Homeownership Work Group February 14, 2018 1/19/2018 1
Agenda: Meeting #2 Welcome & Introductions Discuss draft work group topics and background materials Panel - Statewide Housing Inventory and Needs Panel - Opportunities and Challenges in the Current Market Break Panel - Pathways and Access to Homeownership and Homeownership Disparities Public input Prepare work group update for Task Force meeting #2 Wrap up and Next Steps 2/14/2018 2
Presentation on Statewide Housing Needs & Demands Presenters: Chris Galler - Minnesota Realtors Association Christine Berger Minnesota Realtors Association 2/14/2018 3
Inventory: Needs and Demands Chris Galler, CEO MN REALTORS Christine Berger, VP MN REALTORS
Inventory What do people want? What is available? Why is there a shortage?
What do people want? Millennials (34% of buyers) Live close to amenities Starter home Close to job/friends 3 Bed/2 Bath Baby Boomers (30% of buyers) Live close to amenities Smaller home Closer to job or family 3 Bed/2 Bath Many similarities - but there are differences causing challenges 6 NAR 2017 Homebuyer and Seller Generational Trends Report
Statewide: inventory impacting speed of market place (vise versa) 180000 160000 140000 Statewide: New Listings, Closed Sales and Days on Market (DOM) 2005-2017 120 100 120000 80 100000 80000 60 60000 40 40000 20000 20 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 New Listings Closed Sales DOM 0
Trends in Inventory (state & metro) Statewide - ShowingTime
What is Available? By Price & Type
Inventory: Existing vs New MAAR/NorthstarMLS
Why the shortage? People are staying put longer chicken or the egg Equity Issues Investors People are more cautious Generational housing Regulation/land use issues
Prices & Affordability Supply & Demand
Affordability This index measures housing affordability for the region. For example, an index of 120 means the median household income is 120% of what is necessary to qualify for the medianpriced home under prevailing interest rates. A higher number means greater affordability.
Eliminating Barriers What tips or tricks are buyers using to succeed? Flexible closing dates Writing a letter to the seller Higher offers No inspection No contingencies
Solutions & Ideas Please consider the impacts of federal tax reform on residential real estate Create state tax incentives for homeownership (i.e. property tax relief, moving credit) Consider cost of building code changes; local government regulations on building, buying and selling.
Solutions & Ideas Incentives for builders by local governments for ownership properties Address labor costs/supply of trade workers MN REALTOR Legislation
Questions? Chris Galler, CEO MN REALTORS cgaller@mnrealtor.com Christine Berger, VP Political Affairs MN REALTORS cberger@mnrealtor.com
Panel Market Opportunities and Challenges Panelists: Sarah Wisdorf, Duluth area realtor, Gables & Ivy Real Estate Brian Rossow, Rochester area realtor, Harvey Ratzloff Nene Keke-Matey, Twin Cities area realtor, RNR Realty 2/14/2018 18
Break Time until 2:10 p.m. 2/14/2018 19
Panel Pathways to Homeownership Panelists: Julie Gugin, Minnesota Homeownership Center Kathy Wetzel-Mastel, PRG Jenny Larson, Three Rivers Community Action Cate Rysavy, LSS Maritza Mariani, NeDa 2/14/2018 20
Combining community-based affordable housing development with homeownership education and counseling to help all people and neighborhoods thrive.
Income Is How You Get Out of Poverty, Assets are How You Stay Out Today, African-American and Latino households have less than $1 in assets for every $6 that white households own. Alexandra Bastien, Shelterforce
A Change is Gonna Come -Sam Cooke All race groups have grown recently in MN, but between 2010 and 2015, the state has added four times as many people of Color as non-hispanic White residents. (Data from 2015 Population Estimates, U.S. Census Bureau)
Focus on the affordable housing continuum and moving people along it. https://vimeo.com/255179606
What s the answer?
We know what works, we need to do more of it: Homeownership preparation--prg serves about 750 households a year about 500 of those are households of color of which an estimated 260 annually go on to purchase within 3- years. Inventory Production of entrylevel homes doesn t keep pace with demand because the numbers don t pencil out for this market segment.
Triple production when the residential real estate market is hot by capturing the growth in the mortgage registration and deed taxes.
LSS Financial Counseling Cate Rysavy, Senior Director of Financial Services Lutheran Social Service of Minnesota February 14, 2018
LSS of MN - What We Do Children, Youth and Families Minnesota s children, youth and families have safe, stable homes and the opportunity to thrive in community People with Disabilities Minnesota s people with disabilities have access to services and a full life in community Services for Older Adults Minnesota s older adults have choice in their services and opportunities to contribute to community
LSS Financial Counseling Our mission is to achieve economic stability for all Minnesotans. We believe people can conquer their debt, gain control of their finances, and achieve financial wellness. Our Impact 91% of clients improve their credit score 85% successfully complete debt repayment 59% of student loan borrowers served report payments more affordable
Services Provided Credit & Budget Counseling Debt Management Plans Foreclosure Prevention Student Loan Repayment Counseling Financial Education Financial Wellness Plans for Organizations Reverse Mortgage Counseling Homeownership Counseling 10 locations + 2 campuses in MN, 1 in WI for in-person counseling Nationwide online and phone counseling Multi-lingual services: English, Spanish, and Hmong
Financial wellness - wealth journey We re all in this wealth surplus struggling stable survival
Questions? cate.rysavy@lssmn.org 888-577-2227 ConquerYourDebt.org
Video about NeDA Play video about Neighborhood Development Alliance 34
Potential Topics for Work Group Homeownership Disparities Pathways and Access to Homeownership Maintain Existing Housing Address Local Policies Alternate Forms of Ownership & Expand Housing Options Development Costs & Access to Capital for Developers 2/14/2018 35
Work Group Schedule and Process Homeownership Meeting 1 Homeownership Meeting 2 Homeownership Meeting 3 Homeownership Meeting 4 Homeownership Meeting 5 Homeownership Meeting 6 Discuss Scope and potential topics for work group Discuss Round 1 topics Topic presentations Discuss Round 1 topics Topic presentations Consider potential recommendations Discuss Round 2 topics Topic presentations Discuss Round 2 topics Topic presentations Consider potential recommendations Discuss report and Identify Round 1 and 2 Recommendations for Task Force TF Mtg. 1 TF Mtg. 2 TF Mtg. 3 TF Mtg. 4 TF Mtg. 5 January February March April May June July 2/14/2018 Minnesota Housing mnhousing.gov 36
Background Materials for Meeting 2016 Disparities Report to the Legislature Homeownership Preferences for Minnesotans memo Minnesota Realtors Home Sales Overview Background materials for each meeting are posted on the website with the agenda. 2/14/2018 37
Public Input at Meetings 30-minute comment period at Work Group meetings Please use sign-up sheet if you wish to speak In-person comments taken in order of sign-up Online comments will be read by the moderator 1-3 minute limit for comments, depending on the number of people wishing to speak Questions that can be easily and briefly answered will be addressed in the meeting; longer ones will be followed up on after the meeting 2/14/2018 38
Other Public Input Opportunities Engaging Minnesota Public input opportunities: Call for Ideas Regional Forums Regular items for input on the website Visit www.mnhousingtaskforce.com for more information and sign up for updates 2/14/2018 39
Prepare for Task Force Meeting #2 Each work group will share the scope of their work group and their identified priority topics. Each work group will give a high-level overview of meetings to date provide highlights of the topics addressed ask the Task Force for its input Task Force Meeting #2 Wed. Feb 21 9 am 2 pm Sunrise Bank on Wabash Av 40
Wrap Up Work Group Meeting #3 - March Visit www.mnhousingtaskforce.com for: o past and future meeting information o background studies and materials o public input opportunities o sign-up for updates 2/14/2018 41