According to this article in the Star Tribune, the governor elect has chosen Susan Haigh of St. Paul, a former Ramsey County commissioner and head of Twin Cities Habitat for Humanity, to lead the MetCouncil beginning in 2011.
From the article:
Haigh, of St. Paul, served 10 years as a Ramsey County commissioner, supporting the creation of a fund to promote construction of affordable rental housing. She left that position in 2005 to take over Twin Cities Habitat for Humanity, which helps build homes for low-income families.
In appointing Haigh, Dayton signaled that housing would be a high priority for the council, which has given its greatest emphasis in recent years to building regional transit but also has responsibility for planning low and moderate income housing, parks and wastewater treatment.
While Haigh’s background is one of noble heritage, one has to wonder just how useful the MetCouncil will be with the economy and housing market the way they currently are. According to those with more knowledge of the market than a governor-elect and his political appointee, the market probably has not yet hit bottom and it’s likely that even more foreclosures are on the horizon besting even the rise seen in mid-2010 locally.
Following research done on Dakota County’s Real Estate Inquiry pages and Zillow it is clear that there are plenty of affordable houses all over the South Metro especially in the high density housing which was heavily pushed by the MetCouncil in the years leading up to the housing market crash. According to Dakota County my house has lost nearly $16,000 in value between 2009 and 2010 and Zillow is now pegging my valuation at about $124,000 ($6,000 less than the county). With similar homes in my neighborhood currently on the market for under $100,000 and several under $80,000 some may seriously question the direction the MetCouncil seems to be pointed.
What do you think about Dayton’s appointment of Haigh to the head of the MetCouncil? Are you surprised at the new direction the group will be headed? Do you believe we need more affordable housing in the Twin Cities? How about your own home’s value. Has it gone down more or less than you expected and with the valuation provided by Zillow are you concerned that if the market slides any further that you may be upside down on your mortgage even if you have serious equity invested? Whatever you have to say about Dayton’s appointment of Haigh to the MetCouncil go ahead and comment on as I’d love to hear your thoughts.
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December 30th, 2010 at 8:18 am
It’s an interesting choice, to say the least. Creating affordable housing is near the bottom of the list of things I’d like to see the Met Council accomplish. I’d rather see a greater emphasis on transit and governmental consolidation strategies, something she doesn’t have on her resume. Hopefully she’ll surprise me and turn out to be a major transit supporter.
December 30th, 2010 at 8:28 am
Yeah, it’s a strange thing to be focusing on right now. Homes are more affordable at present than they’ve been in a very long time, due to the market being so weak, and my understanding is that rents are generally down too (I could rent my old apartment now for less than I paid for it eight years ago). I think people not having jobs with which to pay for said housing is a much bigger problem. I also think transit is going to remain an issue too, and that it’s a better area of focus for a metro-wide agency than housing, which is much more of a city-level issue.
As for my own home’s value, it’s not good. I bought in spring of 2005 and the values in my neighborhood peaked about six months after that. They held steady for a while, but eventually started going down, and the decline accelerated in 2009 and 2010. I doubt I could get six figures for it nowadays, considering what neighborhood asking prices are like.
December 30th, 2010 at 9:22 am
The first question to ask is what do they define “affordable housing” to be? My guess is that it is completely different than what you and I might define it as. Likely it is tied to the #’s that the County, State, and Federal government use for various benefits.
For example, if you want to increase the number of Section 8 vouchers you can give out, without increasing the amount of money for the program, the best way is to cut the cost of each voucher. Have the rent rates drop, and bam, you just found a way to supply more Section 8 vouchers.
December 30th, 2010 at 10:26 am
The concept of a regional council to help balance and direct issues that affect the region is a good one. In practice it is not so easy to produce results originally intended. not to mention it has been a political football kicked to both sides of the spectrum as new members are named by the respective head of state.
i guess i will wait and see, but to be honest this is a group that cannot really win… if they concentrate on transit issues they just piss people off as well. My guess is that affordable housing is a much less costly endeavour than big transit plans and possibly reflects the reality of state budgets and revenues in the next few years more than anything.
i know a bit about Sec. 8 as i have a family member who is disabled. its a double edged sword, and the problem generally is , as usual, location, location, location.
December 30th, 2010 at 12:07 pm
Transportation and Job Creation would be much higher on my list, but nobody asked me.
December 30th, 2010 at 12:11 pm
Well, they did ask “you” but unfortunately “we” voted for the bigger moron of the two completely worthless assholes running.
December 30th, 2010 at 12:55 pm
As one of those low-wage earners, I think your idea of “affordable” might be different from mine. REALLY different. Sigh.
I’m concerned for home owners. There was a time when people bought a home and property for life. Now, it’s an investment. I’m no economist, but when a house is bought and resold, and the price continues to rise, sooner or later there’s got to be a ceiling. Prices plummet and home owners are left still owing the bank for a huge mortgage. This IS how it goes, right?
I don’t think this system can work any more than pure capitalism can. There has to be checks and balances. I don’t know, maybe it starts with local governments keeping the taxes low. And the property values down. Maybe people have to stop looking at their homes like the goose sitting on a golden egg. Maybe we need lots more AFFORDABLE apartments, and people buy a house when they can really afford to pay for one, instead of it being their due.
I was just saying last night that since Eagan is determined to have the property on 13, maybe they ought to build affordable apartments for the retail workers at Mall of America. Something streamlined, built inexpensively but not cheaply. There’s already a bus line there, and more than enough room for a small low-end shopping area.
I’m thinking that if rent were actually within the means of a person earning minimum wage, there wouldn’t be so many Section 8′s. Maybe somebody who has headed Habitat for Humanity could figure out how to get it done.
December 30th, 2010 at 12:57 pm
My mortgage is less than most people’s rent (it’s about $740/month). If you are telling me that’s not affordable then I don’t know what to tell you.
December 30th, 2010 at 1:30 pm
Bill, you summed up my thoughts on the Govenors race quite nicely. How on earth Emmer got the nomination is beyond me. They managed to nominate the ONLY person in the state who would have lost to Dayton.
A person who is actually living on min wage cant afford $740 a month for housing. However they probably also cant afford a computer, a fancy cell phone, internet, cable, etc. And they are probably working multiple jobs etc. Not sure if I have a point, only that building more cheap housing to enable more people to survive on less money is probably not doing anything to help people get above the poverty line.
Also, there seems to be a ton of rental property close to MOA. I am not sure there is a real need to build more.
December 30th, 2010 at 1:40 pm
A single person living on minimum wage can’t afford $740 a month for housing; however if two people live on minimum wage and lived together then $740 should be more than reasonable. It is the failure of people to budget wisely live within ones means that is the problem.
December 30th, 2010 at 1:47 pm
Here is Dakota County prices went down again in 2010 and they will probably go down a bit more in 2011. Right now we are 15-20% below the 2005/2006 peak and are selling at values last seen in 2001/2002. That’s actually a pretty good way to quickly value your home.
The reality on bank owned homes is even worse. Personally, I’m buying a townhouse in Apple Valley as an investment. It sold for $165k in 2006. I will close in less than 2 weeks for $61k (needs $4k of work). Good for me but not so good for all the others that bought in the area.
Bill – the one thing I’d caution you on is the use of Zillow. Go check out Zillow’s own data on how accurate they are with values in the Twin Cities – http://www.zillow.com/howto/DataCoverageZestimateAccuracy.htm
Basically, they admit they are MORE than 10% off of true market values an astounding 57% of the time. That’s a pretty huge statistical error. For the seller of a $200k house that means they are more likely than not to estimate higher than $220k or lower than $180k. If a homeowner believes those numbers they are either going to not sell their home (by pricing it too high) or leave a ton of money on the table by pricing it too low.
December 30th, 2010 at 1:53 pm
Also remember that the mortgage, if you own a home, is only part of the true cost of housing. You also have to factor in taxes, maintenance and repairs, possibly dues for being in an HOA, etc.
There’s more than enough housing stock available in the Twin Cities right now, between all of the empty apartments, condos, and houses. If affordable housing really is an issue, then focus on getting people living in those first before building more units and distorting the market further. It could also help reduce foreclosures too as homeowners, landlords, etc. could have more people to rent out to.
December 30th, 2010 at 5:42 pm
I’ll throw it out there since folks seem stuck on affordable housing, just because the price is low doesn’t mean you can find anyone to loan you money at a reasonable rate to buy it.
December 30th, 2010 at 11:05 pm
Bill, a person making minimum wage in Minnesota makes $984.00 a month. (approximately) Federal guidelines suggest that housing costs should make up one-third a person’s income. If you DO have two people sharing a payment, I agree, there’s more leeway. Unfortunately, there’s lots of people out there with one income.
I’m just saying, there has to be housing for the people who pour your coffee and stock your shelves, and they shouldn’t have to be on a bus for an hour to do it.
December 31st, 2010 at 12:30 am
You seriously believe that people earning minimum wage should be able to own a home? We’re clearly differ in ideology by so much that a discussion about this appears pointless.
December 31st, 2010 at 12:36 am
No, as I said earlier, they should be able to RENT affordably. I don’t think owning a home should be the American dream. I don’t think that people who can’t afford to pay for a home should buy one — NOR should they feel they need to. I have ACTUALLY heard people imply that people who have kids and don’t own a home, are bad parents. Tell that to EUROPE!
So, we’re on the same page here, Bill. But I do want to say, with all the talk about restaurants on this blog, we have to ask ourselves, where do the people who serve us, LIVE?
December 31st, 2010 at 12:42 pm
Michelle – it seems to me that there are plenty of places for them to live right now.
A decent guideline is no more than 1/3 of your income toward rent. Someone making minimum wage working full-time can afford $400/mo (which is less than 1/3 of their pay). Searching craigslist shows lots of 2 bedroom apartments renting for $800 or less so you get a roommate and you’re good.
December 31st, 2010 at 1:46 pm
What really sucks for us….I bought a townhouse in Eagan, that I could afford, when I a was single, with just my salary. Well who knew that a year later I would meet the love of my life, and get married.
We were LUCKLY enough to sell her smaller condo in St. Paul and come out a few thousand ahead (she put down quite a bit, that is now a wash).
So now we still live in my affordable home in Eagan, which is fine…expect…we are starting a family…and it’s WAY to small for us let alone with kids (I will have to get pointers from Bill & Kim).
Me and my wife are just your early 30′s couple who make decent money…but now we have SAVE to get out of my townhouse which is WAY underwater, then also save to put money down on a new place. I guess we should be happy we have a place to live at all…right?
I will never see a program to help us who pay A LOT in taxes, bills on time, no debt. We will have to do it right and save, or learn to live in a small space.
And no…I really don’t want to rent out my place just have it destroyed. I put a lot of money into it to make it the way we wanted it. I really would rather dump it for a loss then worry about having to gut it when my tenants moved out.
My sister lives in “decent” appt building in Eagan for 600.00 a month. It’s actually not that bad. Would I live there…no…but…it’s what she can afford. You talk to people who are looking for appt. on goverment assitance, I mention where she lives…and they are are like OMG NO??? That is what I say WTF too.
December 31st, 2010 at 1:50 pm
We’re suffering where we are for now. My goal is 5 more years. We’ll see if the market allows a change at that point.
December 31st, 2010 at 10:12 pm
And if you have kids, Bill? What then?
December 31st, 2010 at 10:15 pm
Huh? I have one.
December 31st, 2010 at 11:43 pm
Maybe she meant if you have another one? lol.
Bill he is really cute btw.
January 1st, 2011 at 9:49 pm
My youngest is trying to talk us into moving into Minneapolis to be closer to them. I say, “I can’t stand people, why would I want to live with half a million of them? I like the green.”
You should move to Uptown, he says, and mentions a stoner friend who has a one room place there. Omigod, I have to go to Uptown next week, and I’m dreading it. It’s like Target quadrupled.
I’m just very grateful that I don’t have to worry about kids anymore. It’s a tough time to raise a family.
January 1st, 2011 at 10:05 pm
Bill, I think she means if you’re a minimum wage-earner with a kid, how can you get a two-bedroom apartment for around 800, because you would be less likely to have, or be able to get, a roommate.
January 24th, 2011 at 9:12 pm
(via TheDeets.com): http://www.mplsrealtor.com/downloads/market/RREAR/RREAR_2010.pdf
The relevant part comes on page 11 which shows the Median Sales Price, Average Sales Price, Percent of Original List Price Received, Average Total Square Footage, Average Price Per Square Foot, Months Supply of Inventory.
The stats for the suburbian areas of Dakota County are dismal and put my estimates of my house value pretty close to spot on. At $96/sq ft being average and my house being ~1275 sq. ft., we’re looking at $122,000 valuation. Ugh.
February 10th, 2011 at 7:36 am
And the slide continues: http://feeds.bizjournals.com/~r/bizj_twincities/~3/mVSbAkFEnr0/report-more-mortgages-under-water.html
February 10th, 2011 at 8:48 am
The best thing you can do right now is stop looking at it. The picture isn’t going to get any prettier for quite some time.
March 8th, 2011 at 7:15 pm
From: http://feeds.bizjournals.com/~r/bizj_twincities/~3/GgW-9fPNZ1Q/17-percent-of-msp-homes-underwater.html
March 18th, 2011 at 7:02 am
[...] members of the public questioning the Met Council’s shift towards affordable housing, the discussion of spending time and money on a new color-coded transit system, and even the late [...]
March 29th, 2011 at 10:22 am
http://feeds.bizjournals.com/~r/bizj_twincities/~3/lVqR3eqiNxk/twin-cities-lead-us-in-home-price-drop.html
May 9th, 2011 at 9:39 pm
http://feedproxy.google.com/~r/CalculatedRisk/~3/CChmkyeJknE/zillow-on-negative-equity-284-of-all.html
According to Zillow 28.4% of homes in the USA are underwater. They provide data from the top metro areas. MSP shows that 46.2% are underwater.
Wow.
May 12th, 2011 at 2:10 am
Wow, is right. Wow! Looping back to the original topic, rents are up. That’s gonna hurt some people, as unemployment remains high, even in Minnesota, which compares well with the national employment rate.
October 24th, 2011 at 10:25 am
From: http://money.cnn.com/2011/10/24/real_estate/housing_refinance/index.htm
October 24th, 2011 at 3:41 pm
somehow, that seems like a bad idea. The house is still not worth the amount of the mortgage, but they’ll write you a new loan that just makes it easier for you to pay it. The bank eats some interest, yet the still get to pretend the property is worth some value that it simply is not.