Like the legendary phoenix rising from the ashes of the Great Recession and the foreclosure crisis of 2008, the housing market is showing good signs of regeneration. The Minnesota Housing Financing Agency and the U.S. Department of Housing and Urban Development are credited for rejuvenating the housing market through a foreclosure recovery investment program that was generated from 2008-2014. The investment program here, under the auspices of the City of Minneapolis’ Community Planning and Economic Development and Residential & Real Estate Development Work Unit, was initiated to rescue not only the economy, but in the process, rescue the hopes and dreams of many families with a vision to attain their own share of the American Dream.
In Minneapolis the essential component of the housing rescue was subsidized financing. The investment comprised of improvement loans costing $15 million given to 1,620 families; down payment assistance to 710 homeowners that totaled $7 million; 477 vacant properties were rescued for revitalization which totaled $16 million; and 266 home seekers were given first time mortgage financing so that they could achieve the dream of home ownership. In addition, 429 new housing units were constructed costing $34 million. These investments were crucial in revitalizing the Minneapolis housing market.
While the expenditure for the recovery investment program may seem staggering the cost was important because it rescued the housing market from the brink of disaster. It was an investment for the future. Rather than tear them down, the homes were rescued and renovated which breathed new life into them where families could create new memories to last a lifetime. It was money well spent because it saved the city from the blight of abandoned vacant homes — neighborhoods were restored and families found homes.
At the peak of the foreclosure crisis, North Minneapolis was particularly devastated, where over 50 percent of the City’s foreclosures occurred. The City recently unveiled the results from the Housing Investment Analysis: 2008-2014 that was conducted by Support Corporation and Corporate FACTS for the City of Minneapolis. The analysis found that over 700 families were given a shot at the American dream of home ownership and 400 affordable housing units were created. The encouraging report also found that 40 percent who received down payment support and 60 percent who purchased subsidized homes were by people of color, helping to bridge the racial disparity gap.
Josh Boak reported in the July 21, 2015 Star Tribune that a surge in home sales rose 1.1 percent from the previous month. The Strib also disclosed the surge was the most positive sign of regeneration that we’d had regarding home sales since February 2007. Another indication that the housing crisis has been abated — first time homeowners, 33 percent strong, represented a good chunk of the June home sales. And now the price of homes is up 4.8 percent from a year ago and the average price for a home is an impressive $247,700.
The efforts by Minneapolis and their partners to stabilize and revitalize the housing market that nearly fell off the cliff of economic ruin in 2008 is a great accomplishment. The City invested not only in the future of the economy and the housing market but also in the aspirations of families. That is the miracle of the housing revival.