Building a Common Vocabulary
By Doris Rubenstein
Minneapolis Star Tribune, April 29. 2000

It took a while, but local non-profit and faith-based organizations finally caught on. After years of advocating for "affordable housing," they changed their rhetoric to a catch-phrase that has caught the ear of business: "workforce housing."

Non-profit organizations have been advocating for affordable housing for well over three years, but business didn’t seem to be on the same page. There was little conversation between business and non-profits on this subject until business started realizing that one of the main reasons that economic growth wasn’t happening as it should was the shortage of housing for workers at all levels. Workforce housing suddenly became a cause celebre for business and non-profits to promote together.

No one can question the fact that there is a housing crisis in the Twin Cities. The crisis exists throughout the entire State of Minnesota. Property values have skyrocketed. Even in hard-core inner-city neighborhoods like Phillips in Minneapolis, the median price of a home rose 51% between 1999 and 2000. That median home is valued at $83,073.

Workers now must earn a salary of over $27,400 to afford even the most modest starter home in traditional blue-collar neighborhoods like North Minneapolis. The figure is even higher -- $30,800 – for St. Paul’s "affordable" Central neighborhood. Yet, 40% of all Minnesota jobs earn less than $10/hr. That means that a couple of $10/hr. wage earners cannot afford a median-priced existing home in the Twin Cities, or a newly-constructed market rate home or apartment. Of course, that all depends on there being a home available.

Non-profit’s view: The Minneapolis Foundation is taking the lead both in creating an awareness of the problem and providing a forum for discussion of possible solutions. It sponsored a conference in March to examine the issues. Co-sponsors were the United Way of the Greater Twin Cities, the Minneapolis and St. Paul Coalitions for the Homeless, Family Housing Fund, and Minnesota Housing Partnership. Speakers included Governor Ventura and Reverend Calvin Butts, III, Pastor of New York City’s Abyssinian Baptist Church.

Numerous solutions were proposed. Former Senate candidate Michael Ciresi laid out his idea for a "Build Minnesota Fund" for non-profit housing. The fund would be underwritten by Minnesota businesses.

Business’s view: Minneapolis Chamber of Commerce President Dave Jennings

refuted the effectiveness of such a proposal. He observed that corporate giving has only minimal impact on problems as large as this. His solution was to provide greater incentives for construction to private housing developers through tax cuts and other financial incentives.

Both arguments have merit.

Jennings’ view that corporate giving has but minimal impact may be true in macrocosm, but does not stand up when viewed on a family-by-family basis. For each family who works on and earns a home through Habitat for Humanity sponsored by corporate funds, the impact is huge.

Ciresi’s proposal failed to appreciate the yeoman efforts of the many non-profit housing groups already working hard. There is no need to reinvent the wheel. There is just a need for business to buy into groups with good track records in building workforce housing.

Too few businesses have a plan for giving, much less a strategic plan for giving to support workforce housing. Increased giving to these organizations will provide business with some of the tax breaks they desire through charitable deductions. This is the start of public-private partnerships.

Examples: The Minneapolis Community Development Agency (MCDA) has many examples of public-private partnership housing projects. One successful project is a mixed-use development in Minneapolis’s Harrison neighborhood, initiated by the Redeemer Center for Life, an outgrowth of Redeemer Lutheran Church. "Milda’s Corner" was reborn on an abandoned commercial corner with Milda’s Café and other retail tenants, a professional office suite, three market-rate apartments, and four transitional housing apartments. Private sector contributors included Ryan Companies and Hirshfield’s. The success of Milda’s Corner has spurred additional housing redevelopment options for the working poor in Harrison, where the median income in 1998 was $17,000.

Redevelopment can be a win-win situation when non-profits and developers cooperate. The Fred Babcock VFW Post in Richfield temporarily vacated its site to allow Gramercy Park Builders to construct a high-rise senior cooperative. This partly replaces housing units of working families lost in Richfield due to airport expansion. Richfield seniors who moved into the coop have vacated their older homes for young families – the workforce population, some displaced by the airport -- to buy and remodel. The new coop building also houses new facilities for the Babcock VFW post. It’s a win-win situation.

Government’s part: The faith community united for housing and State government showed a new level of cooperation at a State Capitol rally at the beginning of the current session. Hundreds of people jammed the Capitol Rotunda, waving banners, brandishing buttons, and then spreading out to lobby key legislators to increase funding for workforce housing. Speakers from the legislature gave rousing support to the crowd.

The Legislature can also look at innovative ways of providing mechanisms to solve this problem without adding more bureaucracy to the equation. If housing is indeed in an undisputed crisis, tax-breaks to builders may be an option. Legislative oversight is needed to assure that at least part of the tax-break is used for reinvestment into workforce housing, and not handed back entirely for investor profit. What might these reinvestments look like?

Reinvestment can be

• set-asides in new housing construction for units to be sold to low-income wage-earners or other similar consideration.
• cash donations to homeless programs.
• donations-in-kind to non-profit builders, or any number of new ideas.

Legislators can treat donations to housing programs much like political donations: Business (and individuals) can get a 100% refund of the first $1,000 they donate to non-profit housing programs. Surely, our legislators can think of other creative solutions to encourage public-private partnerships to address the housing crunch.

We can fix this. The guest list for the Minneapolis Foundation’s conference read like a Who’s Who of Minnesota philanthropy. Foundations, educational institutions, and non-profits were richly represented; and government agencies dealing with housing and related issues also sent representatives. Who was missing?

Business was conspicuous by its absence. There are only two explanations for the absence of builders, developers, banks, and mortgage companies. Either they chose not to attend, or they were not adequately encouraged to participate. This seems to indicate a disconnect in the communication between several part of our economic community who must work together to make housing work in our State.

What can business do to become involved? Check with your local Chamber of Commerce and join a taskforce to study and provide advocacy on the issue. Create a partnership with a non-profit housing organization. Your company can donate money, goods, services, or volunteers to help them with the housing service they provide. Your employees are citizens who need housing and your corporate citizenship program should reflect their needs.

Workforce housing is a complex issue. It affects people of all income levels. It affects the economic and environmental health of our State. It requires private, public, and cooperative efforts to remedy the problem. Public-private partnerships, be they in the arts, education, or housing, are part of good corporate citizenship. As the theme of the Minneapolis Foundation’s housing campaign says, "We conquer floods, tornadoes, and blizzards. Yet tonight 3,050 Minnesota kids are homeless. Let’s fix this."