Rybak, critics face off on housing

In January of this year, Pulse of the Twin Cities published our second annual “Worst of the Twin Cities” (See Pulse 01/14/04) where Minneapolis Mayor R.T. Rybak was listed as “Worst Politician” of the year for being a perceived challenger of the status quo and then upholding it once in office.

Among the sharpest of criticisms is Rybak’s record on affordable housing, and more specifically predatory lending. Pulse recently sat down with the mayor to set the record straight on these controversial issues.

That spirit of controversy generated a very public confrontation for the first-term mayor. Last Christmas Eve, after Rybak had seemingly failed to uphold campaign promises to fight predatory lending, about 20 to 30 activists from the Association of Community Organizations for Reform Now (ACORN) showed up at the mayor’s front doorstep. (See Pulse 12/31/03)

As Rybak puts it, this was “the only time during the holidays that I had with my kids.” While inside with his family, activists outside displayed their “Grinch of the Year Award” and held a boisterous demonstration and media event — all in response to the mayor’s refusal to support an ordinance against predatory lending practices.

Predatory lenders impose unfair and abusive loan terms on borrowers, often through aggressive sales tactics and outright deception. Predatory loans by huge companies like Wells Fargo turn the dream of home ownership into a nightmare, in the worst instances ending in foreclosure. Such practices are often concentrated in poor and minority neighborhoods where better loans are not readily available, and the foreclosures and loss of equity can devastate already fragile communities. ACORN has been campaigning to stop these abuses by promoting legislation in Minneapolis that is based on a 2002 Oakland, California ordinance that banned certain predatory lending practices for home loans and required independent counseling on high-cost home loans.

Agitated that there has been no support for an ordinance coming from the mayor’s office, ACORN leaders made speeches, hung a“Grinch of the Year” sign on Rybak’s door, sang anti-Rybak carols and left him a bag of coal on his doorstep – all in front of a small media turnout. Rybak was visibly upset by the tactic, and argued that he is “the most accessible mayor around,” and that ACORN supporters “deserve to know the numbers.”

It seems that ACORN does know the numbers, but that’s not why they’re upset. “He’s continued to be oppositional,” says Becky Gomer, Head Organizer for Minnesota ACORN. “The city council and the Mayor in Oakland just took a stand on predatory lending...they put their foot down and said ‘not in our city,’ but the Mayor here has just not made the commitment to an ordinance in Minneapolis.”

The proposed ordinance, which was stalled in committee at the city council, primarily defines what a “high-cost loan” is and would provide loan counseling to those who may be subject to one, which is “a key provision,” notes Gomer. As for disturbing the Rybaks’ Christmas Eve, Gomer reminds the mayor “our members’ kids and families have lost their homes due to predatory lending in Minneapolis. Now that’s disturbing.”

Rybak says he shares ACORN’s sense of urgency to stop predatory lending in Minneapolis, but disagree is on the methodology.

“It’s an important issue to deal with, and there can and should be tough laws at the state level. This is why we’re working with Attorney General Mike Hatch to get state-wide legislation on predatory lending in Minnesota.”

He concluded that not much can be done through municipalities without these tough state laws to back it up. Rybak also conceded that the State Legislature has been “hostile” towards Minneapolis in general, making it difficult for the kind of reforms and funding the city needs to meet the affordable housing challenge. So what has our mayor done on his affordable housing campaign promises?

“The numbers are all on the city’s website,” says Rybak, numbers of which he is “incredibly proud.” On April 15 two nonprofit organizations, the Family Housing Fund and HousingLink, released the report “Housing Counts: Measuring Affordable Housing Production and Preservation in the Twin Cities,” which can be found on the city’s website. Included in it is information about affordable housing projects in Minneapolis and Saint Paul that closed in 2002 and 2003.

The report shows that in 2002 and 2003 Minneapolis and Saint Paul combined to put 1,985 new units of affordable housing in the production pipeline, over 40 percent of these new units are set to serve individuals and families at 30 percent or below of area median income, and that 1,564 units of affordable housing in the two cities were preserved. The report also identifies how many affordable units are planned or preserved at three levels of affordability: 30 percent, 50 percent, and 60 percent of area median income. Breakdowns also include new production of rental units. When asked if he can take credit for these positive numbers, Rybak simply responded, “You bet.”

What Rybak seems to be most proud of is a recent 41.85 million allocation for affordable housing in North Minneapolis, known as the Northside Home Fund, that’s slated to be implemented late this year. These funds are to be divided into three areas: loans for renovations to existing property, down payments for home buyers, and money for rehabs of vacant and boarded property.

Twenty million of this fund comes from the local Franklin National Bank Acquisition, Demolition and Rehabilitation Fund with a focus on loans for down payments for home buyers. Another 20 million is from the state via the Housing Finance Agency (MHFA), in which roughly half will be given as loans for rehabs while the other half will be for mortgages. City taxpayers get to chip in $1 million through the Minneapolis’ Community Planning and Economic Development (CPED) Boarded and Vacant Property Fund. The other $850,000 is split between General Mills’ Boarded and Vacant Properties Fund ($200,000), CPED’s Greater Metropolitan Housing Corporation (GMHC) Rehabilitation Fund ($500,000) and the American Dream Downpayment Homeownership Initiative (ADDI), from HUD’s American Dream Downpayment Assistance Act (signed into law by Bush this last December) with the aim to increase the homeownership rate, especially among lower income and minority households ($150,000).

Also refreshing is the mayor’s renewed understanding of how important job growth and livable wages are an integral part of bridging the affordable housing gap. “You can’t have affordable housing without livable wage jobs,” states Rybak. “We’re not talking about minimum wage, but ‘affordable housing’ means that a person making $11/hour doesn’t have to choose between food and rent.”

But what about those who aren’t making ends meet and need assistance? Public housing, as Rybak puts it, is “an important part of the equation for affordable housing” But federal money for public housing is tight for all communities in the U.S. and the federal government has frozen new Section 8 vouchers, affecting many in Minneapolis.

“Stop screwing the poor residents of this country!” proclaims Rybak when prompted about the funds at the federal level. “We’ve been talking to HUD,” he states, “But the only way to get the funds is to be a national leader in housing, demonstrated by the numbers. That’s why we’re proud of the numbers.”

Arguably, the numbers look good. Rybak affirmed that affordable housing was his “top priority” going into the campaign, and that it still is. Also on the city’s website is the mayor’s “Top 10 Affordable Housing Strategies” — all of which could be called progressive — including prioritizing affordable housing in the city and increasing funding for repair of units therefore reducing condemnation, encouraging the private-sector to develop more dense, urban-friendly housing, and revitalizing the process to engage the community. Again, all of it sounds cheery. But what’s noticeably absent is a commitment to ending predatory lending practices.

For more information about ACORN’s work to end predatory lending practices, contact them at ACORN: 651-642-9639 acorn.org. To get copies of the city’s reports on affordable housing, call (612) 673-2100.