Narrative Summary to the McKnight Foundation
Housing Director Jeff Skrenes
North Minneapolis is often considered “ground zero” for the foreclosure crisis in the Twin Cities, and the four square blocks surrounding the intersection of 31st Ave N and 6th St N could easily be called the epicenter. There are seventy-two property parcels in this area. Since 2006, fifty-four have been foreclosed, boarded/vacant, vacant land, or some combination thereof. The housing instability then made it easier for criminal elements to thrive in the area. As recently as May of 2008, there were as many as eight properties where drug use, drug dealing, prostitution, and other illegal activities had been rampant. One property in particular was dubbed “the apartment complex of anarchy” by the community, and our board chair – who lives in the EcoVillage – had his truck set on fire in retaliation for his repeated 911 calls. Another resident was the victim of two home robberies and one unsuccessful attempted break-in.
Hawthorne and its partners responded with a coordinated effort that led to significant changes, especially in the latter half of 2008. Our development partners at Project for Pride in Living, Inc., Minneapolis CPED, and Hennepin County now own or are in the process of acquiring thirty-one of the foreclosed/boarded/vacant properties. All but one of the properties where illicit behavior was present are no longer problems – either because we acquired them after foreclosure or the landlords brought in new tenants that were not detrimental to the community. The final problem property has been the worst offender, but the owner is in foreclosure and the property will be vacated by May of 2009.
Criminal activity seemed to peak in the spring and early summer of 2008. In response to break-ins, drug dealing, and prostitution, Housing Director Jeff Skrenes worked with the city of Minneapolis and the Northside Home Fund to convene strategy sessions with various officials and EcoVillage residents. Attendees from the city included Mike Christenson of CPED, Jill Kiener of Northside Home Fund, CM Diane Hofstede, Inspector Mike Martin, Tom Deegan of Problem Properties Unit, and representatives from the city Inspections and Fire Department. Together we went through the EcoVillage property by property, problem by problem. Each of the partners took concrete actions that led to the area being drastically different within a very short time period. It is no exaggeration to say this was one of Hawthorne’s many success stories in 2008.
Not only did Hawthorne take a stand against drug dealing and criminal activity in the EcoVillage, we also stood up to a national mortgage company and held them accountable for their actions. In early 2007, PPL was set to acquire 415 31st Ave N for approximately $137,000 when the sellers very mysteriously pulled out. Since the property is a central parcel for Phase I of the EcoVillage, its acquisition was essential, regardless of who the new owner was. However, attempts to contact the new owners were suspiciously difficult. Hawthorne researched and found that a $235,000 mortgage had been originated on the property by Citimortgage, despite its vacant status and a tax-assessed value of $107,000. Since the new mortgage was in place, the house remained vacant, was a target of arson, and became a problem property in the neighborhood. Through collaboration with the Foreclosure Prevention Funders Council, we retained the legal services of the Housing Preservation Project. In January of 2008, Hawthorne sued Citimortgage for failing to address nuisance property ordinances and for “improvident lending.” The nuisance property issues would have stood up easily in a court of law, but improvident lending would have been new legal ground. While we as a neighborhood hoped to establish such a precedent in court, our primary concern was site control for Phase I. We settled out of court and acquired the property for under $20,000. The lawsuit wound up saving Hawthorne and its development partners almost $120,000. But more importantly, it marked the first time in the nation that a neighborhood group successfully held a national mortgage giant accountable for its actions.
The EcoVillage is expected to set a national example once again in 2009. Hawthorne formalized a partnership with the MinneAppleSeed Group in 2008. MinneAppleSeed is a coalition of builders, north Minneapolis residents, and faith-based members whose mission is to “restore hope to the community.” One facet of this broad goal has been Green construction. MinneAppleSeed had attempted to begin building a house in coalition with Urban Homeworks, but that was ultimately unsuccessful. Having heard about the EcoVillage, they contacted Housing Director Jeff Skrenes. Their desire was to build a “passive solar” house in the Hawthorne neighborhood. The proposed structure would use innovative building techniques to create a home where heating and electricity bills may be as low as $30-50 per month even in the depths of winter. Such costs would also be “fixed” in the same way fixed mortgage rates are not subject to change. Once completed, the house will be occupied but open for a time, for tours and training so that contractors may begin to view north Minneapolis as a destination for learning about green building design. There are only several such houses nationwide. Hawthorne and MinneAppleSeed have agreed on a specific lot and are moving forward with acquisition from CPED. We expect to break ground by the spring of 2009.
From a very early stage, Hawthorne understood that the foreclosure crisis was much larger than just its own neighborhood and an adequate response would require broad partnerships to be successful. Shortly after beginning his work with Hawthorne, Jeff Skrenes helped to form the Northside Community Reinvestment Coalition (NCRC). NCRC is a group of non-profit, ethnic, and faith-based organizations working together for financial justice in north Minneapolis. Its goals are to engage banks and other financial institutions to gain improved banking presence, mortgage and small business loans, and move residents from check-cashing services to traditional banking. However, the coalition’s work has primarily focused on housing as the most pressing issue at this time.
NCRC received $35,000 from the Northside Home Fund to hire a community organizer in 2008. The organizer stayed on only briefly but the coalition still flourished. Three large community meetings were held at the Minneapolis Urban League regarding foreclosures. We had the opportunity to educate the community about the problem and their rights, to bring in lenders for face-to-face discussions with borrowers in or at risk of foreclosure, and most recently to do a week-long foreclosure prevention outreach. NCRC has also met with Representative Keith Ellison, Rahm Emmanuel, and other local and national politicians around the foreclosure crisis. When GMHC created their innovative contract for deed program, NCRC had a strong voice in what the product would look like and how it would serve north Minneapolis.
NCRC members also created a unique method of tracking Adjustable Rate Mortgage data property-by-property in Hennepin County. Other data available only gets as detailed as census tracts or zip codes in determining where the problem is located. Hawthorne applied to the Center for Urban and Regional Affairs for a research assistant to help aggregate this data for 2007 mortgage originations throughout north Minneapolis. We will track at-risk mortgages, who owns and services such mortgages now, and the effectiveness of our foreclosure prevention outreach and counseling. Hawthorne and the coalition expect the research and outreach to save many residents’ homes and inform tenants of their rights. We are also intentionally measuring the effectiveness of this campaign so that it can be replicated in Hennepin County and any other county that aggregates mortgage data in a similar fashion.
In July of 2002, there were sixteen boarded and vacant properties in the Hawthorne neighborhood. Six years later, there were 165. During that span, the Hawthorne Neighborhood Council gave out grants and loans through CEE on 183 properties. Only fifteen of those properties were boarded and vacant. Of those fifteen, five were owned by development partners such as PPL, CPED, and Urban Homeworks. Our assistance in those cases went to help defray rehab and ownership costs. This data showed us what many intuitively already knew: boarded and vacant properties had grown exponentially, yet our housing programs provided great stability in the face of a historic crisis. In response, Hawthorne replenished and updated its assistance programs in 2008.
Hawthorne residents were “thinking green” well before the phrase became commonplace. This vision created the EcoVillage and is extending to the community as a whole. Our Housing Director has met with CPED, Congressman Keith Ellison, LHB Architects, community members, and other stakeholders to develop a plan that would make the Hawthorne neighborhood a carbon-neutral neighborhood. This plan is still in the early phases, but Hawthorne is uniquely situated to make it a reality. Our business and industrial corridor has a large number of buildings with flat roofs, allowing photovoltaic panels to be widely constructed. We expect to lead the nation yet again in this vision and will take the first concrete steps toward that in 2009.
Jeff Skrenes worked with CEE and NRP to replenish Hawthorne’s most successful program, a 4% loan for owner-occupants to rehab their homes. We also met with community members towards the end of the year to examine market conditions and the neighborhood’s needs. Our goal was to update existing programs or create new ones in ways that would reflect the neighborhood’s values, meet the needs of the community, and make financial sense in light of current market conditions. In January 2009, the Hawthorne Neighborhood Council approved the “Hawthorne Advantage” downpayment assistance program and a zero interest emergency loan fund for urgent home repairs. In February 2009, Hawthorne will have finished its NRP Phase I review and will begin the process of extending successful housing initiatives and creating new ones for Phase II of NRP.
A Voice for Hawthorne
As the problem of boarded and vacant properties expanded rapidly, city and county resources have been allocated in response. For a long time, demolitions were seen as unwanted in Hawthorne. But the housing crisis revealed many homes that were beyond their economic life and were no longer sustainable. Unfortunately, many slumlords and unscrupulous investors began scooping up these properties at extremely low prices. Hawthorne has worked hand-in-hand with the city of Minneapolis to combat this problem. In the EcoVillage, we have purchased several homes ahead of slumlords, and had another unsustainable property demolished. Throughout the neighborhood, Hawthorne identifies properties that are demolition candidates and is active in submitting public comments when such issues come up.
Housing Director Jeff Skrenes has built relationships with politicians and community leaders at all levels. He has worked in coordination with Minneapolis CM Diane Hofstede, State Representatives Joe Mullery, Willie Dominguez, and Bobby Champion, State Senator Linda Higgins, Representative Keith Ellison, and Senator Norm Coleman. These strong relationships give Hawthorne the opportunity to make its voice heard, have its needs met, and its qualities widely known. Jeff Skrenes has also appeared in numerous publications, ranging from local media such as the Twin Cities Daily Planet to the Star Tribune, Minnesota and National Public Radio, National Public Television, The USA Today, and CBS Radio News. In the fall of 2008, he was a panelist at a town hall forum led by the United States Black Congressional Caucus and held in the Hawthorne neighborhood. As we move forward, the relationships Mr. Skrenes has built, the skills he has learned, and the goals he has achieved will only continue to strengthen and serve the community in more and better ways.