Which of our neighbors needs affordable housing in the Cloquet area and is it really a problem?
It could be the single mom who works full time and sits at the next desk. Maybe it’s the guy sitting next to you in your college class. Or it could be someone who’s actually homeless. They could be hidden in plain sight living near the river or in an isolated parking lot in a van or set up in a local campground.
It’s not always easy to tell who is having a hard time making ends meet, deciding to pay the rent and skimping on groceries. They could be taking your order, greeting customers, cleaning hotel rooms or dealing cards, you never know.
“As long as they are not creating any problems, they are not visible,” said Debra Shaff, executive director of the Cloquet/Carlton Housing and Redevelopment Authority (HRA).
The lack of affordable housing is a huge part of the problem.
It’s also an issue that public officials have been focusing on in recent years, after incomes dropped in the recession and rents continued to rise due to high demand across the Northland. In addition, a 2014 Cloquet/Scanlon housing study revealed a need for 500 new housing units through 2025, with 260 of those rental housing, although the study did not break down needs by specific income factors.
Still, proposed solutions are beginning to appear, including one from the Cloquet/Carlton HRA, which is planning to build a new apartment building on the same property as the Aspen Arms Retirement and Assisted Living Facility on 14th Street.
While the 45-year-old Aspen Arms was built to accommodate senior citizens, the new building would target mainly working families who meet the income qualifications.
The three-story, 35-unit building would contain one-, two- and three-bedroom units with laundry facilities in each unit, a fitness center, common area and a playground for the children. The plan also includes underground parking and wheelchair accessibility. Shaff said the color and style of the neutral-colored building would be designed to fit in with the surrounding homes in the neighborhood, down to the pitch of the roof.
Two units would be universal housing geared towards seniors and seven units would specifically accommodate people with some type of mental illness who may need supportive housing.
“This isn't new people coming into the neighborhood, they already live here,” Shaff said, noting that background checks would be done on every applicant before they are accepted. “We just want to provide them with more housing opportunities, we do not expect to draw people from outside the area.”
After sending out requests for proposals, three companies responded and the HRA hired The Commonwealth Companies in March as the developer. The budget for the building is projected at $5.7 million.
The HRA is looking for Low Income Housing Tax Credits and the MN Housing Finance Agency Workforce as well as the Federal Reserve Bank to fund the project. The applications for the state funding just came out and are due by June 16. There are about 130 applicants competing for the same money from the state.
“It’s not a given,” Shaff said.
They expect to hear back on the funding applications in October. If successful, site preparation should begin around May 2017 and the HRA could be ready to accept applications for rent in the late fall of 2017.
Another proposal that’s gotten attention in the Pine Journal in recent months is Sherman Associates’ plan to transform the existing middle school into 70 affordable apartments. Like the proposed HRA apartment building, they should hear whether state and federal funds have been approved for the project in October.
In addition, One Roof Community Housing has been working in Cloquet for several years, purchasing and rehabbing a number of single-family homes which they sell to income-qualified families at a loss — and with specific contract conditions that ensure they can’t flip the updated and energy-efficient homes for a large profit. Homeowners get an affordable home that doesn’t need a lot of money to fix up, plus the utility bills are affordable because the home is now energy efficient. One Roof targets low- to moderate-income homebuyers, earning 80 percent or less of the area median income. In Cloquet, that amounts to $49,200 for a family of four.
Decreasing income levels is also part of the problem.
Since 2000, the median income for renters has declined by 17 percent in Carlton County, according to a 2015 Minnesota Housing Partnership report. Meanwhile, the median rent here increased by 30 percent during the same period.
The largest disparity for median income comes with the under-25 age group at $11,785 in 2011, down from $19,485 in 2000. Compare that to the overall median income for all households at $46,505 in 2011 in the Cloquet/Scanlon area.
“These people are working full-time jobs,” Shaff said. “There is a real issue with wages in Carlton County, but not just Carlton County, and the rents are not in proportion.”
Black Bear Casino Resort employees have been impacted by the lack of affordable housing the most, according to the housing study.
The biggest concern for Black Bear employees, according to Fond du Lac Band of Lake Superior Chippewa Human Resource Director Don Weisen, is the high cost of rental housing apartments and houses alike. Workers who want to relocate to the Cloquet area find that there is not affordable housing because many positions at the casino start at $8 to $10 an hour. Because of the lack of housing in the area many employees end up commuting back and forth to work, sometimes up to 40 miles away.
According to an interview for the study, Weisen believes the critical need is for one-, two- and three-bedroom apartments or condos in the low to medium price range.
Available rental housing in the area might typically cost $700 to $750 a month plus utilities — gas, electricity and water — of $100 or more per month. The need by the majority of the employees would be for housing in the price range of $500 to $600 month, including utilities, if the rent burden were in proportion to their income.
What’s rent burden? Rent burden is the proportion of household income spent toward housing and utilities. When lower income households spend more than 30 percent of their income toward rent and utilities, this burden is considered excessive because it begins to limit the money available for other essentials.
“You have a woman working full time at maybe Wal-Mart for example,” Shaff said. “She’s making $10 an hour, she’s making $21,000 (rounding it off) a year, 30 percent of that is $7,000 divided by 12 is about $650 that should be going to pay rent and utilities, and that is before taxes are taken out. She doesn't have enough money to pay that rent and utilities and support two kids.”
“There is still this huge gap between what people are earning and what the rents are. Our goal is to meet that need, to provide affordable housing,” Shaff said.
According to the housing study, there are more than 1,600 households in the Cloquet/Scanlon area with incomes less than $50,000 per year that pay more than 30 percent of their adjusted income on housing. Roughly 30 percent of all residents experience a fairly high degree of housing cost burden.
In addition, several apartment buildings in Cloquet that used to be subsidized housing have changed and are now going for market rate, which has made the demand even greater.
The HRA recently received money from the Minnesota Housing Finance Agency for a Bridges program specifically for homeless people to help them find housing. The program provides housing certificates to homeless individuals with documented mental illness. The certificates are presented to a prospective landlord similar to a Section 8 voucher and are valid up to two years while the individual waits for their name to get to the top of the Section 8 waiting list.
Shaff added that the Section 8 voucher program has an 18-month waiting list with about 220 names on it, so if a person qualifies for help with housing, they often have to wait a long time.
“When people walk through the door I almost want to cry, because I know I can't help them,” Shaff said. “They need housing and they need it today.
The waiting lists for the local apartments range from nine months to two years, she added.
According to Shaff, Larson Commons’ waiting list is about two years long, Sahlman Court is about a year, and at Aspen Arms the wait is around nine months because there is such a high demand for them.
“Occasionally we hear about a vacancy, but they charge $900 a month for a one bedroom,” Shaff said, of local apartment buildings.
The HRA’s proposed new building will be able to provide quality, affordable housing for 35 families, helping to close the gap for at least a few residents.
The proposal has been submitted for review to the Cloquet Planning Commission at its next meeting May 10, then it will be reviewed by the city’s Economic Development Authority May 11 and the City Council May 17.
The HRA is holding a neighborhood informational meeting at 6:30 p.m. Wednesday, May 4, at Aspen Arm, 950 14th St., Cloquet, to answer questions about the proposed apartment project. Refreshments will be served. The HRA is also asking Cloquet citizens to submit suggestions for a name for the new building to the HRA by noon Friday, May 6.