We have in our studio today. Yes to know a lot about those issues Jim solum executive director, the Minnesota Housing Finance Agency and can afford a principal planner at St. Paul's Department of planning and economic development in about 8 minutes. We're going to be taking your questions about housing. So give you out the phone numbers at that point. But first I'd like to ask you are to guess it's a little bit about the current situation Jim solum. What is the housing demand like today? And what is it likely to be in the next dose a 5 years can the Housing Finance agencies new program in the last 2 or 3 days since the details of that program were announced we've literally had several thousand phone calls at the Housing Finance Agency offices inquiring about that program with individuals and families wanting more information. So the current demand as of today is sort of mind-boggling.Turn to the response. We've had to the program. But if you look at the long longer term for the 1980's the demographic data is also kind of mind-boggling in that the baby boom of the fifties and sixties is entering the housing buying. Of their lives during the 1980s and all of the estimates indicate that up through about 1988 or 89. We will have substantial pressure of for producing additional housing and on the existing housing stock in Minnesota and Nationwide, for example, in the metropolitan area during the 80s the decade of the 80s 428 thousand individuals will enter their age. Of the other of their 30s that's 113000 more than did that in the 70s. So the basic demographic data isI'm not frightening but it's so clearly a very important to understand the kind of pressure that we're going to have for the next few years. What do you think is the key to getting housing for current housing opened up to those people simply a matter of interest rates coming down interest rates are clearly the key to making housing affordable into opening up the whole process of buying and selling homes again, there is only a certain percentage of an income of income that an individual or family can really devote to housing. We used to think it was about 25% those numbers of now increased to the point where substantial numbers of families are paying 4045 and 50% of their income to housing cost interest costs are the largest single cost element in buying a house money cost more than the building does than the structure does and the cost of money is such that it makes housing virtually unaffordable.For large numbers of families that you're talkin just in terms of monthly payments League of shavings the S&L Association using 1981 data that the median monthly housing cost in the nation in 1979 went up to $816 a month. That's probably higher than that in 1982 and you can put that in perspective in that in 1979 only two years before this data. It was $550 a month in the program that the Housing Finance Agency is announcing this week. Even at a 12% mortgage 12% mortgage rate on a $57,000 mortgage. The monthly payment is $655 a month.So housing is expensive, even when you get the interest rates subsidized or written down a bit. Can you have an interest in rental units and the American dream may not be home ownership for a lot of us the American dream. Maybe just to have a rental shelter over I had some Nancy that's right. Third of the households in the Twin Cities metropolitan area. That's 240. Mm + households are renting households 1/3 of our households have been renters for a long time that proportion is held there is every reason to believe that a significant portion of our population will be renters for a long time to come in. Definitely. There are reasons. In fact, I believe that that proportion will increase as much as we talk about the American dream and as much as we as we have done a fantastic job in this area is in the rest of the country of making homeownership accessible to peopleWe have to keep reminding ourselves that a good portion of our population rents either by choice or by necessity that dream doesn't necessarily apply to everybody rental housing is very difficult to build right now are here again interest rates are the key to being able to get rental housing constructed and we don't see any big change in the next future in the near future in the. From 1967 and 1972. We built over 10,000 rental housing units multi-family housing units almost all of which were rental in the Twin Cities metro area every year.That is dropped steadily since 1972 and 1981. Just over 1,000 multi-family units that were rental units were constructed in the Twin Cities metro area beastly giving the given the demographics the gym just gave us an intern to the number of people who are going to be in a position of needing housing in the next few years that said that could be a dramatic shortage of households in their 20s and 30s are young new households. Typically, those are households looking for a rental unit and now because of the cost of homeownership that's getting more and more inaccessible for those households. The demand for rental housing is going to increase that much more. Let me just give out your number so that I can call in with their own questions to Jim sold the Housing Finance Agency and Ken Ford of the Saint Paul City Planning office to 276 thousand the number in the Twin Cities to 276 thousand and if you're calling fromI'll State the number toll-free 1-800 652 9700 that's one 800-652-9700. Give us a call. If you've got a question about housing. I ain't heard or did I see in the paper just a couple days ago that the median price for a house in the Twin Cities now to about 72,000 coming from on that how much of an increase is that while the increase is probably slowed down a bit in the last 2 years and do there was an interesting article in yesterday's Wall Street Journal about the decline in the rate of increase in housing cost. That's largely because the money isn't available to continue the escalating prices that we've had at least during the last half of the 70s so that that rate has slowed down during the latter part of the seventies. The annual increase in housing cost was about eleven or twelve percent of year.And we looked at that little bit in terms of what might happen during the 80s if that were to continue and it clearly isn't going to continue at the 11 or 12% rate. But if you did by only nineteen eighty-five less than 10% of the houses sold in the Twin Cities metropolitan area would sell for a price less than $75,000 and only 1/3 would sell for a price less than $100,000. Now that's if the 11 12% rate of the 70s that continued in the median priced home in 1985 would be something like $120,000. Now those numbers aren't as I say absolute predictions. What they indicate is the order of magnitude of the continuing problem of affordability that were likely to have and if you'd link the substantial cost of the structure with can'tNeed High interest rates and nobody is predicting that interest rates will be six and seven percent at least not anybody that I've looked at her heard about you put those two pieces together, you are faced with the inevitable problem of dealing with affordable housing at a time when we need more units than we've ever needed before they even including the. Right after World War II. We have a couple collars on the line. Let me just quickly gets out those numbers again to 276 thousand in the Twin Cities. If you want to give Jim solum can 4 to call 227-6000. State one 800-652-9700 when we take our first caller. Good afternoon. You're on the air.Hi. Hello, I'm we on a duplex. It's a contract for deed. We still have to get a mortgage on it. Would you have anything to do with that? I mean, is there any way we could get help with that? The question assumes addressed me. The answer is no the federal legislation that controls the ability of either the state Housing Finance Agency or the city of Saint Paul sell bonds for housing specifically excludes. Anyone who has owned a house or currently owns a house for any financing help and especially specifically includes refinancing contract for Deeds. That's a decision of the Congress made 2 years ago when they changed the legislation giving state and local governments the ability to finance housing. Does it help you out a bit? Let's take our next call. Good afternoon mortgage for the Minnesota Finance Agency. Can we still sell this house cannot we have with the legislative authorization developed a new system for doing that the rate at which the house can be sold in the mortgage assumed is now 80% of an index that is related to current mortgage rates. So it's still a somewhat more attractive rate than current market rate, but it is not the 6.5% that was originally on the mortgage. I think just this week is indicated. It will hear arguments on that case probably not this year, but perhaps in the fall and the whole question of mortgage assume abilities and the impact on the savings and loan and mortgage Finance industry in this country will be decided by the Supreme Court is likely to be one of the more significant housing court cases ever decide in my question. I posed to open that as to whether I will be able to sell it. Well, you can turn you can clearly sell it at the I think I rate this month or something like 13 and a half percent wouldn't that's not clear. I don't know whether it'll affect programs of state and local government to or not. I'm not familiar enough with cases before the court to answer that question very much. Thank you for calling in. Now. If you have questions about housing either if your renter or a potential home buyer, why don't you give us a call at 227-6010 the Twin Cities and outstate. You can call us toll-free 1-800 652 9700 our guests today Jim solum of the Housing Finance Agency and can afford who is principal planner with the Saint Paul Department of planning and economic development. We have another caller on the the line. I thought I take it you add a comment to make jam. Rental housing availability the Housing Finance Agency is finance some 16,000 units of rental housing in Minnesota in the last eight or nine years this year. We're doing about 1030 units around the state of Minnesota. If we were to do those units at conventional interest rates around 17 and a quarter percent. Let me just tell you what the rent would be and then you'll know why nobody is building rental housing today the rent for a one-bedroom walkup unit at conventional interest rates would be $685 a month. For a two-bedroom townhouse, it would be $950 a month for a two-bedroom walk-up $835 a month and for a three-bedroom townhouse $1,038 a month, you can obviously by rather than pay those kinds of wrench. So no one is building conventional refinance rental housing like they did in the 60s as I can into it because it's simply no market for it and it's not a good investment. We might that later in the program. Let's check our next caller good afternoon. You're on the air directly about the new plan about subsidized interest mortgage currently being offered by sales of some Bond. I was wondering if that I was told that this does not include houses that are located in Minneapolis or St. Paul Coon Rapids area. Is there any plans that's for future sales Bond? So you would include places like Minneapolis-Saint Paul in Coon Rapids. Is it all three cities have their own local programs using tax-exempt bonds as well and indeed Minneapolis. And st. Paul have a very attractive program that the two cities of done in cooperation with some the night family housing fund and there is a substantial amount of new housing at an interest rate of 11 and 7/8 available. And if you're interested in that you should contact to City agencies involved. The same is true in Coon Rapids, which has 30 million dollars in money for a program only in the city of Coon Rapids. It may be that if we are if we being State Housing Finance Agency are able to sell bonds again later on this summer early fall, we would include some existing housing in Minneapolis and st. Paul. We are have another caller on the line. Good afternoon. You have a question for Jim's All American Ford in the metro area and the amount that they have gone up in price have urine have your analyst done any research on how much of that is inflated by creative financing and by the fact that a higher proportion of the houses sold have perhaps been rehabbed unit know that's a good question the creative financing his undoubtedly had an impact on the increase the cost to increase price of housing at least up until perhaps this year when the indication seems to be the indeed maybe that's leveled off rehab probably over the Long Haul at least if it doesn't the decrease or me, if it doesn't slow down the rate of increase is it should at least level it out, and there's certainly True that in a lot of homes that have been rehab the prices gone up, but then presumably so has the value of the structure and the prices more directly related to value in that instance, but it's clear that creative financing has had an impact in the past on the cost of housing. I know of no researchers study. That is that would give you a good ballpark figure on Okay, another caller with a question. Good afternoon. You're on the air? Basic information would be what is motivation for keeping now the interest rates high and why won't the interest rates be lower if it's keeping them so many people are buying market and then what would be the predictions for the future of interest rates going up staying same or falling back? I'll just hang up though. Thank you. I think we should I don't think so. I think you can find as many explanations as to why interest rates are high as there are people willing to give those explanations and there are as many predictions as to what's going to happen with rates as there are people making predictions. It's pretty clear that in terms of the basic management of the nation's economy. There's a conflict now between monetary policy is implemented by the Federal Reserve and fiscal and budget policy is implemented by the administration in the Congress and until the two pieces of that puzzle. Get somehow more together. We're not likely to see a substantial decrease in rates all of the economist that are predicting what's going to happen to interest rates at least for the last half of this year and on into a T3 indicate that rates are not going to fall very much simply because there is a substantial demand for additional Federal borrowing to finance the national debt in the numbers on that are staggering in terms of the last six months of this year and to the extent that the federal government needs to borrow money and it that pays whatever price is necessary to borrow that money. Everybody else has to compete on those same terms and interest rates won't come down. Well, I think we should mention to that. We have a cheese of fantastic housing high quality housing that we have for our population here with a with a protected isolated source of capital set aside for this for this purpose in this country for many years in our savings system. And I don't think we're going to have that anymore. So there is maybe interest rates will come down at some point, but they're never going to come down to the point. We're never going to have that the kind of system again Capital now, we have to compete for capital for housing with with every other need for capital in our economy. And our economy is much more in competition with needs for Capital all over the world now than it has been in the past. That's a really fun of metal point in the 50s 60s and 70s Savers subsidized home buyers through the way in which the whole process was regulated at the federal level and the kinds of guaranteed. To return that there were on Savings and Loan institutions and the limits that there were on passbook savings excetera as Ken pointed out that day is gone. It's not going to return and the competition for Capital will remain really rather strong in our economy. And the that just simply means interest rates aren't going to come down or they were in the 50s 60s and 70s. Okay. We have a couple more phone nurse on the line good afternoon. You're on the air with renters are landlords and I was wondering if you can address the problem of the rising utility cost for the for this year. And for the years to come we've been talking to some of the people at the Minnesota state energy agency in a specifically with gas and electricity are gas in general. It's going to be going it's going to be Elegant Rippling by the year 1988 and I was wondering if you were or if the people were going to be building that into their budgets or something. Can utilities are certainly going and gas particularly certainly is going to be doubling or or tripling and the that is going to affect homeowners and renters are like I don't I don't see any solution. I certainly hope people are building that into their budgets. That's a major factor in the housing cost for everybody. But the problem is really that for many landlords. There is no real system of creating incentives for renters to keep utility cost low because there aren't individual meters or the landlord May own the building for such a relatively brief. Of time that they're not interested in the Long Haul the Housing Finance Agency has a very limited demonstration program with the Minneapolis-Saint Paul and number of other cities where we're attempting to figure out ways in which to provide financing to improve the Energy Efficiency of existing rental housing. And while we've done fairly good job with the city. In the limited amount has been done. It's a very difficult problem because of the way in which most the rental housing is financed the lack of incentives in the system and the real difficulty in getting landlords and tenants to work together on Energy Efficiency. If you have a question about housing or renting do call us at 227-6000. If you're in the Twin Cities the number again to 276 thousand and outstate listeners, so you also give us a call a toll-free it when 800-652-9700 if you got a call about the questions about the housing, this is your big chance with Jim Soul Amanda. Kenford. Let's take another caller. Good afternoon Spanish situation and Housing Bank. And what it is. The only real Advantage maybe that's it is possible to get an insured loan through the Veterans Administration, which has some advantages in the in that lenders are somewhat more willing perhaps to make clones under that situation in addition Vietnam era veterans in Minnesota have a program designed especially for them through the Housing Finance Agency in which you can get a $4,000 no interest loan for down payment on a house in there that program has been fairly successful and quite widely used in the couple years that has been but it's probably the only real Advantage is through the Veterans Administration housing program. Okay, another caller on the line. Good afternoon. My husband and I were planning on trying to squeeze into the housing market now and then turning around and selling house in a couple of years from the way that you've been talkin who's going to be there to buy that house if anyone? Like where would I get the money order? Will the housing market get so bad. It will just have to stick with the house or lose money on it. Well, they'll be lots of people there that would want to buy a the cliche of the late 70s was it we had changed housing from a consumption item to an investment item and that was buying large true that large numbers of people were buying a house that to do exactly what you had done. I think the evidence now indicates that housing is no longer the Nifty investment that it might have been in the last half of the 70s and that anyone who thinks single-family home is going to provide the same rate of return in the early 80s as it did in the last 7 days and probably better think about that early carefully and weigh the risks before you do it certainly evident housing market today that we can't make any simple assumptions about the ability to sell a property in the future and people have realized that turnover rates are are down people are not moving not exchanges out. Now nearly as much as they were even a couple of years ago that the kind of clog in the system. I want to ask both of you about the empty nest syndrome there were saying because that's one element of a I think what you're talkin about Ken where people who have owned homes for quite a few years have raised families. Those those children have moved out or staying in their homes. They're not turning it over and I'm wondering why we sing that happened. I think that the people who have lives too much of their life in a home they have build up equity in the house and when they reach a stage where it's more space and they need difficult for them to keep up unnecessary for them to Bear the high cost of keeping the property heated and maintained it nevertheless. It is very difficult to find an alternative more difficult. Of course in today's market where it simply difficult to find a buyer for that house, but they have been Limited in the Alternatives available. Most of them want to stay. Neighborhood we have found they would like to retain very often that equity and have some ownership opportunity very often. We haven't had the right kind of alternative available to them where the new construction may occur in the next six years will be targeted to that market of older homeowners industry have identified that as a new kind of marketer at least a new area for applying the creative energies of the private sector largely because of the problems. We've already talked about in terms of newly constructed single-family dwellings being very expensive and being very difficult to afford so that it might be somewhat easier for all these new families to buy an existing house if we can figure out if the marketplace can figure out a way to provide an attractive and affordable and secure living Look for the folks who are in these underutilized homes, and there are several demonstration efforts initial efforts going on toward that very end now in Minnesota, and I think you'll see a lot more of that in the future because the market will respond and it will result in affordable housing. We've been at it certainly Our intention to to try and meet that kind of need Nancy and today in fact is the last day for registering for a contest in St. Paul. If you're a designer, and you think you have a good solution for that empty nester Market get your plan in today or tomorrow. You can get your plans in tomorrow if you register today, and we may have a lot and some award money if you win and we're looking for Creative Solutions for that particular housing market. If you have some questions about housing and you want to talk to Jim Solem of the Housing Finance Agency or Ken Ford of the Saint Paul City Planning office. So do give us a call at 227-6000 in the Twin Cities that number again to 276 thousand. I'll State listeners. Give us a toll-free call at 1 800-652-9700. Let's take another phone call. Good afternoon, and I'm also concerned about some of the the One of which is that there's a severe housing shortage in Minneapolis or seems to be about a 7% vacancy rate in apartments these days and that doesn't jive with the fact that there's a housing shortage. Would mr. Ford like to address that topic first the vacancy rate at the end of the period of that I referred to from 67 to 72 where I think we really overbuilt rental housing was about 7.1% in 1975 for the metropolitan area is a hole for multi-family housing is decline fairly steadily since then in 1981. It was 4.6% I generally assumed Benchmark is a vacancy rate of about 6% that allows normal Market transactions gives people some choice and finding a reasonable Housing St. Paul the vacancy rate for multifamily housing decline to 3.5% in 1980 interest in the in the first quarter of 1982. The most recent figures have shown that that decline is not continuing. The Metropolitan wide multifamily vacancy rate is about 4.9 and the figure that I have seen for Minneapolis in the first quarter of 1982. What's a 5.9. Just about 6 there are of course different ways of measuring vacancy and there are different measurements available. That's curious. And I think that I feel in a number of people. I've talked to feel that what is very likely happening. The reason those rates of not continue to decline despite. What we know is happening to the population is that rental rates getting as high as they are people are really doubling up on a large-scale people who formerly would have rented by themselves now have roommates to make it easier to bear that cost people who might be out in the rental market are staying home with their parents and not getting in the market quite as early, but I appreciate your question. I don't use the term housing crisis at least not very freely vacancy rates are fluctuating. There's not indication that we have fast numbers of people out on the streets at this point. And don't you also can't have to look at vacancy rates and terms of the cost of the units that are available in the in the affordability or the ability of people to pay who are looking for unit. And that's an area that we just don't have very good date on certainly you do that's a very big factor in a large part of the market which may have less economic choice. Their vacancy rate is probably very different from other parts are averaging in the cities these days. Well, I just took a look at the the records we have in our housing information hafez has of the units that are actually vacant as of now or that is as of June 10th right here in St. Paul of the units that were vacant and on the market at that time. The average rent for a one-bedroom unit was $297 for a tube 3bet 2-bedroom unit 355 for a 3-bedroom unit $450. Will take another call or good afternoon. Do you have a question? Yes, I do a housing crisis and then we don't have enough housing or maybe the problem stems from a crisis of expectation on the part of people that are looking for a house in mine. It's good question. I think that we've heard a lot of talk in the discussion of what housing in the of happening in the housing market about learning to live with less. I believe that our expectations for housing are going to have to change and are going to change and I think that is part of it. I think that what we see happening as I explain my feeling about why the vacancy rate is not continuing to Define to decline people are doubling up we hear about that happening all over the cities and I think that's a reflection of the fact that there is flexibility there people's expectations 2 Chainz. They realize their expectations are not going to be met and I do think that's a big part of it. I agree the interesting phenomena in the building industrial developers who would never produced anything other than a single family detached housing up until the last two or three years are now doing townhouses condos quads and whatever because that's The market is that that's what people can afford and the single-family detached house with white pillars in the black shutters on a Big Lot in the suburbs. Simply may not be the way most of us will be able to afford to live in the eighties and indeed you can make a good argument that we've built as many of those kinds of units as are necessary in terms of the market in the 80s, at least you can make that point for purposes of discussion and that what is needed now is something that is smaller more affordable and more energy efficient question. Good afternoon. Good afternoon. And I like to refer to the car that was previously I regarding utility bills and I just don't listen to the budget for the speak now conservation people know that we can save this much money and it would be wise for us to find the money and Charles and 2/3 sometimes takes 5 years has a big thing. We just don't have to stop at your commentator said well, it's just something we're going to have to live with the next thing. I'd like to go into his alternate energy now. This is a big sister. Cancel alarm not listening right now. I didn't catch that part. It's an excellent program that you folks but I can't believe you me that thing produces Park. Are we driving? These things. Isn't one certain answering alternate energy. When does not an answer but it's okay. Well, we appreciate your comments. When you were at the conference the other day were mentioning the people about the Builder specifically are beginning to take these things into account and that they are they are building a better space use facilities question. I was addressing previously a what do we do about utility cost in multifamily housing. I certainly do not disagree that there is a great deal we can do there is but We're not building very much multi-family housing. Most of it. Is there on the ground and the rates for gas are going to increase and conservation is only a small piece of that effort. They're going to increase despite what we can do in all of the programs that we have had in St. Paul to encourage a new construction. We have used every tool that we can to put a tremendous emphasis on Energy Efficiency, and we certainly have achieved dramatic reductions in energy use with primarily super insulation. It is really super Insulation at this point more than and use of passive solar more than Innovative. I do sources of energy that is really cost effective in bringing down the cost of energy and housing. Energy conservation is clearly an important aspect of what has to be done about housing in the 80s at the Housing Finance Agency. We have a program which operates through well over 200 lending institutions around the state to finance housing Rehabilitation fixing up existing homes energy conservation is a key part of that effort and we have an answer substantial amount of energy conservation in Minnesota through that particular program were also involved in a demonstration program to figure out ways in which we can build better single-family attached units of housing that are as Ken pointed up super energy-efficient and I think we'll find very quickly than public agencies at the state local and hopefully even the federal level will finance only energy efficient housing and that the energy standards will be implemented even more effectively than they are. Some more colors. So for the two of you good afternoon, you're on the air in light of the downward Trend in the rate of foreclosures what percentage and guess what I'm wondering is what percentage of foreclosures are. We seeing in the state of Minnesota and how that relates to the vacancy situation as you've mentioned and is it safe at this time to consider purchasing a home with a with a wraparound contract for deed homes in our community property with a smaller percentage of Interest what negative Features as opposed to positive features are there in a contract for deed balloon payment of some size that is due at some time in the future and you're betting on interest rates being at a level which makes the refinancing affordable and makes the total package one that you can continue to afford and each individual has to take a hard look at the his or her own financial situation and play that out over the future and then make your best guess about your ability to handle that and probably get some good Financial advice in doing that. The Foreclosure data is mixed to in Minnesota. I haven't seen any for the last month or six weeks or so. Minnesota was not having the same rate of foreclosures and or delinquencies. I seem to be happy. Ring around the country. So that may change as the economy continues to a decline in the Housing Finance Agency has about ten eleven thousand mortgage loans out to around the state of Minnesota and are foreclosure, right? There are delinquency rate rather today is better than it was a year ago. Okay, another a collar for you two gentlemen. Good afternoon. I'm calling from. Minnesota I'd like to comment on fighting back against some of these housing I built my own house up here before I built my own house. I never even built so much as a garage or an outhouse or anything and I build an 1800 square foot house. And then when I got divorced I build up one and what it means is by doing it I could do so with about $20,000 in materials. Am I on labor? And it meant taking out a loan of in one case $12,000 and Max case $8,000. You can do almost anything, you know, you don't really have to worry about the interest rate. That's an interesting point of are we seeing more of that? Well, there's clearly a element of the market that does that and maybe growing a bit not all of us are handy enough to be able to do that and not all of us have lots and places to build where that can be done. But to the extent that folks can find a location and have the skills nobility. I think that kind of self-help housing will continue and may even grow that then there are various programs around the country that I've emphasized that the federal government had for a long time self-help housing program in the South which was actually quite successful, you know, a nausea an offshoot of that self-help and expanding one's housing is being done it I think in terms of accessory Apartments within homes or am I making too big a generalization or a parallel to that I know I I suspect there's a a relationship there Nancy, but at what you're referring to accessory units is one of the topics that we explored at the governor's housing Forum that you referred to in your opening comments. Refers to the prospects for adding rental units in existing single-family homes. When you notice that first of all, we have a tremendous problem we've been talking about is making housing affordable and just having enough housing units available. Secondly, we have a rapidly growing population of those young households, which mostly are very small household. The number of one person households doubled in the Suburban area parts of this metropolitan area over the last 10 years. We have increasingly small households in our communities and we have a large housing stock throughout the metro area of large houses that were built for families with children and the question is isn't there some way we could be using all of that space more effectively and it has a relationship to energy conservation too because in St. Paul a recommendation first recommendation that we do something about that first came from the mayor's energy committee would said all that space out there that were Heating and houses that are occupied by one or two. People ought to have an apartment some apartments in there. So we get some more rental units and use the space more effectively to that concept on the basis of what happened to a lot of the large older homes and in the forties in the fifties, they became boarding houses. There's lots of objection to that to that concept and we have our zoning ordinance established single-family areas in our houses for the purpose in our neighborhood for the purpose of having a consistent type of single-family development neighborhoods like that during the forties the housing shortage after the war many of the houses were subdivided cut up into small units that we rented many cases by owners moved out. They were owned by absentee landlords and that contributed to neighborhood light and deterioration. And I think that's what the people fear. There is a very valid concern their what can happen to the house in stock. If we change our zoning regulations to allow them to be subdivided. What's the zoning from from your point of view to a safeguard against the dancer from my point of view and this is something that's being addressed across the country in a number of cities have across the country have adopted ordinances to encourage accessory units with in certain restrictions that can prevent much of that kind of thing from happening for example, restricting it to a very small unit. That's only a small part of the house. So it can't be subdivided. We're not talking about dividing it up into a boarding house, but simply letting a couple lifestyle lived in a house for a long time and has a lot of extra space turn a corner of the upstairs into a small apartment. I in some cases they are simply limited to owner-occupants only owner-occupants can undertake them that it's somewhat questionable whether we can do that effectively through zoning. Okay, maybe we'll get some further questions on the idea of accessory units but we have some other callers waiting good afternoon. You're on the air and I like to have more information on the wrong for your Vietnam era veterans and the second question I have is I'd like some information on programs that help residents the same problem make their existing home more energy efficient. Okay Housing Finance Agency legislative authorization has this $4,000 down payment no interest loan available information on that is available either from the agency or through your veteran service officer in each of the counties around the state and when you have a purchase agreement and you're ready to buy a house, the loan amount is made available for down payment at the time closing. It's fairly simple price. There are Income eligibility requirements. All of that information is available from the agency. And if you'll call us at the 29676 1/3 will see that you get the brochure and information on that. Okay, st. Paul has a program for making somewhat below Market interest rate funding available to people to make energy related improvements in their homes. It's very important when I don't have a lot of details on that program with me, but you should contact the energy resource center. If you're interested in finding out more about that program you could get that number either from NSP or from the city's housing information office at 29855 911 Hello, and I would like to know if they have any projected information and what the rental housing requirements will be in that area. Hi there a gym again. I don't I don't know what he means by rental housing requirements. And maybe he means the market. We have financed a substantial amount of rental housing in Duluth and indeed have two developments under construction now in Duluth one of which is the rehabilitation of a school in Duluth into a Housing Development. The Duluth Market is pretty good one right now, but the like all parts of northern Minnesota have some economic difficulties. I can't give any long-term projections for Duluth. Our next caller has a question. Good afternoon. Mine the third Thursday at 8 Cafe money available. Now, I would be eligible for that. And if not what other option on have for refinancing it the state Housing Finance Agency in or local governments who have housing mortgage programs neither can use proceeds from the sale of bonds to finance take out from contract for Deeds. The Congress has prohibited the use of bond proceeds in that kind of a financing effort so that there's no way in which either the state or local units can help with that. The only thing I know is to watch the normal sources of mortgage financing and wait for interest rates to come down to a level that makes it possible for you to refinance and get rid of the contract for deed. Okro guests today or Jim solum of the Housing Finance Agency and Ken Ford a senior planner with the same Paul Department of planning and economic development. They're here to talk to you about housing. And if you have a question to 276 thousand is the Twin Cities number and outstate one 800-652-9700 and that's toll-free another caller on the line. Good afternoon your on the are just beginning a renovation of a very run-down rental unit that we acquired in rural Wilmer and my question. Is there any energy tax credits applicable to these small apartment units? Okay, there are some tax credits in the federal tax code that might apply. I'm not an expert on that dude probably ought to consult your accountant or a lawyer who would have tax practice to help with that the 1981 tax law didn't do some things in that regard that may be of some help but I can't cite you any specifics on that. Okay another caller. Good afternoon. Hello, you're on the air. Do you have a question for Jim's All American Ford? Yes, I do. I'm calling from Little Falls Minnesota and my husband recently took a job in St. Paul and we are trying to move to the cities. We do on a house here in Little Falls, but the find housing market is so much higher in tape off that would finding it very very hard to make the move and I just wondering if there's any hope of any kind of mortgage. Is there anything available to people in this situation? Can Jim Sula mention the an answer to why his program can't be used in st. Paul or Minneapolis? The Minneapolis-Saint Paul family housing fund. There are is a substantial number of mortgages available. They are associated with new construction. There's a wide range of housing opportunities available in new developments within both Saint Paul and Minneapolis mortgage money available for them. There are there are some restrictions in terms of of income generally moderate-income. If you're in the range of 25 to 33000 or thereabouts, you probably can qualify, but you should look into specifics and I'd suggest that you contact the our housing information office to 98559 one. They can send you a brochure and give you specific information on qualifications for that program. Okay, another question. Good afternoon. House by owner first off but advertising is very difficult. Is there any way that a buyer to come in and buy a realtor? Is there a market for vintage single family homes? On the advertising question. I think it's up to you people across the country of anaconda fairly creative length recently to try and advertise a house if they wanted to sell I recently was driving down now Wheelock Parkway in the Saint Paul and noticed somebody had rented one of these large a billboard type light up plastic signs with flashing lights around the the side that comes on Wheels and put it on their front lawn to advertise that their house was for sale. You can do anything that you that you want to anyway. I'm advertising. I'm not sure. I understood the other part of the question. There is clearly a market for their or renting single-family homes and indeed may be today pretty good market for that. There are real difficulties in being at an absentee landlord and you probably need to look at that fairly carefully and or investigate the possibilities of using someone on site or in the same Community to help look after the property but single family homes are always in demand as rental property by larger families for home apartment. Simply don't work. Okay, another color for us this afternoon good afternoon, fire effect of this public investment and housing. Yes. We've looked at that in a very substantial way. I don't have those numbers with me, but we're very proud of the impact that the agencies programs have had in Minnesota on the economy. And in the construction industry were doing about 60 million dollars worth of apartment financing this year. And our estimate is that that's going to put a couple thousand people to work in the construction industry the 30 million-dollar single family program. We hope to do at least half of that new construction. They'll also have a big impact the generates a fair amount of tax revenue both in terms of sales tax and income tax and is an important part. What does the agency can do in a time when the housing and Construction Industries is in bad shape last call? Good afternoon. You're on the air in March of 82 and with basements and how about the financing? Jim I don't know what legislation that is, I would have passed in 82 that would affect mobile homes with basements mobile home financing discrimination in housing and with a pointed at the mobile homes, as I understand that the legislation prevents a community from ruling mobile homes out entirely and it's only an ordinance. I think manufactured housing as such which is the type of home that is essentially pre-built in the factory and shipped and these are assembled or put together on a matter of sight to some place has a tremendous future in the 80s in terms of one way of dealing with the affordability problem. The difference in financing is whether you finance to something is real property. And you do that when you put it on a separate Foundation a lot then gets taxed as real property and or it's a finance does a personal property with a consumer type loan and the cost of those loans is of course the high today it just as it is for Real Estate to loans another caller on the line. Good afternoon. I have a question for either one of the gentlemen we have to physically it's at least that situation which we are unfamiliar unfamiliar with we are supposed to put it down payment and meeting with Developers for some Smokey housing units. And in exchange we will get the advantages that I will be the one to find Canon to lift there and that will pay interest and then dental floss and the developer will have the option to buy back down the line now our concern is that Tax purposes when the developer buys back the property will all that be recaptured and if we go to go into an exchange this is this is a complicated question you have about a minute left. So why don't the one and I let the gym take as much as that you were able to give us advice on that is to hire a good text. Laura have them look at it. And this is going to be our last caller of the afternoon good afternoon. Today are lenders being more flexible in giving loans to people that have averaged to a marginal credit rating. I'll hang up and listen. Thank you. I don't know if flexible is right word. I think lenders certainly work harder to get the people qualified for loans and try all of the ways that there are to do that and it's much harder to do. So it takes a lot more work. I don't think Abilities the right word. I think hard work and working with the prospective buyer. Is that what's happening in The Lending business today? Jimi thing to add him to say that I agree. I think it's a it's a relative thing. But if you look over the last 5 to 10 years, there's been quite a bit of a change I think in terms of the willingness of the lending industry to work hard to make up financing a little bit more accessible. Okay. I want to thank both of you for coming in and thank our listeners for the big questions. Our guests today have been Jim Solem of the Minnesota Housing Finance Agency and Ken Ford who is with the Saint Paul Department of planning and economic development to if you have further questions, so do get in touch with their agencies and they can and I'm sure refer you to the right person to give you the right answer.