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Memo Hopkins Community Image Awards , '. ... -....-. .' C I T Y o F HOP KIN S '''''; MEMORANDUM Date: September 10, 1992 To: Honorable Mayor and City Council From: Kersten Elverum, Housing Subject: 1992 Hopkins Community .ImageAwar s Five nominations for the first annual Hopkins Community Image Awards (HCIA) were received and judged by the HCIA Review Committee. The Committee recommended all five properties for awards; they are as follows: Commercial/Industrial/Office o McGuire and Sons Plumbing and Heating 605 12th Avenue South . MUlti-family Residential o Ramsgate Apartments 421 VanBuren Ave. North Sinqle-familvResidential o Ross and Jo Bartz 10 East st. Albans Road o Sandi WeesjMike Deutsch 325 14th Ave. North o Vida McQueen Percy and David J. Percy 325 19th Ave. North Attached are the nominations for these properties. Along with the plaques that they will receive at the Council Meeting, the award recipients will have a tree planted on public property in their honor. -& ' , , , , ,; ., ill." - , .~~ r , -, - 1992 CITY OF HOPKINS HOUSING ANALYSIS REPORT Page I. INTRODUCTION 2 - 3 A. Background 2 B. purpose Statement 2 C. Methodology 2 D. Executive Summary 3 II. ANALYSIS OF HOUSING STOCK 4 - 8 A.Housing Inventory 4 - 6 B. Demographics 7 - 8 III. HOUSING TRENDS 9 - 11 A. Housing Behavior of the Different 9 , Age Groups B. population projections By Age Group 10 C. population projections' Effect on Housing Markets 10 -:- 11 IV. HOUSING PROGRAMS 12 - 17 A. Housing Programs Administered by 12 - 13 city of Hopkins/HRA B. Housing Programs Available in Hopkins 13 - 15 C. Other Housing Program options 15 - 1.7 V. MAJOR HOUSING ISSUES 18 VI. RECOMMENDATIONS 19 - 22 .:~~ .. T , /' ~ .......... . ," I. INTRODUCTION . ,- I BACKGROUND I , In May of 1990, the Division of Planning and Economic Development prepared the city of Hopkins Housing Analysis. This report focused on the current housing issues in Hopkins based on the available data at the time and made several recommendations for future action. . Two years have passed since the preparation of this report and a number of factors have changed. The city hired a full-time Housing Coordinator, new housing programs have been offered in Hopkins and the 1990 census data has begun to be available. In light of these changes and the constant need to re- evaluate the.current housing situation, the city Council and the Community Development Department have set a goal of establishing a strategic plan to maintain and up-grade housing and neighborhood vitality. It is in response to , this goal that the following report was prepared. I PURPOSE STATEMENT. I The purpose of this report is to identify and evaluate the major housing issues of the city of Hopkins and formalize a strategy to ensure the long term viability' of the city's housing stock and to provide for new housing opportunities for current and future residents. I METHODOLOGY I The following resources were used to obtain the information contained in this report: o 1980/1990 Census Data o Herinepin County Census Analysis Center o city of Hopkins Assessment Dept. Records o Looking Ahead at Housing- Metropolitan Council o citvof Hopkins Comprehensive Plan - BRW, 1989 .~ o city of Hopkins HousinqAnalysis - May 1990 page 2 ,; . r 'I . " ,. ';Z -, - ,. ~ . .... I EXECUTIVE SUMMARY I An analysis of the available ~990 census data and past housing reports indicates that the following are the major housing issues for the City of Hopkins: . o Less demand for rental units and starter homes o Hopkins housing stock is aging o Decline of the Westbrooke Area o Hopkins has a very high concentration of multi-family housing units . o Image of the city has an affect on the real estate market o Affordability of housing is a growing problem o Hopkins has several single-family homes which are dilapidated and should be removed The City currently offers an extensive variety of programs to address many of these issues. Additionally, various housing programs are available to Hopkins residents through , other public and non-profit agencies such as ,MHFA which " should be promoted by the city. Many new housing initiatives are also discussed as part of the report. However; many ,of these programs are not being proposed to be undertaken' because of staff and financial limitations of the city. staff is recommending that funding for such programs continue to be sought from outside sources. Based on the major housing issues and the current programs available, staff has made 19 recommendations. Many of the recommendations deal with continuing to offer the programs the city has in place. Others; such as working towards the development of a landlord coalition, identifying properties for acquisition, sponsoring a home improvement show, and investigating the possibility of selling the 20th Avenue Townhomes to the residents are new activities. All the recommendations contained in this report a~e aimed at preserving Hopkins' housing stock and providing safe, affordable housing for the city's residents . page 3 - ? -, .-~ \:::.. ".L.~ ' II. ANALYSIS OF HOUSING STOCK - I HOUSING INVENTORY J TYPES OF DWELLINGS AVAILABLE Single Family Homes 2,620 (30%) starter Homes <$90,000 1,518 Move Up Homes >$90,000 1,102 Duplexes and Triplexes 522 ( 6%) Apartments 4,168 (47%) Condominiums 1,017 ( 12%) Townhouses 376 ( 4%) Mobile Homes 100 (1%) total 8,803 Mobile Homes (1.0%) Condominiums (12.0%) Single Family Homes (30.0%) . Duplexes and Triplexes (6.0%) Apartments (47.0%) Observations: * Hopkins has a much lower percentage of single-family homes than the average for Hennepin County (30% in Hopkins compared to and average of 55% in Hennepin County). * Hopkins has a much higher percentage of mUlti-family units than the rest of Hennepin county (69% in Hopkins compared to 44% in Hennepin County.) . page 4 -- , /\ "Z ~: ~jC, ,~. ;". MEDIAN VALUE OF OWNER-OCCUPIED UNITS FOR SELECT CITIES City 1990 1980 % Change Minnetonka.................$121,000......$ 82,100 ~ +47 New Hope................... $ 92,500...... $ 70,000 +32 st. Louis 'Park.............$ 87,100..... .$' 61,600 +41 Hopkins....................$ 86,700......$ 64,600 +34 Brooklyn Center....~.......$ 79,4DO......$ 59,20Q +34 Robbinsdale............ .....$ 76,500......$ 56,500 +35 Hennepin county............$ 91,000......$ 63,600 +43 Observations: I * The median value of owner-occup:Led housing units in Hopkins showed less than average increase in value when compared to Hennepin County as a whole. However, the percent of increase (34%) was consistent with other inner- ring suburbs. . VALUE OF OWNER-OCCUPIED UNITS FOR SELECT CITIES CITY/# OF UNITS Hopkins Robbinsdale st. Louis Pk Mtka VALUE: (2,804) (4,386) (12,469) (14,319) LESS THAN $50.000 2% 2% 1% 0% $50,000- $99.999 69% 86% 73% 29% $100,000- $149.999 15% 10% 18% 41% $150,000- $199.999 6% 1% 5% 15% $200,000- $299.999 5% 0% 2% '9% MORE THAN, $300.000 2% 0% 1% 5% . page 5 . . t ./' ~ ,', "j::.; Average Rent 3/91 . 1 Bedroom $466.00 $ 467.64 .2 Bedroom $ 559.66 . $ 575.26 3 Bedroom $ 816.43 . .$ * Average rents average for Hennepin . ---.. , "i:: ,- I ~< * Hopkins has fewer than rest of Hennepin County. 29 year olds (reflective of Adult 2's, Middle Agers and * Hopkins has a higher Older Seniors than average. * Because the age categories in the from those used in the 1990 census exact ",.". t> ..-- . ~." , - 1990 ...., - AGE/SEX PYRAMIDS --- HOPKINS RICHFIELD* 90 90 . 90 90 80 80 80 80 70 70 70 70 60 60 60 60 A so so A so so g ..0 40 g 40 40 e e 30 30 30 30 20 20 20 20 10 10 10 10 0 0 1.0 0.5 0,0 0.5 1,0 I ~ 1.0 0.5 0,0 0,5 1.0 1.5 .. Percentage of Population Percentage of Population ... * Richfield was used as a comparison due to its similarity to the County as a whole in terms of age distribution HOUSEHOLD CHARACTERISTICS FOR SELECT CITIES Family Households Single Households Hopkins 3,827 4;146 48% 52% st. Louis Park 56% 44% Robbinsdale 65% 35% New Hope 66% 34% Minnetonka 71% 29% Brooklyn Center 73% 27% Hennepin Co. 61% 39% Observations: * Hopkins has the lowest percentage of family households and the highest percentage of single person households. This is a reflection of the high percentage of . rental units. page 8 . <,- ~f> III. HOUSING TRENDS II' 'I' HOUSING BEHAVIOR OF THE DIFFERENT AGE GROUPS Youth (0 -19): This group is generally students living with theirparent(s). Adult 1 (20-24): Generally this group has left home for either college or their first job. Housing is typically close to school or job site. Many will seek housing together to reduce costs. Adult 2 (25-34): This group represents the typical first time home buyer. They have established themselves and are self- supporting. If financially able, they purchase a home. If not, they may rent or live with parents. . Middle Age (35-49): This group has accumulated equity in their homes and may move up to a larger home or one with more amenities. Empty Nester (50-64): Generally this group has finished or will be finishing their child rearing responsibilities. They tend to either stay in their current housing or buy something more suitable to their new lifestyle. Young Senior (65-74): Generally this group uses a variety of housing options depending on their health, finances and lifestyle. Older senior (75+): This group will use a variety of housing options, but often needs services along with the housing. . ',.. -- source: Met Council, Looking Ahead At Housinq, 1988 ~ page 9 . . -. " , J.. -. POPULATION PROJECTIONS BY AGE GROUP - TWIN CITIES METROPOLITAN AREA Age Group 1990 2000 % Change . Young Renter 172,000 148,000 -14.0 -,- 1st-time home buyer 425,000 333,000 -21.6 Move-up Buyer 491,000 601,000 +22.4 Empty Nester 269,000 365,000 +32.3 Young Senior 130,000 134,000 +0.03 . Older Senior 101,000 122,000 +20.8 POPULATION PROJECTIONS' EFFECTS ON HOUSING MARKETS , Based on the above stated projections, the effects on the various housing markets are believed to be as follows: Rental Market o The projected decrease in the renter age group will result in a lower demand for rental housing and may cause lower rents. Lower rents and/or higher vacancy rates will result in lower cash flow for building owners. Building maintenance may suffer as a result. o Increases in the older population group (over 75 years old) as well as single~parent families with lower incomes will create a demand for lower-cost rental units and a greater demand for services. First-time Home buyer Market o The typical first-time homebuyers, the Adult2's, are expected to decrease by more than 92,000 between 1990 and the year 2000. This decrease could cause housing prices to fall based on supply and demand. t, page 10 ~ ~ J'~- 0.'/ ~ - , Move-up Market , o Continued increases in the Middle Age group will likely result in continued demand for move-up housing. However, the significant decrease in the pool of first-time homebuyers will likely cause problems for those trying to sell ,their homes to move up. o Finding it difficult to sell, this group may find it necessary to remodel and stay in their homes. Young Seniors Market o This group tends to use a variety of housing options such as, existing single-family homes, condominiums and rental. Between 1990 and 2000, this group will only grow by three percent. Older Seniors Market o The older seniors, over 75 years old, will'grow significantly between 1990 and 2000, increasing by " more than 21,000. This group, whether it stays in a single-family home or moves to a housing unit for elderly ,people, typically demands services, such as personal care, home maintenance and transportation. o A significant percentage of this population has very low incomes. " ' . " page 11 '. \~ -;j- ~ IV. HOUSING PROGRAMS . ' , . HOUSING PROGRAMS ADMINISTERED BY. THE CITY OF HOPKINS/HRA. Residential'Rehabilitation Loan/Grant Program o Loans and grants for the correction of code violations, handicap accessibility,and weatherization improvements. o Loans are at 3% interest over a12 year period; income limits of $38,600 for household of four. o Grants are forgiven after 6 years; income limit of $25,500 for household of four o Homeowners must have equity equal to loan/grant o Funded with CDBG and revolving loan funds o Currently staff is administering 13 rehabilitation projects under this program First~time Home Buyer Loan ,Program o Low interest (7.15%) mortgage loan program for individuals or families with an adjusted yearly . income of $40,800 or less o Must be a first~time home buyer o Maximum purchase price of $85,000 o Funded through proceeds from the sale of tax exempt bonds; offered through Minnesota Housing Finance ,Agency. o First offered June 1991 Hopkins HRA Subsidized Publio Housing Proqram o 76 Elderly/Handicapped housing units at Dow Towers o 10 Townhomes located at 20th Ave.. South o Rent based on ability to pay seotion 8 Rental Assistanoe Proqram o certificates and Vouchers for rental assistance; currently over 105 in Hopkins o Administered through Metro HRA by the City o 20% increase in program over last year speoial Needs Housing Program o Grant throughMHFA to rehabilitate property at 106 11th Avenue South for transitional housing . o Meets current housing need while allowing for future redevelopment of site page 12 .- ! '\' '. "'-:" -, ,._~:,,-, ..""'~"'" ", . Truth In Housinq o New ordinance effective 8/1/92;' requires disclosure of code violations prior to sale o properties inspected by outside ... evaluators o.Certain h~zardous items must be corrected before new owner can occupy property Rental Property Inspection Proqram o Rental properties must be registered with City yearly o Multi-family units are inspected yearly to assure compliance with Housing Code Housinq Revenue Bond o city sells, bonds on behalf of developer o Percentage of project need to be available to low income households o only eligible for large mUlti-family housing projects . o Allows lower interest rate for new construction o Examples of projects include: st. Therese - $15 million chapel View - $5 million . Hopkins community Imaqe Awards / o Recognizes property owners who have made a significant improvement to their property or who continue to maintain their property in an exceptional manner. I HOUSING PROGRAMS AVAILABLE IN HOPKINS I MHFA Home Energv Loan Program o Loans to homeowners to complete energy saving improvements o Interest rate of 8.875%; no income QUidelines o Maximum loan of $5,000 for 60 months MHFA Fix-Up Fund o Loans to make general improvements o Interest rate varies with income o Maximum Income of $38,000/year o Maximp" - --- 'Jf$15,OOO for 15 years '. page 13 /^, "i- , . MHFA Deferred Loan o Basic and necessary repairs eligible o Maximum income of $8,500 o 0% interest deferred loan; forgiven after 10 years o Maximum loan of $9,000 MHFA Revolvinq Loan Program o Basic and necessary repairs eligible o Maximum income of $15,000 o 3% iriterest installment loan o Maximum loan of $9,000 for 15 years MHFA Accessibilitv Loan Program o Funds used for accessibility improvements only o Maximum income of $15,000 o 0% interest deferred loan; forgiven after 5 years o Maximum loan of $10,000 MHFA Low Income Housinq Tax Credit o Reduces federal income tax liability of qualifying rental property owners for .up to ten years . o Owners must agree to rent to low and moderate income tenants MHFA Rental Rehab Loan Program o Installment loan for rehab of rental property o Maximum loan of $8,000/unit;$40,000/bldg o 7.45% interest for a maximum of 15 years o Most tenants must be low and moderate income MHFA Apartment Renovation Mortqaqe Proqram o Interest rate write-down on 1st mortgage o mortgage funds for purchase or refinancing of existing five+ unit rental buildings o Rent limits based on Section 8 limits; 75% of tenants must be low income o 9.75% interest rate over 30 year term o Minimum loan of $100,000; maximum of $2,000,000 MHFA Apartment Renovation Incentive Loan Program o 0% interest; 30 year deferred subordinated loan o Matching loan on 3 to 1 basis o Rent limits based on Section 8 limits o Maximum of $2,500 per unit . page 14 ,7 . 0 Community Enerqv Services proqram o Sponsored by NSP and Minnegasco o Provides free energy. check ups, workshops, saving materials and low interest loans Metro o Sponsored by Churches o serves low-income seniors painting their home 0 0 There are available . Sojourner needs. I . Scattered -"',,-; 0 0 0 Sale of HRA Townhomes to Residents 0 0 It -- ~ .' t . 0 grant from HUD to study feasibility of 0 0 Senior 0 0 0 Home Maintenance o Encourage homeowners o Work with Inspection Tool 0 0 . Rehab/Purchase o Taxable Home .Rehab Loan Program Combined 0 0 0 . page 16 r" ~ 't '.' . HOME Investment Partnershiti Proqram o Hennepin County will rece~ve entitlement funds through HOME Program to be awarded on a competitive basis to eligible cities and non-profits o Priority activities for the funds areas .follows: + moderate rehabilitation for very low-income homeowners + rehabilitation/acquisition for homeless families and individuals + rehabilitation/acquisition for persons with special needs + new construction or rehabilitation for very low-income small or large families I . . page 17 ~ ....... - . V.MAJORHOUSINGISSUES Based on analysis of the 1990 census, past housing studies and reports, and the City of Hopkins Comprehensive Plan the following have been identified as tqe major housing issues facing Hopkins:,' Less demand for'rental units and starter homes. Hopkins. housing stock is l'argely comprised of multifamily and entry level housing. These types of 'housing units are usually occupied by young adults, 19-29 years of age. This group ,is expected to decrease substantially during the 1990's. BODkins housinq stock i~ aqing. Currently over '50% of the housing stock is 20 years old or older, more than 30%, is over 30 years old. These 'structures have an increased need for maintenance and updating. Decline of Westbrooke Area. ,The WestbrookePatio Home and condominium'neighborhoods'areexperiencing a substantial need for rehabilitation and declining property values. This neighborhood represents 16% of the City's housing stock. HODkins has a very high concentration of multi-family housing ,units. Approximately 60% of Hopkins housing ,units are multi-family units, as compared to an average of,30% " throughout Hennepin County. This disproportionate amount' of, rental housing leaves the City vulnerable,in,a weak rental market., ' , , . Image of the City has an 'effect on the real estate market. The overall image of the City by residents is an important factor property values. .' ., ' ,- -, , VI. RECOMMENDATIONS The following are staff's recommendations based on the identified housing issues. While the majority of the recommendations are to continue to offer current programs, there are also some new initiatives being recommended. It is important to realize, however, that while there are many worthwhile programs that could be proposed, limited personnel and financial resources put constraints on how many programs can be offered. Issue: Less demand for rental units and starter homes. Effect: with less demand, rental units will have to be either priced competitively or offer desirable amenities. Since most rental units in Hopkins were built in the 1970's, many lack newer features. ,As a result, they will most likely have to be priced competitively, which will allow less money for maintenance and upgrading. Decreased demand for starter homes will be reflected in lower property values. -. Recommended Actions: -- Rental Properties: Encourage the use of existing rental rehabilitation programs available through MHFA. Participate in joi~t,mailings/advertising with MHFA to promote programs. continue to investigate possible sources of funds for local rental rehab loan program. Educate Hennepin County and MHFA of the need in Hopkins for new or expanded rental rehab programs. Determine interest for a landlord coalition or landlord workshops. The springsted study recommended organizing a landlord coalition for the .Westbrooke area property managers. ,Other property managers may also be interested in developing a group which would meet to discuss topics of interest. Continue to inspect rental units and enforce the housing code. consider the possibility of strengthening the rental inspection program. It page 19 . . .1. ^,- .- Single-family Properties: continue to offer first-time bome buyer loan funds tbrouqb MHFA. Offer Home Buyer's Seminars in conjunction witb a local lender. Both recommendations help to keep the single-family housing market strong by generating interest in purchasing a home in Hopkins. Issue: Hopkins housing stock is aging. Effect: Without proper maintenance, the aging housing stock will experienc~ depreciated values and will have a blighting influence on the city. Updated features are also needed for the properties to be competitive with newer housing. Recommended Actions: Continue to offer the Residential Rebabilitation Loan/Grant proqram and promote this proqram ..... extensively. -- '~. Promote tbe use of other available rehabilitation proqrams throuqh MHFA and other aqencies. Evaluate Truth-In-Housinq proqram after one year. Evaluate the benefit of adopting stronqer housinq maintenance codes. organize a home remodelinq show which would encouraqe homeowners to make improvements, to their property. Issue: Decline of the Westbrooke Area. Effect: Declining property ,values due to market conditions and the need for rehabilitation have a variety of effects on the City including a reduced tax, base, blighting effects on the City, and an increased need for services due to inadequate screening of tenants. . page 20 . . (\ / '.i*,:,,-t L' '~.' Recommended Action: Implement the recommendations outlined in the Springsted, Inc. study according to the work plan. Initiate discussions with FHA, MERF,' and lenders with a substantial interest in the area in order to identify roles these organizations may play in the revitalization of the Westbrooke neighborhood. Issue: Hopkins has a very high concentration of multi- family housing units. Effect: The disproportionately high concentration of multi- family units means that in a poor rental market the effect onth~ City is much greater than on surrounding cities. Additionally, renters are typically more transitional which may effect their degree of involvement with the city. Recommended Action: FOllow,ing the strategic planning process, the ~. Planning and zoning Commission should review the current Land Use Plan to confirm that parcels -' currently zoned for ,multi~family are appropriately , zoned. '" ~ :''>:....................'''.......................--.. \.:~....,,-."" ~'-- '.'---'""--._r Issue: Im~gE3L,of, the City has an effect on the real estate mar:Ket. Effect: If the image ,of Hopkins is positive, the housing market will be less affected by decreasing numbers of first-t{mehomebuyers and renters. People will continue to look for housing in Hopkins due to its location and', services. Recommended Action: Continue to implement the recommendations outlined in the city's Co~prehensive Plan and the strategic Plan for Economic Development including such items as improving the 'image of co. Road 3, developing a marketing and public relations plan, continue to work to bolster the image of,theDowntown, to continue to promote the local festivals, developing an information center in Hopkins, maintaining "e ,adequate buffer zones between new commercial , , " page 21 - - - --- , <~ " ~ . . ,;......;'.. . . ..~ , . , ' ~. development and residential properties, continue city's onqoinq effort to maintain and improve all public infrastructure, etc... Issue: Affordability of housing is a growing problem. Effect: When renters must pay oyer 30% of their income for housing they are unable to save for downpayment and closing costs on the purchase of a home, pay for education, etc.. . Recommended Action: continue to locally administer the seotion 8 Rental Assistanoe proqram. Investiqateways to allow publio housinqresidents to become homeowners. The HRA has received a $100,000 HOPE 1 grant to study the possibility of . selling the 20th Aven~e Townhomes to the residents. This would allow for new construction of pUblic housing to replace those units lost. ~.~- Issue: Hopkins has several 'single-family homes which ~re .~ dilapidated and should be removed. Effect: The deteriorated or obsolete properties have a blighting effect on the neighborhoods they are located ,in. Demolition of the structures and the redevelopment of the sites would have a poaitive effect 'on surrounding properties. Recommended Action: Identify those properties which should be demolished and determime proper approaoh to take in order to remove them. Aqressively enforoe the Nuisanoe Abatement .ordinance/HousingCode in reqard to dilapidated housinq units. Require the owner of the property to incur the cost of demolition of the unsafe structure. tJI page 22 " ~, ,- ,!If PROCLAMATION WHEREAS, We the People did ordain and establish a Constitution for the United states of America to secure the blessings of liberty for ourselves and .j"C" our posterity; and WHEREAS it is important that all citizens fully understand the provisions, principles and meaning of the Constitution so they can support, preserve and defend it against encroachment; and WHEREAS, The President and the Congress of the United states have designated September 17 as CITIZENSHIP DAY and the week of September 17 - 23 as . CONSTITUTION WEEK; and ~'" ; WHEREAS, the people of the city of Hopkins do enjoy the blessings of liberty, the guarantees of the Bill of Rights, equal protection of the law under the Constitution, and the freedoms derived from it; NOW THEREFORE, I, Nelson W.Berg,as Mayor of the city of Hopkins do hereby proclaim September 17 and Citizenship Day and the week of September 17 -23 as Constitution Week, and invite every citizen and institution to join in the national commemoration. In witness whereof, I have hereunto set my hand and caused the seal of this city to be affixed. Nelson W. Berg, Mayor Date ~a:\ ,'''-