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Big-unit housing incentive survives; St. Paul persuaded to keep inducement for developers

BY: Steve Brandt; Star Tribune (Minneapolis, MN) June 13, 2002, Thursday

Housing advocates have persuaded St. Paul officials to keep an incentive for developers of low-income apartments to build units with three or more bedrooms.

A housing finance board voted Wednesday to stick with an existing policy. It awards bonus points to housing proposals competing for federal tax credits. Advocates say larger apartments are critically needed.

City Council Member Kathy Lantry moved to nix a staff proposal to change incentives at a meeting of the Minneapolis/St. Paul Housing Finance Board. The board sets criteria for awarding credits.

"The larger-family housing is desperately needed," said Charlie Warner, executive director of HOME Line, a tenancy advocacy group.

Xang Vang explained why from the perspective of recent immigrants. When Hmong first arrived in the 1970s, there were plenty of vacant four- and five-bedroom buildings to be fixed up for occupancy.

"Now there is no such housing available for sale or for rent," said Vang, executive director of the Hmong American Mutual Assistance Association. That's meant multiple families sharing four- and five-bedroom homes.

"Should we move our relatives out? It is too cold to chase any cousin out during the winter months," Vang said.

Housing tax credits are awarded to developers of lower-income housing to attract investors. Proposals at the state or city level for credits are scored according to how well they meet criteria. St. Paul gave increasing numbers of points according to the proportion of units that were three-bedrooms or larger.

But city officials said that those points often helped townhouse proposals, which are less dense and more expensive per unit than apartments. So they proposed cutting the bonus for larger units to one-third its previous level.

GVA Marquette Advisors, which tracks market conditions, found in a recent survey that St. Paul had a vacancy rate of 1.2 percent for three-bedroom apartments, compared to 3.9 percent for one- and two-bedroom apartments.

HousingLink, a nonprofit clearinghouse for seven-county affordable-housing information, reported recently that 45 percent of tenants using its housing search services sought rental units with three bedrooms or more. But few were available and affordable.    .        _ Steve Brandt is at sbrandt@startribune.com or 612-673-4438.