MINNEAPOLIS, MN - As foreclosures loom and real estate prices fall across the Twin Cities, the nonprofit group Habitat for Humanity is making the best of the situation by buying up land and vacant houses at bargain prices. "It's a sad situation, this market, but we can't lose sight of the opportunity within it," said Sue Haigh, president of Twin Cities Habitat for Humanity.
Habitat has been buying property within stalled developments in cities it otherwise couldn't afford, such as Chaska, Ramsey or Woodbury. The group, whose mission is affordable home ownership, is also buying four vacant houses in St. Paul this month. The work reflects what other Habitat chapters are doing around the country, said Stephen Seidel, Habitat International's director of field operations.
At the peak of the real estate boom about three years ago, lots in a Chaska development called Clover Field cost more than $60,000 apiece. In the past year, Habitat bought lots there for $45,000 and $50,000. In Hopkins, the organization is buying two more traditional single-family lots from the city for $75,000 each, down from the list price of $89,000.
The nonprofit and others like it are attempting to lock up as many lots as they can at the lower prices before the market rebounds, and the state is helping. In November, the Minnesota Housing Finance Agency awarded Habitat a $1.4 million grant to purchase 28 to 35 parcels of land in Carver and Scott counties.
In most cases, Habitat won't build on a parcel until owning it for more than a year. The purchases are part of a new approach it and the state call strategic land acquisition. When the market does turn around, we'll already have in place land for affordable housing, which in growing suburban communities is so difficult to get," said Tim Marx, state Housing Finance commissioner.
The finance agency recently accepted applications for its next round of grants, and Habitat is just one of a number of applicants seeking funding for that purpose, he said. Others include local affordable housing enterprises such as Chaska Community Land Trust, which makes home-ownership affordable by selling the house but keeping the land.
Although it still works in the core cities, since 2007 Habitat has striven to build 75 percent of its houses in the suburbs, where schools are good, the job market's growing and affordable housing is often needed. Though Habitat tends to build new housing, it also operates rehabilitation and repair programs and will likely fix up, rather than raze and rebuild, vacant houses that are in good shape.
Source: Star Tribune