year, because it doesn’t take long for a homeowner with the best of intentions to start falling behind on a mortgage.
Green Homes North
Foreclosures hurt not only a homeowner, but also can destabilize a neighborhood and hurt the home values of everyone who lives nearby. We have seen this have dramatic consequences in some neighborhoods, especially North Minneapolis.
We realized we needed a “big bang” to restore confidence and excitement to the Northside housing market, so at my State of the City speech this year we announced a bold new effort.
Green Homes North will build 100 green, sustainable, affordable homes on City-owned vacant lots in North Minneapolis over the next five years, and in the process will provide sustainable, affordable housing; create good, green construction jobs for local residents; and support local green businesses by sourcing materials through them.
And these homes won’t just benefit the people who will live in them: they will also restore value to neighbors’ homes and vitality to their blocks and the entire neighborhood. Everyone will benefit.
Getting lenders to do more
Banks, lenders and financial institutions also need to do everything they can to prevent foreclosure. Far too often, however, homeowners in trouble can’t master the complex home-mortgage system. Banks and lenders need to step up voluntarily and do more to help, including negotiating with homeowners to reduce interest rates, clearing the way for more refinancing and short sales, and reducing principal.
We are also working with advocates on requiring the City’s depository institutions to report more data about what they are doing to work with homeowners to prevent foreclosure.
And at the federal level, the City Council and I are working to get Freddie Mac and Fannie Mae, who own or insure up to 60% of all home mortgages in the country and have been far too inflexible with homeowners and communities, to establish a principal-reduction program.
Finally, my 2013 budget also continues our long-term investment in the Affordable Housing Trust Fund, which has gotten great results. From 2003 to 2012, it invested $82 million to create 6,500 units of affordable housing for low-income residents. That investment also added $600 million to the tax rolls, which helps everyone.
Please let me know what you think about my budget and our investments in jobs and economic growth. Contact me here or me at email@example.com, with “Growth” in the subject line. I will keep these updates about the 2013 budget coming.
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