Good evening and welcome to tonight's Town Talk. I'm city manager Scott Neal. This year we planned a series of town talks around topics important to a dina residences. Tonight we're going to talk about affordable housing. Affordable housing development manager Stephanie Hawkinson will share the city's
affordable housing goals, data about the need for this affordable housing in our community and the city's response to that need. Stephanie will speak for about 30 minutes after her presentation, she will take questions. Uh, we will end tonight's town talk when there are no more questions or at 8 o'clock, whichever is
first. However, you can continue to ask questions and make comments online at bettertogetheratdina.org for the next week. The online conversation closes Wednesday, October 15th. Now I'd like to formally introduce Stephanie Hawkinson.
Stephanie has served as the city's affordable housing development manager for 7 years. She earned a bachelor's degree from Duke University and a master's degree in public and nonprofit management from the University of Minnesota Humphrey Institute and School of Social Work. She brings together, uh, she
brings knowledge of both the developer and the public funding pro procedures, uh, processing to our to our workplace. Stephanie understands all steps of the development process, including feasibility analysis, financial modeling, site selection and acquisition,
pre-development funding, assembling a development team, securing financing and shepherding developments through closing and construction. She excels at project management as well as bringing project partners and stakeholders together to work efficiently and transparently. Her highly
efficient working style and dedication to affordable housing makes Stephanie an integral part of our community development team. Please help me welcome Stephanie Hawkinson
So in addition to that, some of you may be wondering who I am and why it's me that's talking to you today. Well, I'd like to say it's because I spent a fair amount on my junior high school lunchtime at the Arby's on France Avenue where I spent all of my meager
allowance in summer wages at Southdown 50th in France, but it's not that. I began my professional life in housing. Fundamentally, I believe that with stable housing, children
can function better in school. People can main stability in their workplace, and people have better health comes. I believe access to safe and secure housing is fundamental to a safe and secure society, and I
believe there are economic benefits to it as well. If people are stably housed and they can do better in school and their jobs and have better health outcomes. That's better for everybody So I started working at Project for Pride and Living, a
nonprofit in Minneapolis that, um, is an owner and developer of affordable housing. From there I went to work for the city of Saint Paul for 11 years as a housing project manager working with neighborhood groups on
their single family housing projects as well as some apartment developments, but then I decided that I needed to know a different perspective. And so I became a consultant for housing developers, um, primarily working in the Twin Cities to really get the nuts
and bolts of what it takes to be on the development side of things. After 6.5 years of doing that, I really wanted to return to the public sector. This opportunity came up and I was thrilled to be hired as the city's very first affordable
housing development manager. Before I dive in, I want to let you know about a new program that's being launched by the Adina Housing Foundation called the Heroes Program. Excuse me, as I click on
something. These are um this program is for people that work in the city serving this um people of Edina, be they nurses, teachers, police
, whether or not they plow our streets. We want them to have the opportunity to live closer to their jobs where they can where they can live, where they serve. But I'll get more on this later.
Tonight's talk is not intended to be comprehensive. Just some highlights to focus on ownership housing and what the city is doing to make home ownership possible to young households with children starting out and to help seniors who may have
called Idina their home, be able to live in community when they want to downsize from their home . There are 3 pillars or areas that we focus on. and these are to preserve and improve the quality of existing affordable housing while
discouraging displacement of our residents, diversifying the housing stock through targeted redevelopment to provide a variety of ownership and rental housing opportunities at a range of income levels and to strengthen protections for renters to promote housing
stability. The city as a government entity, we tend to get involved where the marketplace does not. That is part of the what is one role of government. And so with market rates
a code and zoning compliance single family homes. We have very little role. but where we come in is where there are gaps in what is being provided in the marketplace. So to lay
the groundwork regardless of why I work on affordable housing. I want to respond to some of the reasons why the city cares about affordable housing. One reason city leaders and staff are interested in
affordable housing is because many residents have been requesting it. Every 2 years, the city engages a research firm to conduct a quality of life survey to measure resident satisfaction with city services.
and to gauge interests on various topics. The survey data is useful. It helps guide our work. It lets us know what you, the residents want from your city. And it lets us know what
concerns you may have. The 2025 EIA Quality Life survey provided residents the opportunity to give us feedback. And what we learned through the survey is that one of the top 4
most serious issues facing the city is the need for more affordable housing. Now for the charts So to be more specific, 74% of respondents said that the city
needed to preserve the remaining stock of smaller starting homes. This is an increase from 66% just two years ago. 37% of the people responded that median density developments such as town homes need to be developed.
Fewer people responded to wanting accessory dwelling units in high density multi-family housing, but that's not really very surprising. As 93% of the residential land use is zoned for single family housing. Those responses make sense.
because that is the type of housing that we have most of. The survey helps the city understand what residents like about the city to learn what residents want. Staff also looks
at data and the data seems to align with what we're hearing in the survey results. Now this is a big slide Housing, what it's saying in some is housing is getting more
expensive The percentage of high-end luxury homes. is increasing and the percentage of lower cost entry level homes is decreasing. Now, if you look at the very top
line that is dark gray. Hopefully it's turning out. Those are homes that are between 30 and $400,000. And the green line at the bottom are homes that are under $300,000. As you can see, especially since 2021,
those numbers have fallen dramatically. Conversely the red line, our homes over a million dollars, and the lighter gray line. and the yellow line, rather, our homes between $700 and a million dollars.
Those numbers are increasing. In 2023, it was estimated that fewer than 16% of the remaining housing of the housing stock was
valued at less than $500,000. Now, please keep in mind the Met council considers affordable ownership, affordable housing to be $306,000. So there's very little that is considered
affordable ownership in the city . Now that is that is based at 300,000 comes from looking at what the income is for a family of 4 at 80% of the area median income.
Another reason why housing of this this level is hard to find. Its research is showing that people are staying in their homes If you, if people, if a home is paid off, if you've bought a home in the 70s, 80s, 90s, and it may be paid off. The
alternatives for moving are slim . For age-restricted senior housing, rents can exceed $3000 a month. And if you have a house that's paid off, moving the options out there are just not favorable to moving, so the
supply of the older homes that may be smaller, they're not, they're also not going up on the market that often. So there's just fewer opportunities for young families starting out and there are a few opportunities for people who want to downsize to a smaller
home. Idani used to be a place where a traditional family of one working adult could afford a home. And this person could be in a typical professional field or a laborer, and they could find a home, a skilled worker, they
could find a home in Edina. And that the opportunities are fading. This is true nationwide, but the , the gap between incomes and housing costs in the city are
wider than we're seeing in other communities. So for the city, there's research out there that for a city to be truly healthy. There needs to be a range of housing types and housing costs to attract families with young children
into attract workers to work in the places of employment. Hm I'm not getting the slight event . OK. As we know, the reduction of low
and moderate priced housing is not just due to inflation, nor is it because there's more demand for housing than there is supply, which dries up the cost. Any Edina, we are also experiencing a physical loss of
my moderate priced homes due to tear-downs and rebuilds. Although this has a positive impact on property taxes collected. It also impacts who can buy a home in this community . In the past 10 years, we've lost over 1000 homes that have been demolished and replaced with
luxury homes. As of mid-September this year. there have been 40 permits pulled for demolitions. In 2023, and the reason the data is a couple years old is because we track the homes that have
been rebuilt after being torn down and it can take 18 months or more to rebuild a home. But in 2023, the average price of a tear down was 600 over $600,000. So not even in the affordable
range. These homes were replaced with homes valued at over $2 million. I don't have all the data, like I said for Senseend because those homes are still under construction. So many residents have expressed
interest in preserving smaller homes but there's only so much the government can do. There are private property laws, so people have a right to sell their home to a developer. People have a right to buy a home and tear it down. And I'm not being
disparaging of that. People build new homes to feed to suit their needs. What I'm saying though that there is an impact on neighborhoods. There is an impact on who then can move into the city. So these purple dots on this map show
where there's concentrations of tear downs and rebuilds. So those neighborhoods where there's high concentration, those neighborhoods have been pretty dramatically transformed from being neighborhoods of smaller, more affordable homes. to become a neighborhoods of
larger, more luxury homes. OK I like this slide but admittedly, a lot of people do not. It's, it's a lot of numbers. So what I'm trying to show here is this is for a family of 4.
And, and these are current Edina residents. 57% of households of four in Edina have incomes less than 120% of the area median income, so a majority of households of
foreign dina have incomes of less than 100%, 20% of area median income. 32% of be dying of families of four have household incomes between 30% and 60% of the area median income. The maximum price of a home that
that group of people can afford. It's $238,000. There just aren't homes valued at that level. So 57% of Edina households of 4 cannot afford a median priced
home of $700,000. The max they could afford is about 490, and this is based on a 30-year mortgage at market interest rates. Why is this important There are currently people in
Ida that call Edina home. Yet it's challenging for them to lay down roots if the housing costs are wildly out of reach. Secondly, with a household size of 4, there's a high probability that they have school-age children. Currently our school system, 20%
of the school children are open enrolled. If we want to attract school-age children to the city. I think we need to look at the cost of housing. This next slide is for seniors.
This is for households of 2 that are, um up to 100% of area median income . So these could be seniors who have raised their families here and want to stay,
or they want to move into the city because their grandchildren live here and they want to be closer to their children and grandchildren. In this category, this group of people. 65% of these seniors have incomes from jobs, Social
security, pensions, cash from dividends that is less than 100% of the area median income. 45% of existing Edina seniors have incomes that qualify them for subsidized rental housing.
downsizing to a smaller affordable house is simply not possible unless they currently have a home with equity that they can use to find another home. Many seniors have opted to move into lower price condominiums, but that is not without challenges with unknown changes in HOA fees.
as with families of four, majority of seniors are getting priced out of the housing market . Many are choosing to remain in their single family houses. They're required when the average incomes in average housing prices were much more aligned. For seniors who want to move out of their homes for social or
health or other reasons, the options are simply limited. In addition to I existing Edina residences not being able to afford to buy a
home, medium priced home, Diana, or having income to rent a market rate apartment. Many of the jobs that are based in Edina pay wages that are less than what is needed to buy or even rent here. This means that many people are traveling into the city each day
for work. Pre-pandemic numbers estimated that 40,000 people traveled into the city each day for work. This means cars on the roads. And let me tell you, staff here about congestion. We hear about
those cars on the roads. So in addition to a housing issue, this is actually a climate issue as well. Many um, many of our Edina employers.
provide essential services. They're nurses and lab techs in our, in our home as personal care attendants. So teaching our children or driving them to school They're police officers. and there are people that, like I mentioned before, repair our roads. They need to show up for
work. regardless of how far they have to drive. Therefore, there's a broad benefit to having housing within the city that is affordable to people that work here. So what are we doing about this
I've told you about the problems is there, what are our responses ? When I was first hired, I was tasked with trying to figure out how to create affordable ownership opportunities. This was a daunting task and
truthfully, I questioned my decision. How were we going to create affordable ownership opportunities in the city. The median housing values 7 years ago were high, and they continued to grow. and much faster rate than
incomes. Yet, in 2021, we created the Affordable Ownership Preservation Program, Building upon our experience of using community development block grant funds to support, um, a community land trust. And so what a community land trust is,
it's a nonprofit. They buy a moderate priced home that still may be out of reach for a lot of these workers and a lot of these families and they separate the ownership of the home from the land. So the nonprofit continues ownership of the land. and they sell the home for a far
reduced price to a homeowner. The home remains affordable for 99 years because of this ground lease that they don't own the land so they can't keep all the equity that is when the homes increase in value , they can only um capture that when they sell the home, a
portion of that increase and this keeps the home continues to be affordable. Well, prior to 2021, we supported it through our block grant allocation from the federal government and it was, we were able to buy
maybe one home a year. for many years, from 2007 to 2021, we could, um, preserve one home a year. But in 2021, the HRA made a
significant investment to proactively seek moderate priced homes and homeowners that want to sell their home. Homeowners who have said that they don't want their home torn down, that they have really fond memories of raising their families in those homes, and they wanted to go to another homeowner. They
don't want, they want someone else to have history in that house. And they also don't want to deal with the staging, you know, and all the things that are needed to sell a home. So we sent out a postcard to every homeowner, um, that had a
home valued up to $425,000 and said we're a third option between staging it and between selling it outright as is to a developer. We will partner with our community land trusts to buy the home have the community land trust
fix it up and then sell. We started out with just partnering with Homes Within Reach, but in more recent years after 2021, we added Twin Cities habitat for Humanity. It made a difference
as you can see from this chart. between 2007 and now we have preserved 36 thus far, more on the way. Modest homes through this program. Just since 2021,
22 of that 36 homes had been preserved through this program. Another thing that we're helping with homeowners is the home rehab program. This allows people to fix up
their homes at very low rates so they can stay in their homes. We had a home rehab program again using our black block grant funds that was, um, administered by the county, but they were, it was very deeply affordable. We wanted to hit a
different bracket of the population that program still exists, but slightly higher income folks where we can lend them money deferred. until they sell their home. The loan is forgiven if the home is sold back to the HRA or one of
our partners. Sunset program started in 2021. 58 homeowners have benefited, have taken out home rehab loans. These homeowners are in 17 of our neighborhoods The priority for this program is code violations and energy
upgrades, but in some cases we have um helped with getting lifts put in their homes so people can remain when they, the stairs are no longer tenable. It's a 2% interest, that simple interest
deferred. 30,000 is a maximum that can be borrowed. Um, it's one, and like I said, it's 100% forgiven if the home is sold to one of our partners. There are income limits and there are home value limits to
this program. Another program that we had that has been suspended now due to lack of funds was the come home to Edina program that was offered through the Adina Housing Foundation. This is a down payment assistance program
that where the second mortgage, if people didn't want to buy a home that was beyond their reach for what they qualified for a first mortgage. We could provide a second mortgage to help them purchase the home. The principal of this mortgage was deferred.
until they sold it or until term . This program has been around since the mid 80s, but it went through a revamping in 2007 and since that time between 2007 and beginning of this year, we
helped 183 households by a home in Edina, with originating almost $9 million. So how this was financed is old mortgages would get paid off and they would finance new mortgages and so it's a revolving program that was self-sustaining.
But what has happened is there's been a far greater increase because as I mentioned, the gap between housing prices and incomes is growing, so more and more people became reliant on these type of programs to be able to buy a home. And so, and more people are staying in their
home, so there's not this recycling of funds. So we have temporarily suspended the program, um, opening it again when there's been $2 million or so repaid in old mortgages. Reason for that amount is once we open the
program there's usually a lot of interest and it takes a while to find a home. And so we don't want someone to become reliant on it, that this is how they think they're going to find a home in the city and then find out that funds have run out again. So this program was used to help people buy condos, town homes,
single family homes. There are income limits again, and there are price caps on the cost of the home. And the um people you would lend up to 25% of the
value of the home at a cap of $90,000. A lot of people took advantage of this. We had teacher's aides, we have a police officer, at least one. We have uh chef in a local restaurant. We have daycare workers. We have people that
work for the county, all sorts of folks have benefited from this program. so challenge to these programs. is scarcity financial resources.
The Affordable ownership Preservation program in the home rehab program. Those are fun, um are funded out of our affordable housing trust fund. These are funds that developers pay in when they're building an apartment, a market rate apartment, and they choose to
not include affordable units within those market rate apartments. They pay the city a fee. We use that fee. It's put in the Affordable Housing Trust Fund, and that is what financed the housing preservation program in the home rehab program and a few other programs.
None of these programs were financed through the tax levy. This was all through the Affordable Housing Trust Fund that was paid with these buy-in funds from developers. We also have a program we get money from the state called LAha
Loffordable housing aid and that's based in a formula. It's a sales tax. um. that has been added in the last couple years. And then based on a formula throughout the state. we get an allocation. So in 2024
, we received a little over $300,000 in 2025 we're receiving a little over $8,875,000. Another source of funding that is there's no more coming into it is the pooled funds from the Southdale 2 TIF district. Now
the district is closed. That is no longer a TIF district, but there is old pooling funds that per state legislation, the funds must be used for affordable housing
right? I talked in the beginning about a hero's program. This new programs to preserve existing moderately priced homes and provide home down payment assistance programs similar to the come home to Dina program
for hometown heroes. These are folks that work in the fire department, they work in the police department, that work in the schools that work in the health care industry that work in the city. There are income limits and there are home value limits, but this is up to
$100,000 of down payment assistance to allow these people who have to show up for work, be able to live closer to their job. We hope to roll out this program in November. I'm already getting calls from people that are interested, a few nurses, a few people that have worked in the high school
that have found out about this program and they're already getting geared up to participate . As I said, $100,000 up to 25% of the home value, not to exceed
$100,000 25% of a household income has to go to the first mortgage costs. It's deferred until term or sale. It's can be shared appreciation or interest only. The maximum home price is $600,000. There like I said, there's income limits. This will be all online. And the major
thing is you have, you have to work any dina in one of these industries As a municipal employee, as a healthcare professional, as a teacher educator and in those fields generally. So that's me for tonight. I
think I went over my time. I apologize, but we have some call-in numbers. If you have any questions for me. OK, thank you, thank you, Stephanie, for that informative and thoughtful presentation. Stephanie will now stand for
questions. If you have a question, call 312-535-81 10 with the access code
26347061036 and password 5454. There's no uh attendee ID number , press 3 on your telephone keypad when you're ready to ask a question, uh, communications director Jennifer Benneot will mute your line and place you in the queue until it's your turn to speak. Do we have any questions tonight
We don't have anyone on the line , but we do have a member of the audience who'd like to ask a question. Really good. We don't usually have a a live studio audience, so this is a treat. That, oh, there it is uh Stephanie, oh, there it is uh Stephanie you mentioned oh, there it is uh Stephanie, that that's really loved, uh, that,
uh, 40,000 workers travel into Edina. Is that people working here or traveling through here? or both The data we have is that those traveling into the city in order to reach their jobs in the city. So there are people that live outside of Edina who work inside
Edina. I didn't realize there were 40,000 workers in Edina 30,000 jobs. OK. Um and the Erie median income, the 30% when you calculate that, is, is that 30% pre-tax or or after income tax and stuff.
That is gross income. That's gross income, OK, that's what I thought. And then I've just one suggestion on one of the charts, you showed the how the percentage of various price homes were changing over time, uh, early on.
that one. that's not adjusted for inflation, is it? No, that is not. This comes from our assessing department, OK, because I mean it would be helpful to get a real truer picture if it were adjusted either by average area median
income over time. um, or consumer price index or something to see because obviously there's gonna just gonna be obviously just inflation, even if housing prices were keeping up, they just put the lower price ones would just drop off the market anyway. I agree. I think what's telling
about this slide is how the different lines are changing. Um , that the top line took a deep dive below the other lines where for. if everything were adjusted purely. you know, kept on track, it'd all go up at pretty much the same rate, but yeah, I hear what
you're saying, but I think that I think that overly dramatizes the thing because you're not adjusting for house for for the for income, uh, it's not just affordability, it's just the price of the house. It's still, I still, still a serious problem , but it's just not quite
adjusting as much. Thank you High tariffs and high interest rates from the Fed make this a very difficult issue to solve from the demand and the supply side. Why is right now a time to
focus on affordable housing. I think we should always focus on affordable housing. Um, it's truthfully, but now is a time people are struggling, um, for with
meeting their housing needs and truthfully it's a lot more expensive if you, it, it's higher up in the hierarchy of needs and it's a lot more expensive dealing with housing the unhoused, dealing with um
emergency medical room care, dealing with educational issues when there's lack of stability, so kids are moving around to different schools. Those ultimately have much higher costs in the long run than figuring out hous ing costs and um permanent sheltering costs now.
Um, in your slides, you also mentioned that 20% of AIA students are open enrolled. Why is that an issue that Adina is looking to solve through affordable housing. One of the reasons what we're seeing is that households of 4,
as I said, 57%, actually more than 57%, cannot afford a median priced home in Edina. So it's presumed that those are households, that there's household of 4, that there's children and that the household.
If housing costs are so high and if young families cannot afford a home in the city because they're they're starting out in their career. They're just younger their incomes have not grown to a high level, then
they're not feeding those kids into the school district early, so one way to help build up a school population is creating housing that young families can move into so they can raise their kids in the community starting
at kindergarten, have them go up through the system, um, because that's a lot of times how schools track like who starts a kindergarten, who's going to be maturate to the next grade level and keep those classrooms full starting at a younger age.
And just one more question. How are Adina's mortgage rate buyback programs, adjusting for the increase in interest rates. I don't know if I have a good answer to that because the the
they don't necessarily in the sense that housing costs adjust to the interest rates. When interest rates are really low, sellers tend to be able to sell their homes for a higher amount because people can borrow what they can borrow. They and that has to include principal
interest insurance. and taxes. And, um, and so that they calculate what the what the amount of house they can buy using all those variables. And so if interest rates are high, that means the principal, the
amount of the house has to shrink. And so the market sometimes does that fluctuation where housing prices go down when interest rates are high, so our programs don't necessarily deal with that. We, um, because
it happens on the other end. And what issue do you think is more effective to target the amount of affordable housing that's available in a diner by expanding building projects, or preserving current single-family homes. There's only so much we have
control over So existing single family homes, the people that live in them, they can choose who they want to sell to. It would be more effective for us to be able to buy those, but people may not want to
sell them to us because the materials to build those homes. cost more than what we'd be able to pay today. And so it would be more effective to be able to preserve all the smaller homes, but people need not want to sell to us. People may want to buy one of those homes and tear it
down. They may not want to, you know, the developer may come to them first and offer them cash on hand so it may be more effective to sell that way, but if we have land, we could choose to build homes, but it still
would be a little bit more expensive. Good question, though. Thank you Anyone else in the room have a question? All right, let me check those phone lines. I have no callers online. OK.
Yes. Uh, it's actually a follow on to the other young lady's question, uh, about uh students filling up the schools and I don't know if you can speak for the school district, but I remember hearing , we cannot speak. OK, so my understanding was one of the, one of the reasons for, uh, that
, that. it having students living in, in the city is because state aid is for to schools is tied to enrollment and if they don't have, if the schools aren't filled, they don't get enough money to
operate their buildings and I don't know if you can comment on that or not. I, I don't think we can comment on, on the school aid formula. I, I don't know enough about it to comment on it , but I can tell you this, uh, we can, we can consult and confer with the school district on a very regular basis with
regards to housing kind of questions. They, they're they're just as maybe more interested in in the kind of housing that, that is being built and more importantly, almost where it's being built. So we, we talk about that with them when we have new projects coming in, we share that
information with them, uh, they, they are in a mode where they'd like to see more, uh, more kids in Adina and more kids in Adina school. So we, we know that's, that's something they're interested in, and we talk about it quite a bit. OK.
Anybody else tonight Well thank you. That's all, that's all we've got for tonight , uh, as a reminder, you can continue to ask questions and make comments about affordable housing online at our Better Together with Dina.org site for
the next week. The online conversation closes on Wednesday , October 15th. Our next town talk will be Tuesday, November 25th, about the development of Fred Richards Park, and we have one more planned for later this year on Adina liquor operations. If you have ideas for Tom talks in 2026, please
let me or one of the, uh, any member of the city's communications, uh, department, uh, know what your ideas are, and we thank you, Stephanie, for spending, spending some time here tonight and uh on this very important topic and thank you to our audience. Thanks