City tells neighborhoods it will be tougher on NRP spending

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October 18, 2004 // UPDATED 4:23 pm - April 25, 2007
By: Scott Russell
Scott Russell

The city of Minneapolis plans to take a stronger hand in shaping the next round of Neighborhood Revitalization Program (NRP) housing plans proposed by individual neighborhoods. In a memo sent to all neighborhood groups Sept. 24, Mayor R.T. Rybak and City Council President Paul Ostrow stated that neighborhoods should match the city's own housing goals.

NRP is a 20-year, $300-plus million program that has empowered neighborhood groups to spend money spun off by new city development. By state law, 52.5 percent of NRP spending must be on housing or "housing-related programs," said NRP Executive Director Bob Miller.

The program is in its second 10-year phase; in the first, many neighborhoods spent less than the required 52 percent on housing. The city calculates that, collectively, neighborhoods must spend 70 percent of NRP's remaining $41.7 million on housing to make up for the deficit.

Some critics say that when neighborhoods did spend money on housing, they didn't create enough affordable housing. Some neighborhood leaders respond that stabilizing the middle class was a bigger priority in the early '90s, when NRP started, and they shouldn't be judged in hindsight.

Whoever's right, city leaders say they will be more forceful this time around. Deputy Mayor David Fey said the city has had the authority to review and shape NRP plans but hasn't used it.

"It is not new that the city has that authority," he said. "It is new that they [city leaders] have been explicit about their intention to review plans with city goals in mind."

He called the memo a broad policy statement, saying NRP Phase II dollars spent on housing and any other programs should be consistent with city goals, plans and policies.

Ostrow said he did not want the city review to be "a straightjacket" for neighborhoods, but the city review has to be more than the "pro forma" approval that took place in NRP Phase I.

Neighborhood leaders "can expect there will be more active involvement from the city's Community Planning staff in looking at those plans."

Stepped-up city review of NRP plans has the potential to rekindle control battles between city and neighborhood leaders and ramp up tensions.

NRP's Miller said the governing statute requiring 52.5 percent of spending on housing and housing-related programs is broader than the city's unified housing policy.

The NRP Policy Board -- including neighborhood representatives, and city, county, school and parks officials -- reviews and approves NRP plans. However, the City Council gives final approval.

Said Miller, "We will have an argument at the Policy Board about it -- whether neighborhoods should be forced to comply with that unified housing policy."

The city's unified housing policy is available at www.ci.minneapolis.mn.us/cped/affordable_housing_resolution.asp

It has specific language on the creation of affordable housing, as well as regarding broadening housing options and accommodating the housing needs of all city residents.

Battles for control between neighborhood representatives and city officials have surfaced before. For instance, some NRP Board members thought the city took away too much neighborhood discretion when it pushed for a $1 million NRP public safety set-aside for community policing. Their argument is that the city budget funds public safety but NRP gives neighborhoods discretion about what they'd like to add.

Some neighborhood leaders had no immediate reaction to the Rybak/Ostrow memo, saying they were still digesting the information.

John Van Heel, chair of the Citizens for a Loring Park Community (CLPC), said directing 70 percent of the remaining NRP funding to housing seems steep in light of the smaller Phase II allotments.

"I think it sounds like a lot considering how much less financial support we have," Van Heel said.

Less financial support means many organizations will lose paid staff, he added. Without professional staff, Van Heel is skeptical about an all-volunteer neighborhood group's ability to create more affordable housing options for the community.

Miller is proposing eight different housing funds in which neighborhoods could invest to meet their housing requirement. They are outlined in a Sept. 22 memo and are being sent to neighborhoods for final review and comment.

The eight funds are:

Fund 1: Improve one- to four-unit owner-occupied structures.

Fund 2: Rehabilitate affordable rental property.

Fund 3: Aid poor homeowners to abate hazardous or serious disrepair conditions.

Fund 4: Provide help for low-income people to buy and fix homes in need of significant renovation.

Fund 5: Help first-time homebuyers.

Fund 6: Invest in land-trust-homebuyer-initiated transactions.

Fund 7: Provide resources to the city's Affordable Housing Reserve Fund.

Fund 8: Provide incentives for lot acquisition and redevelopment of blighted properties.

(Sarah McKenzie contributed to this report.)