urbanMSP

Here's some more background info.

In response to changing local market conditions, the development team has since revised its development plan to a more modest-scale, 143-unit multifamily ownership housing project, targeting a unit mix of 50% market-rate / 50% affordable at 60-70% AMI.

AECOM has requested an extension of its development rights until June 30, 2021, to more fully develop its financial model and architectural plans and get financing commitments for this modified project approach.

Given the significant changes to the project plans and the need to assemble financing from multiple sources for the affordable housing component, staff recommends a six-month extension of AECOM's exclusive development rights through June 30, 2021, coupled with an option, if needed, for the CPED Director to administratively extend through December 31, 2021. This extension should give AECOM sufficient time to complete necessary due diligence and secure preliminary financing commitments for the revised project.

Should be interesting to see what they come back with.

I really hope they are able to somehow keep the design of the building. While the additional affordable housing will be a great, losing a building that would stand apart for the rest of Washington vs bending in would be disappointing.

Affordable condos in the Mill District will be fantastic.

Affordable condos in the Mill District will be fantastic.

This isn't "affordable" so much as "income-limited." The way a land trust works is that they artificially lower the price, roughly by the cost of the land the unit sits on, or 20% of market price. The trust owns the land. The unit owner owns the unit. (Note: I'm not sure if the trust maintains any control over what the owner can or can't do with the property). The owner and trust split any gains or losses in equity when the owner sells. The catch-22 is that most people who are actually loan qualified and looking for homes make too much money to qualify for ownership, which is limited to something like 80% of the area median income for the entire family. (So, for example, a 2-income home where both earners make even *$50k* would make too much money to qualify.) The vast majority of people who DO income-qualify for ownership aren't in a financial position to buy, don't know what a land trust is, and it's not even on their radar.

I'm not saying it's a bad idea-- it's a great idea. But it literally requires recruiting buyers. And then selling them on the idea of sharing equity with a land trust that they have probably never heard of.

Truly affordable modern condos with 2 or more beds, costing between $200k and $350k, with reasonable HOA dues and no frills... are a truly rare housing segment. And this would not address that need.

Agree with everything Aaron said. The key factors to determining whether this is a good project worthy of public subsidy will be:

1. How much public subsidy is required per unit? If it's a lot (and it will be), could that money be better spent on building affordable rentals and/or other housing supports? (A: most likely yes)
2. Are buyers restricted in how much appreciation/equity they are able to gain over the course of ownership? If no, then it's a huge one-time subsidy/windfall to only the initial buyer of each unit. If yes, then what's the point exactly, vs. building affordable rentals instead?

It's a nice sounding idea that attracts some political support (because in concept, it sounds like a panacea), but in reality can wind up largely being a one-time subsidy to a small group of beneficiaries (for example, low-to-moderate income but higher-savings individuals...e.g. retirees downsizing from a SFH)

It seems to defy common sense subsidizing housing in one of the most expensive parts of town. Your dollar could go so much further in less expensive areas, but alas social engineering always wins out over logic.

It is an expensive part of town due to “social engineering”. Can’t think any housing that isn’t social engineering anymore.

It seems to defy common sense subsidizing housing in one of the most expensive parts of town. Your dollar could go so much further in less expensive areas, but alas social engineering always wins out over logic.

I mean, putting aside the pros and cons of any specific project, what you describe as "social engineering" seems to be what most people might call "desegregation."

Isn't this very similar to the Pillsbury artist lofts situation across the river (and probably elsewhere)? I remember looking at the income limit vs rent scenario a few years back and wondering who exactly this subsidized housing was meant for.

It is a creative way to try and build ownership in the city beyond just houses. I'm not sure how well it will work long term with association fees and such but I don't see an issue with trying it out. I do get the idea that building this in one of the most expensive parts of the city might not be the best bang for the buck but if it also results in more of this type of development (vs just affordable housing units) all over the city it could be worth it.

I'm totally not sold on this, and I tend to agree that it's probably more complicated than it needs to be, but there's probably value to somebody building equity in situation like this that they could then roll over into their next housing purchase. That equity value over five years could be not-insignificant, even if the owners had to split the share of the property's appreciation.

Shaved down for the changed market.

https://www.startribune.com/l-a-develop ... 600037221/

It's a shame to lose out on that fabulous building they initially proposed but this development definitely serves a good purpose.That part of Washington Avenue is such a huge barrier (both physical and mental) between the Mill District and Downtown East, and this infill would make it feel (marginally) more inviting to pedestrians. Also good that they're sneaking in some affordable units in before this area becomes Minneapolis' gold coast.

The teal is fun. Hope that makes it through the to the final project.

Reduction of underground parking seems like a plus. Far more units as well. The parking ratio must have gone way, way down. Honestly, not a bad outcome even though the previous proposal had more architectural creativity.

Man, what a downgrade in terms of looks. I don't have a lot of hope that this doesn't end up looking cheap as hell.

Well, it would be in good company with 602 & 720 Washington.

AECOM presented an update to the DMNA tonight. They didn't share the packet, but it's back up to 15 stories, with a restaurant on the Chicago corner and two-story townhome units along the rest of the Washington and 9th frontages. They're still going to have 30% of units affordable via the City of Lakes Land Trust. The packet has been submitted to the CoW for the February 25th meeting, and apparently their financing doesn't require pre-sales, so they're intending to break ground this summer. Fingers crossed!

The original look was cooler, but I think this project has gotten much practically better on paper with time. Fingers crossed, indeed.