Rising Whittier lot prices cause affordable-housing worries

The Whittier Alliance has given its support to the Poseidon Company and Sabaka Design to build housing on the vacant lot at 2807-09 Pillsbury Ave. — one more example of a turnaround in neighborhood fortunes.

The Whittier neighborhood group once worried about blighted property, but now worries that high lot prices will torpedo affordable housing. The Minneapolis Community Development Agency owns the 67-by-165-foot double lot and is asking $44,000 for it.

"We don’t mind and understand the price of the lots should go up," said Jeff Langaard, Whittier Alliance executive director. "When we want to do an affordable-housing development, it makes it more difficult to make those single family homes affordable."

Over the past three years, MCDA-owned Whittier lots sold from $3,000 to $14,000 each, Langaard said. However, the last few lots have sold in the $18,000 to $40,000 range.

Luther Frank, MCDA staff appraiser, said the market is driving the lot-price increase.

"I follow the market, I don’t lead it," Frank said. "I look at private market transactions taking place — many times, in neighborhoods where a market didn’t exist before. Now there is a strong demand. People are looking to build in Whittier and Phillips."

Lot prices depend on zoning, he said. The 2807-09 Pillsbury property is zoned R-5 for high-density housing.

Once MCDA and Poseidon finalize the sale, the development can move ahead. The lot is now used as a community garden.

David Sabaka of Sabaka Design, a project partner, said Poseidon plans to build a four- to six-unit cluster development with market-rate townhomes and possibly carriage houses.

"If we obtain some gap financing it could bring the cost down," said Sabaka, who formerly worked as the Alliance’s housing and commercial development manager.

The project may require variances, so groundbreaking may not happen until spring, he said. The developers are still refining the design.

The Alliance recommended Poseidon from among five proposals. Poseidon is also developing a three-unit townhome at 221 W. 28th St., Langaard said.