Program breathes new life into vacant homes

City’s Vacant Housing Recycling Program provides contractors an opportunity to redevelop blighted houses

Realtor Wilson Molina stands in front of a house in the Phillips Neighborhood that he bought through the city of Minneapolis’ Vacant Housing Recycling Program. He recently sold the property for $299,000.
Realtor Wilson Molina stands in front of a house in the Phillips Neighborhood that he bought through the city of Minneapolis’ Vacant Housing Recycling Program. He recently sold the property for $299,000.

For years, a house on 16th Avenue in the Phillips Neighborhood sat in disrepair, one of hundreds of blighted properties owned by the City of Minneapolis.

But this past year, real estate agent Wilson Molina bought and invested thousands into redeveloping it. He replaced the plumbing, heating and electrical systems and installed a new kitchen and bathroom, among other improvements.

Molina, who sold the property last month for $299,000, is one of a handful of developers to take advantage of Minneapolis’ Vacant Housing Recycling Program, which aims to revitalize neighborhoods through new housing opportunities. The program has been in existence since 1984, but the city has been making efforts to broaden access to it over the past year.

“We wanted to provide more access to the opportunities,” said Roxanne Young Kimball, a senior project coordinator with the city’s Community Planning and Economic Development Department. “What we’ve been seeing through the program is that there’s definitely small developers out there who can do this really effectively.”

The city has sold 15 houses through the program since February 2015, when it started to more heavily market it.

Minneapolis has acquired tax-forfeited properties over the years, many coming from Hennepin County. The recent effort to develop these properties came in part from City Council Member Blong Yang, Young Kimball said.

She said Yang (Ward 5) had been hearing from some neighborhood organizations who wanted to see fewer houses demolished.

The city held four trainings about the program over the past year, including one organized by Yang. It created a listserv of vacant properties, a program manual and resource guide.

The city requires buyers to complete an application and show proof of two years of experience with significant building rehab. It also requires buyers to have a plan to pay for the rehab and to market the finished property.

The city requires staff, the neighborhood and the City Council to sign off on the sale. Once sold, the buyer must put down a 10 percent good faith deposit, which the city returns upon project completion.

Construction must start 30 days after closing and be completed within six months.

Molina has purchased eight properties through the program, including the house in the Phillips Neighborhood. He estimated he would receive a 15 percent profit margin from that property, which is below his usual margin of about 18 percent.

“It’s not a lot (where) you’re going to get rich off it,” he said, adding that he expects a smaller profit margin for properties in North Minneapolis.

Contractor Eugene Bryskin of Homes Minnesota said profit isn’t the reason his company purchased a vacant house in the Jordan Neighborhood. For them, it is about giving back to the community.

“We know what it’s like when you’re living in a situation that you can’t really control the housing that you’re able to afford,” said Bryskin, adding that the program can create work for local residents.

“It’s an opportunity for us to help out the community that we’re vested in.”

Homes Minnesota purchased the house in the Jordan Neighborhood in December and was approved to purchase two more last month. The Jordan Neighborhood house was known as the “blue tarp house,” he said, because of the tarp covering the roof.

The team is about one-third of the way through the project, which Bryskin estimated would cost more than $90,000.

“All the neighbors were hoping that it was going to get torn down,” Bryskin said of the property. “It was basically an eyesore.”

Minneapolis resident Marcia Ojeda bought her house last year through the program. She said she decided to apply because the price was cheaper and it gave her an opportunity to live in a home with her family.

“When I think to buy a home, that’s a dream,” she said.

FYI …

Visit the city of Minneapolis website for more information on the program.

 

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