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HPP Proposal Selected in Idea Competition
05.27.2014 - HPP

How can we reduce the cost of producing affordable rental housing?  That is the driving force behind the MN Challenge, an idea competition, sponsored by Minnesota Housing, the McKnight Foundation, Urban Land Institute Minnesota, the Regional Council of Mayors, and Enterprise Community Partners.   In January 2014, ideas were solicited, and in March three proposals were selected for the next round of the competition.  Each of the three proposals was provided up to $10,000 to develop their idea further.  In June one of the proposals will be selected, and the team will be provided up to $70,000 to implement their proposal.

One of the three proposals selected in the first phase was a proposal submitted by HPP together with the Center for Urban and Regional Affairs at the University of Minnesota (Professor Ed Goetz).   The HPP-CURA idea is based upon the significant impact local government practices can have on the cost of producing affordable rental housing in their communities.   Local government cost drivers which can increase costs include reducing the size and density of projects, requiring additional design aspects, steering developers to more difficult sites, not allowing innovative building techniques, requiring more challenging mixed income developments, employing time consuming approval processes, and others.  Local governments, on the other hand, also employ practices which can reduce costs, including reducing regulatory barriers and fees, acquiring and holding land, providing TIF and tax abatements, and using expedited review processes.  Under our proposal we plan to review practices by a number of cities, focusing on those with the largest affordable housing production goals, both to identify practices that could be improved and good practices which need to be adopted more widely.  This project would work hand in hand with the Met Council's development of the Regional Housing Policy Plan, which will provide a system to create the incentives for local governments to put into place the most effective cost reduction practices we can identify.

Regardless of whether the proposal wins the competition, HPP hopes to pursue this project further, as it is consistent with one of HPP's goals—finding ways to stretch our existing affordable resources further to produce more units.