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Mtnnes0ta HOUS]N Partnershlo Inside this issue: G Notes from the Executive Director 2003 Legislative Wrap-Up Meet the new MHFA Commisioner Greater Minnesota ProJect Spotlight .......................... ; ......... i... ..... 7 Regional Network ReporLs OIP III Awards MHP Funding Awards ........................................... 10 MHP Programs, Funders, and Staff Directory HousingMinnesota Update VISTA Update ..... ,.... .... ,...,,......,.. .......... ..,17 Research Round Up Upcoming Events The Minnesota Housing Partnership helps nonprofiLs and rural communities create, preserve, 'and promote affordable housing, The Bullet keeps developers and advocates ,informed of affordable housing issues and activities in Minnesota, The Bullet Summer 2003 The Importance of Housing Preservation Waverly Community Homes, a 16-unit affordable development once threatened by market rate conversion, was preserved by the Central Minnesota Housing Partnership in 2002. By Luke Avery To solve Minnesotats affordable housing crisis, multiple strategies will need to be considered. The preservation of existing housing units is a critical part of the solution, but one that is often overshadowed by the construction of new housing and other more visible strategies. Affordable housing is being built each year in Minnesota, but the state§ population is growing even more rapidly, and the construction of new units still consistently lags demand. In Greater Minnesota alone, it is estimated the number of affordable housing units needed each year exceeds the number of units prOduced by 3,500 to 4000 (Greater Minnesota Housin§ Fund, 1999). This production deficit is a problem by itself, but it also makes preserving the affordability of the housing units already on the market absolutely essential. The housing units most at risk of losing their affordability are those with federal rental subsidies. Starting in the late 1960s, many affordable housing developments were financed with special Iow- interest mortgages offered by HUD, MHFA, and the U.S. Department of Agriculture§ Rural Rental Housing program. The subsidies supporting these mortgages, which include Section 8 from HUD, require the owners to keep the rents affordable for at least 20 years. After this period has passed, the owners have the option of prepaying the mortgages and raising rents to market rates. Minnesota has approximately 50,000 housing units with this kind of federal rental assistance. According to Julie LaSota of the Minnesota Housing Finance Agency (MHFA), preservation efforts in Minnesota have fared well, with a limited number of owners opting out of their subsidized mortgages. One of the reasons for the state~ preservation record is the success of MHFALs Preservation Affordable Rental Investment Fund (PARIF) program. Starting in 1998, the PARIF program has provided funding to cover debt restructuring, building rehabilitation, or ownership transfer for subsidized housing developments, keeping the units affordable. The program has helped preserve 69 developments durin9 the five years it has been operating, including a total of 6,069 affordable units. The demand for PARIF funding is higher than the program can cover by itself, but MHFA also has other resources available. Agency www.mhponline.org