95-8264r
37
RESOLUTION NO. 8264
RESOLUTION AUTHORIZING ADOPTING A HOUSING PLAN AND FINANCING
PROGRAM FOR THE ACQUISITION OF CERTAIN MULTI-FAMILY HOUSING
FACILITIES
WHEREAS, the City has prepared a housing plan (the "Plan") in accordance with
Chapter 462C; and
WHEREAS, the City has prepared a financing program (the "Program") providing
for assistance in the financing for non-profit entities of the acquisition of 422 multi-family
rental units; and
WHEREAS, the City Council of the City of Richfield has on this date held a
public hearing on the Plan and Program after publications of notice and after
submission of the Plan and Program to the Regional Development Commission; and
WHEREAS, Minnesota Statutes require that the City adopt a Plan and Program
pursuant to Chapter 462C prior to the issuance of certain obligations.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Richfield as follows:
1. The Plan and Program (attached as Exhibit A) are hereby in all respects
adopted.
2. The staff and consultants of the City are authorized to do all things and take
actions as may be necessary or appropriate to carry out the Plan and Program in
accordance with the applicable State Statutes and any other applicable regulations.
Adopted by the City Council of the City of Richfield, Minnesota 24th day of
July,1995.
ATTEST:
~ f?~~/
Thomas P. Ferber, City Clerk
Exhibit A
462C HOUSING PLAN
AND MULTI-FAMILY HOUSING PROGRAMS
CITY OF RI(.;J:l14.utlJ)
RI(';J:l14aLD HOUSING AND REDEVELOPMENT AUTHORITY
April, 1995
.i
.,.
n.
m.
IV.
I.
A.
B.
C.
D.
E.
F.
G.
TABLE OF CONTEr..,.S
Introduction
Data Summary and Analysis
Population and Households
Employment Statistics
Age Distribution and Income of Residents
Number and Type ofDweUing Units
Tenure of Housing Stock
Single-Family Housing Costs and Market
Multi-Family Rental Ranges and Market
Housing Needs, Housing Policy Plan and Target Areas
Multi-Family Housing Programs and Financial Tools
A.
B.
Apartment Acquisitions
General Provisions
1
2
2
2
4
5
5
7
8
9
10
10
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I. INTRODUCTION
The City of Richfield is a fIrSt-ring suburb on the southern edge of the City of Minneapolis and the western
edge of the MinneapoIis-St. Paul International Airport. The vast majority of the housing stock in the City
consists of single-family ramblers built in the 1940s aDd 19505 and one and two bedroom apamnents
constructed in the 19605 and 19705.
However, the market for housing, the population, and the physical characteristics of the City of Richfield
have changed significantly in the past 10 years. The amenities sought by homebuyers and renters,
particularly you~g families, include amenities which are not widely available in the majority of housing in
the City. Larger three and four bedroom homes, updates in design and function, and low maintenance
finishes are also in demand.
The choice of housing and the general trends in the age distribution of the City have resulted in a decrease
in population of the City of over 20 percent during the past 20 years. The aging of the population in the City
has also resulted in an increased demand for a full range of senior housing opportUnities. At the same time,
the population has become more diverse in economic and social characteristics resulting in an increased need
for diverse housing.
In addition, land use changes are decreasing the housing supply. The City's New Ford Town Area and Rich
Acres, which are adjacent to Minneapolis-St Paul International Airport, have been designated for a federally
funded buyout program. The approximately 420 housing units are scheduled to be purchased and removed
within the next three years. The construction of the new nth Street frontage corridor and the adjacent retail
development in the ILN Tax Increment District have or will result in the loss of 61 units of single family
homes and 74 apartment units.
In response, the City and the Housing and Redevelopment Authority (lIRA) have initiated a number of
programs to encourage diversification of the housing stock. The details of these efforts are included in these
documents.
This Housing Plan and Multifamily Housing Program, undertaken pursuant to Minnesota Statutes, Chapter
462C, as amended (the "Act"), provides data and data analysis of the CitYs population and housing
conditions; sets forth the housing goals and policies which guide the decision making process; and identifies
programs and efforts the Richfield HRA will pursue to conserve, preserve, enhance and expand the CitYs
residential environment
The City and HRA adopted a Housing Program on December 29, 1983, intended primarily for the allocation
of single-family mortgage revenue bonds. This Housing Plan and Program will concentrate upon the multi..
family needs in the community.
n. DATA SUMMARY AND ANALYSIS
A. Population and Households
i
The City of Richfield is located entirely in Hennepin County in the Twin Cities metropolitan area. It is
located immediately adjacent to Minneapolis' southern border. Richfield became a village in 1908 and a city
in 1964. The City covers 7.1 square miles and had a 1993 estimated population of35,538.
1
Table I
Richfield Population and Households
Population
Households
1970
47,231
1980
37,851
15,252
1990
35,710
15,607
2000
36.500
16.000
2010
38,100
16,200
Source:
Bureau of Census. U.S. Census of Population and Housing. 1970. 1980. & 1990 and the Metropolitan Council.
B. EmDlovment Statistics
The City of Richfield is predominantly a residential community. The commercial/industrial
tax base primarily consists of retail development.
Table II
Estimate ofTen of the City's Largest Taxpayers for 1993/94
Tax Capacity as
Business Tax Percent of City's Property
Taxoaver NamefTvoe Caoacitv Net Tax Caoacitv* Classification
Bradley Real Estate Trust Hub Shopping $568,350 2.7% Commercial
Northwest Unit Investment Co. Century Courts 431,897 2.0% Apartment
Market Plaza Market Plaza 416,150 2.0% Comm.lApts.
COP Inc. COP 244,178 1.1% CcrrrnNVaretn1!
Carlson Real Estate Co. Richfield Shoppes 235,990 1.1% Commercial
Richfield State Agency Inc. Richfield Bank 205.092 1.0% Commercial
Sage Corporation Apartments 192,960 0.9% Apartments
Naegele Outdoor
Advertising Co. Naegele Signs 175,040 0.8% Commercial
Rap Investment Co. Apartments 170,000 0.8% Apartment
Steven Operating Inc. Fountain Head Apts. 140,658 0.7% Apartment
it
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Table III shows major employers in Richfield with the total number of employees as of
March 1993. Total employees include full- and part-time workers and average number of
seasonal employees.
Table III
Richfield Major Employers
March 1993
Emolovers
Copy Duplicating Products
Richfield Bank & Trust
Lunds
KMart
Wally McCarthy Oldsmobile
Walzer Buick
Metro Sales
Lyndale Hardware
Naegele Advertising
Lyndale Garden
Walgreens
Drug Emporium
Richfield Mitsubishi
Industrv
Office Supplies
Banking
Grocery
Retail
Auto Dealer
Auto Dealer
Copies Supplies
Hardware
Advertising Agency
Lawncare Products
Retail
Retail
Auto Dealer
Total Emolovees
350
206
150
150
90
90
75
75
70
70
60
44
38
Source:
MN Department of Trade and Economic Development, Community Profile. March 1993
Table IV
Hennepin County Employment by Industry
December 1980
December 1990
Agriculture, Forestry & Fishing
Mining
Construction
Manufacturing
Transportation & Public Utilities'
Trade
1,458
289
22,536
122,430
35,104
163,550
47,651
144,309
71.747
609,363
2,479
63
23,016
121,508
47,192
188,173
64,396
212,684
81.228
740,739
F.I.R.E.2
Services
Government
TOTAL
Source:
MN Department of Jobs & Training. Minnesota Employment & Wages by County, Fourth Quaner. 1980 ancl MN
Department of Jobs & Training, Minnesota Employment & Wages by Region ancl County, Fourth Quarter, 1990
In 1980. category was called Transponation. Communication & Public Utilities.
Finance, Insurance and Real Estate
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C. Age Distribution and Income of Residents
Richfield, like other communities across the country, is finding that senior citizens are the
fastest growing segment of its population. In fact, persons over 65 years old increased in
numbers by 2,053 from 1980 to 1990, an increase of over 52 percent. The sheer numerical
increases in this housing market points to a significant need to offer new types of housing
for citizens with a wide array of incomes and needs for services. Secondarily, the "baby-
boomersll or persons from 25 to 44 years old were the other sector of population to
increase its ~hare from 1980 to 1990.
Table V
Richfield Area Age Distribution.
1980 & 1990
Number
Percent
Age Age Age Age Age
Total Population 18 & Under 1~24 2~ 45-64 65 & Over
1980 1990 1980 1990 1980 1990 1980 1990 1980 1990 1980 1990
37,851 35,710 9,027 7,261 4,963 3,219 10,614 14,421 9,281 6,790 3,966 6,019
100% 100% 23.85% 20.33% 13.11% 9.01% 28.04% 34.78% 24.52% 19.01% 10.48% 16.865
Source:
Bureau of the Census, U.S. Census of Population and Housing, 1980 & 1990.
Household and family incomes in the Richfield area have shown steady increases and
diversification over the past decade. Again, these data point to a need to diversify the
housing options for the community.
Number
Percent
Table VI
Richfield Area Household Income
1979 and 1989
1979
Less Greater
Than $10,000- $20,000- 525,000- $35,000- Than
Median
llQ.2QQ 519.999 524 999 534.999 549 999 m.2QQ
Income
2,988 4,457 2,113 3.234 1.858 602 $20,424
19.59% 29.22% 13.85% 21.200,4 12.18% 3.95%
1989
Less Greater
Than 510,000- 520,000- 525,000- 535,000- Than
Median ..
llQ.2QQ 519999 524.999 534 999 549'999 m.2QQ
~
1,218 2,754 1,678 2.816 3.674 3,467 $32,405
7.80% 17.65% 10.75% 18.04% 23.54% 22.21%
Bureau of the Census. U.S. Census of Population and Housing, 1980 & 1990.
4
Number
Percent
Source:
D. Number and Tv De of Dwelling Units
Richfield is a city with primarily owner occupied housing units. The traditional style of the
housing stock is evidenced by the relatively small number of townhouse and duplex units.
Table VII
Dwelling Units
1990
TOTAL
Percent
of Total Numbers
10,329 64.18%
324 2.01 %
195 1.21%
5,082 31.58%
69 0.43%
95 0.59%
16,094 100.00%
Dwellinc Tvoe
Single Family Detached
Townhouse
Duplex
Other Multifamily
Mobile Home
Other
Source: 1990 U.S. Census
~ Tenure of Housing Stock
The age of the housing units varies widely in Richfield. However, over 82 percent of the
owner-occupied housing was built between 1940 and 1959 and almost 75 percent of all
rental housing units were built before 1970.
Table VIII
Richfield Area Age of Occupied Housing Units
(Percent of Total O~cupied Structures Owned and Rented)
. 1990
Year Built
Units Prior to 1940 1~1949 1950-1959 196D-1969 1970-1990
Owned Rented ~ Rented ~~ ~ ~ ~ B!!!1!2 Owr!ed ~
Number
10,406 5.145 602 75 2.961 361 5.671 1,180 565 2,154 e07 1,375
Percent
100.00% 1 OO.OOO~ 5.79% 1.46% 28.45% 7.02% 54.50% 22.93% 5.43% 41.87% 5.83% 26.72%
Source: Bureau of the Census, U.S. Census of Population and Housing. 1980 & 1990.
In addition, people who own older homes have lived inthem for most of their lives. An
amazing two-thirds of people over 75 years of age in Richfield live in their own home as
shown in Table IX. It is also an indication that seniors may want to remain in the
community but have few options from which to choose.
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Table IX
Richfield Area Tenure
By Age of Householder
1990
~ ~ ~
15-24 Own 103 0.99%
: Rent 808 15.70%
Total 911 5.86%
25-34 Own 1,850 17.78%
Rent 1,832 35.61%
Total 3,682 23.68%
35-44 Own 2,009 19.31%
Rent 948 18.43%
Total 2,957 19.01%
45-54 Own 1,570 15.09%
Rent 396 7.70%
Total 1,966 12.64%
55-64 Own 1,650 15.86%
Rent 348 6.76%
Total 2,455 12.85%
65-74 Own 2,146 20.62%
Rent 309 6.01 %
Total 2,455 15.79%
75+ Own 1,078 10.36%
Rent 504 9.80%
Total 1,582 10.17%
Total Own 10,406 100.00%
Rent 5,145 100.00%
Total 15.551 100.00%
Source: Bureau of the Census, U.S. Census of Population and Housing, 1990.
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t,t.
F. Sinale-Familv Housin9 Costs and Market
Richfield has a rather narrow variety of housing, from 1950s ramblers to split-level designs
of the 1960s and 1970s. The vast majority of the housing stock has been well-maintained
and pride of ownership is evident. The Richfield School Distrid has an excellent reputation
and Richfield is perceived as a very desirable community in which to live. Housing is
affordable, with average home values between $80,000 and $90,000. However, homes
in this price range are in extremely short supply, as are homes in the $100,000 to $120,000
price range... Although housing is affordable, buyers cannot find a home to buy. In
addition, the lack of available alternatives for other market segments (particularly empty-
nesters and seniors) has resulted in persons remaining in their homes longer than
necessary. If these people had been able to move, their homes could have been
purchased by other households.
The Richfield Rediscovered Program, in which substandard residential properties are razed
and replaced with new homes with generally two to three times the market value, continues
to be very successful. In the past two and a half years over 30 homes were constructed
under this and ancillary programs and ten to twelve are anticipated during 1994.
The following are the key factors at work in the for-sale market:
Substantial shortage of resale homes in all price ranges due to recent strong sales
activity, and older homeowners not selling. Local real estate agents have buyers who
are looking to buy.
Much of the reason for the lack of available homes for sale is tied directly to the number
of senior citizens who continue to reside in their own homes.
Homes in Richfield are generally well-maintained and in good condition.
Greatest demand is for homes priced between $70,000 and $80,000 and homes priced
between $100,000 and $120,000.
Table X
Richfield Home Sales
1988 through 1993
Period
of Sales
January 1987 - September 1988
January 1988 - September 1989
January 1989 - September 1990
January 1990 - September 1991
January 1991 - September 1992
January 1992 - September 1993
Number
of Sales
790
668
710
679
732
864
Total Price
of Sales
$62,994,171
54,166,086
58,467,654
56,346,840
61,533,834
73,316,233
.t.t
Average Price
of Home
579,739
81,087
82,349
82,985
84,063
84,857
Source: MN Department of Revenue. Sale price does not include personal property. These figures may not include all new
construction.
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G. Multi-Familv Rental Ranges and Market
Most of the rental housing in Richfield was built in the 1960s and 1970s. There were two
rental projects built in Richfield during the 1980s and none during the 1990s totalling
approximately 180 units. Other than these projects, there has been no other new rental
housing built in Richfield since 1980.
Most of the rental product is older (1960s and 1970s vintage) and lacks features and
amenities desired by today's renters. Market rate rents in Richfield are affordable with one-
bedroom unit rents ranging from $400 per month to $475 per month in a larger rental
complex built during the 1970s. Two-bedroom unit rents range from $500 per month to
$625 per month. According to our survey of rental apartments in the community, the
average vacancy rate overall is two to three percent, less than the 5 percent level
considered acceptable to meet consumer choice and pride for adequate turnover.
Seniors now live in general occupancy market rate rental or subsidized rental housing or
in their own homes. According to the 1990 Census, 80 percent of all Richfield senior
households (65+) own their housing. Although most seniors choose to remain in their
single-family homes, a growing number of active, independent seniors are choosing to sell
their homes and downsize either to a smaller, owned home or to rental housing. The high
percentage of seniors who still own in the study area reflects the limited number of housing
alternatives available to this group.
The following key factors summarize the rental housing market situation in Richfield:
Less than 200 new general occupancy rental housing has been built in Richfield over
the past 20 years:
Existing market rate rental housing is dated, and most properties do not offer newer
features and amenities desired by today's renters;
Shortage of market rate housing for several senior market segments;
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ll1 HOUSING NEEDS. HOUSING POLICY PLAN AND TARGET AREAS
Table XI
Project Housing Needs
Housina Needs
Single Family
Market Rate Rental
General Occupancy
Senior
Total New Units
Number of Units
165
420
2QQ
785
An analysis of the data clearly indicates that there is a need for additional single-family and
multi-family housing development in the City of Richfield. Single-family needs appear to
lie in a wide range from moderate to higher costs. HRA has also found that moderately
priced homes could be made available by increasing the opportunities for senior citizens
and general occupancy to move out of single-family homes and occupy a wider range of
rental housing options. Because the private market has not independently provided rental
housing in sufficient numbers to meet the needs of the citizens, HRA has found that public
intervention is necessary to provide safe and decent housing and to offer housing
opportunities for all citizens, particularly low and moderate income citizens.
Therefore, the HRA and the City of Richfield have embarked upon a process which will
target particular segments of the population. These housing opportunities already include
a comprehensive focus upon upgrading the existing stock of single-family homes through
the Richfield Rediscovered Program and various home improvement informational
sessions.
The next step for the HRA and City will be a focus upon multi-family developments, both
existing and new construction. The development of multi-family housing in the community
is expected to the one of the most efficient means to increasing available housing units,
increasing employment, and improving the health and welfare of its residents while
maintaining the lowest cost and least risk to the taxpayers of the City.
Administration of all HRA programs will be handled by the Executive Director in concert
with City staff and community organizations. All housing assisted by HRA will be
professionally and independently managed and will be subject to HRA review on a annual
or bi-annual basis.
of.,
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IV. MULTI-FAMILY HOUSING PROGRAMS AND FINANCIAL TOOLS
A. Crestwood, Heritage Square East and Hampton Place Apartments
The HRA has been approached by the owners of the Crestwood Apartments (51 units),
Heritage Square East Apartments (150 units) and the Hampton Place Apartments (221
units) regarding the possibility of the HRA assuming the ownership and existing debt of the
422 apartment units (the "Apartments"). The existing debt, non-recourse financing insured
by the Feder~ Housing Administration, on the Apartments totals approximately $6,466,000
or approximately $15,300 per unit. Because the debt is non-recourse, neither the general
obligation nor other revenues of the City are required to provide security for the debt at this
time. The transaction is expected to occur by March 31. 1995. Any closing costs will be
paid for with city equity. The assumption of the existing debt by the HRA will constitute a
housing development project and taxable essential function debt pursuant to Minnesota
Statutes, Section 469.017 and 469.0171.
The HRA and the City reasonably anticipate that the HRA will refund the taxable existing
debt and issue tax-exempt essential function debt undertaken as a housing development
project under Minnesota Statutes. Sections 469.017 and 469.0171. The maximum sources
and uses for the project are as follows:
Sources
Revenue
HRA Equity
$9,450,000
50,000
1lm
Existing Debt
Construction
Reserve
Arch. & Eng.
Other Fees
$6,400,000
2,200,000
500,000
50.000
350.000
TOTAL
$9,500,000
$9,500,000
The HRA does not anticipate the need for application of the state ceiling for private activity
bonds with respect to the housing bonds.
The HRA plans to contract with private management companies for the marketing and daily
administration of the units. The HRA's intent is to market the units to a broad spectrum of
rental residents including single-parent households and handicapped persons. The
management firm hired by the HRA will be expected to have a staff person familiar with the
metropolitan region's social service programs and will be expected to refer apartrrient
residents with special short and long term needs to the appropriate agencies.
Prior to the refinance of the taxable debt. the HRA is planning to ~valuate the feasibility of
converting Crestwood or Heritage Square into a senior housing facility. The conversion
of the units would include substantial capital improvements including amenities needed and
desired by senior residents including common areas for health care providers. meals, and
recreation, housekeeping services. transportation to retail facilities. and handicapped
apartment units.
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B.
General Provisions
The following standards and requirements shall apply with respect to the operation of each
Program described in this Section IV;
1.
The HRA will not arbitrarily reject an application from a
proposed tenant because of race, color, creed. religion,
national origin, sex, marital status, sexual orientation, or status
with regard to public assistance or disability.
2.
All of the housing units in each Program will be occupied or
held for occupancy by low and moderate income persons or
families, as determined by the Authority pursuant to Minnesota
Statutes, Section 469.012, subd. 1(8).
3.
The HRA shall not amend any Program under this Section IV
while Bonds authorized hereby are outstanding. to the
detriment of the holders of such Bonds.
.f
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