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Let's stir affordable housing into the St. Paul development mix

Opinion piece by Russ Stark published in the August 25, 2010 Pioneer Press

One of St. Paul’s greatest assets is the fact that people of all incomes and backgrounds live together in our great city.  The recently announced slate of development projects that Mayor Coleman has proposed contains a number of good, sensible projects that will put the trades back to work, create new jobs, build new housing, and make needed improvements to infrastructure.  Yet lost in the debate so far is the City’s role in supporting the creation of affordable housing units in St. Paul.

The public resources that the Mayor proposes using, made available by a combination of federal and state stimulus legislation, total about $15 million.  No interest loans and grants to help local businesses like Cossetta’s and J&J Distributing finance major expansions that will create jobs is good economic development policy.  Yes, there is some risk that these projects will not succeed, but this is exactly the kind of risk that the City should occasionally take – on local businesses with track records of success in creating jobs.

The Lofts at Farmer’s Market and Penfield developments will similarly bring jobs and people to downtown.  Both projects will add to the vitality of the downtown St. Paul community, making it a more attractive place to live and work.  In addition, most of the union jobs at the new Lund’s will pay a living wage.  The presence of the grocery store should also attract other development, both housing and jobs, to downtown over time.

What’s unique about these two projects, however, is that they are proposed to be city-owned, with both deals being dependent on public agencies (HUD and the City of St. Paul in the form of the Housing and Redevelopment Authority) backing the bonds; and both projects will include significant numbers of new market-rate apartments.  Heavy public sector participation in the development of market rate apartments raises questions about the City’s role in the creation of new housing, and about the best use of $15 million in one-time, flexible development funds. 

As a neighborhood, downtown has a higher proportion of subsidized, affordable rental housing than any neighborhood in the City, and it is clear that adding more market rate units downtown will add to the diversity of incomes and the overall vitality of downtown.  Therefore building new market-rate housing units downtown does have public benefits. 

But the implicit message behind subsidizing these two market rate projects to the tune of $8.3 million (and possibly more if things don’t go well) is that market rate units downtown are a higher priority than creating affordable units elsewhere in the city.   

The overwhelming majority of housing projects in St. Paul that have benefitted from city financing in the past decade have included affordable units.  Why?  Because there has been a general understanding that one of the public benefits of publicly financed housing is for some of those units to be affordable to low and moderate income households.

In addition to needing good paying jobs, many struggling residents of our community also need housing that will be affordable to them for many years to come.  Affordable housing is a critical stabilizing factor for lower income households, and especially so for kids. 

Some of our new housing units should be affordable to those new employees at our great newLund’s store.  If we intend to use a big chunk of that $15 million on new housing units, as the Mayor proposes to do, then we should follow our historic trend and use a portion of the funds to create new affordable units. 

Yet most of the projects on the Mayor’s list will not move forward without the infusion of these new resources.  Using part of the $15 million for affordable housing would mean getting fewer projects done.  Instead, I propose that my colleagues on the Council and the Mayor work with me to ensure that a substantial portion of the next available flexible development dollars that we have go into a recently created affordable housing trust fund.

We must ensure that an appropriate proportion of new housing units in the City, and along the Central Corridor in particular, are affordable for lower income households.  By doing so, people across the income spectrum will share in the benefits of the improved access to jobs, services, and stores that our great new transit line will provide.

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