ROCHESTER — A $680,000 land purchase is expected to make way for 10 affordable single family homes.
The Olmsted County Housing and Redevelopment Authority unanimously approved the purchase Thursday of
10 lots along Red Hawk Drive Southeast
.
“We are testing our ability to build homes, which is not something the HRA has done previously,” said Mark Engel, Olmsted County’s housing program manager.
The HRA is planning to use a portion of the nearly $5 million in its Growing Affordable Inclusive Neighborhoods program to purchase the properties and find a builder to construct the homes, which will be placed in the
First Homes Community Land Trust
to help keep prices affordable for future homeowners.
Engel said buying the property is the first step. With the HRA board’s approval, county housing staff will work with First Homes and other partners to set criteria for designing the homes and seeking proposals from builders.
He said it hasn’t been determined whether the county will design the homes or give a selected builder the option to design based on county expectations. Either way, he said options for energy efficiency and accessibility will be part of the discussion moving forward.
The related cost and pace of construction also needs to be determined.
“Whether we build all 10 lots at one time or multiple phases will be part of the contractor-selection process,” Engel told the HRA board, pointing out the GAIN fund could support starting construction of $275,000 homes on all 10 lots this year, if that’s what commissioners decide to do.
County Housing Director Dave Dunn said the decision-making process in developing proposals for the HRA board will be measured to ensure risks can be controlled in the new effort, while also seeking to provide needed housing as soon as possible.
“We try to balance those,” he said.
Commissioner Dave Senjem said the initial response to the proposal could spur some apprehension, but he sees it as a good test run for a program that could provide needed homes at affordable prices.
“I do think this is an important experiment, and it’s really not a large project,” he said, adding: “I think this is one of those pilot projects we need to do.”
Dunn said plans will call for selling the homes to families under guidelines established by First Homes, which include income restrictions.
With a home in the trust, buyers will pay for the home but not the land value, keeping the sale price down. The land will remain with First Homes, but the homeowner will retain rights and obligations of a typical homeowner, including the ability to sell the property under agreed-upon terms.
Any equity generated with a future sale is split between the homeowner and First Home, helping ensure the affordability of the home is passed to the next buyer.
Before any sales can be considered, Engel said the HRA board will face several decisions to move the project forward, including approving the selection of the final builder and construction costs.
