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News & Views of Phillips Since 1976
Thursday May 23rd 2024

An urban first home for roots, commitment, and creativity A Community Investment

Tell-Tales signs of home improvement to this unique house and setting by first-time home buyers Lotus Lofgren and Ian McNamara have many stories of their laborious efforts and also joys. In addition to projects remaining on the house, they continue to do landscaping including adding the brick colimns across the front and some at rear. They need more bricks to continue the columns across the front of recently added sideyard that will also become a community garden. Truly a great addition to our accolades called Kudos Homes and Gardens!

by Lotus Lofgren

In all, we looked at over one hundred properties. Every weekend we would create etch-a-sketch lines across town, peering in broken windows, walking through abandoned yards where the grass grew past my knees, and sheepishly apologizing to current renters as we disrupted their day, tiptoed around their child”'s play things and wondered where they would go once someone bought the place.

The houses held stories, old stories that we would never know, and others more recent and potent; an orange home that had suffered years at the hands of absentee landlords, been foreclosed on and left its tenants homeless. They scrawled their anger on the lime green walls, words written with human feces and punctuated with urine, a two story white house with all of the upper unit windows blown out from a grease fire in the kitchen. I won”'t forget the charred women”'s shoes, still hanging on a rack attached to half a closet door. A yellow house where the previous owners– enraged at the bank that took their home from them, the same bank now trying to sell the house– had hidden a package of spareribs under the cupboards, months ago, and the smell of rotting flesh permeated the drywall. The bank didn”'t even try to clean it up.

We went, fully aware of our good fortune, to find our dream home. The housing crisis at its apex, for all its tragedy, had opened the door for us; two kids with retail jobs, a part time community college gig and little saved for a down payment. Yes, the bank told us, even we could buy a house.

We decided early on that we wanted a duplex. It made financial sense and we liked the idea of having neighbors close nearby. We were searching the far low end of the market; under 100K- as far under as possible. We were looking forward to having work to do, learning the ins and outs of rehab and making our home from the ground up. After looking around for a couple weeks, we put an offer in on a little green duplex in the Corcoran neighborhood that had been foreclosed on a few months before. We fell in love with the place and envisioned the work needed as a labor of love. We offered what our agent suggested; the asking price with the selling bank paying closing costs and waited with baited breath. A few days later, the answer came that our offer had been rejected in favor of a better one. Two months later, we drove by to see a For Rent sign stuck into the patchy grass and little to no visible improvement to the house.

After more searching, we put an offer in on a yellow duplex in Powderhorn. We placed what we felt was a strong offer of 8K over the asking price plus paying all of the closing costs ourselves. The next day, our offer was rejected.

After we lost the third house, a large white duplex in Phillips, we were so frustrated and heartbroken that we stopped looking altogether for almost a month. We offered $10K over the asking price, with us paying all closing costs, but were told it had been rejected for another offer. This time we inquired, and upped our offer $20K over the asking price. Our answer was that our original offer had already been higher than the offer that the bank took. The other offer, however, was in cash. The bank, already having lost money on the house, took the fastest way out, dumping the property and having done with it. No structural inspection contingencies, no rehab qualification, no buyers getting cold feet, no ifs buts or maybes. Gone.

I started to research our situation and found that we were not alone. The housing market had created a feeding frenzy for cheap investment properties, specifically for duplexes. Baby-boomers all over the city were cashing in their investments to buy entry priced rental property, doing minimum repairs, and renting them back out. Even worse were the investment companies some of which were staffed with full time employees whose sole job was to take advantage of the market by procuring new properties. This mass redistribution of homes from the hands of homeowners to the hands of investors and flippers, all happened completely legally, even understandably; ultimately, decreasing the ratio of owner occupants, the number of people who have access to entry level homes, decreases the accountability of the neighborhood. Even when owners spend the extra time, effort and money to ensure the quality of their rentals, long distance and corporate landlords take money outside of the community. This rash is amplified by the fact that it is occurring in neighborhoods already suffering from job loss and poverty. The current system deprives the community”'s own residents of the ability to own the homes in which they live.

We accepted the fact that if we wanted a duplex, we were going to have to fight for it. We expanded our search to upper echelons of what we knew we could afford, looked at houses so dilapidated that they would be far fetched to pass our loan inspection, and ventured far outside our original search area. We lost the first eight houses before deciding to employ a different strategy. The house had been foreclosed and purchased by an investment company three months prior with the intention of flipping the property. Our agent knew their agent and we were able to look at the house before the company had commenced work. We offered 30K more than the company had paid three months prior for the house as-is. We finally got our home.

Organizations such as HRC, have done wonders at distributing funds to help perspective buyers in south Minneapolis neighborhoods. Programs that offer down-payment assistance, and matching grants for necessary repairs have undoubted sway in shaping our neighborhoods; dictating which areas will attract new buyers, and in some cases whether homeownership is even possible. Despite this headway, if cash offers by investors continue to be allowed to compete with conventional loan proceedings, it will be a slow road to increasing owner occupancy rates in any neighborhood with high numbers of multi-family buildings.

Currently, Fanny Mae gives buyers with intent to owner occupy a 15 day priority over investor offers. If we are ever to change the tide and make home ownership a realistic option for the majority of our community”'s residents, we must expand legislation to favor owner occupants and first time home owners in ways similar to that of Fanny Mae.

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One Response to “An urban first home for roots, commitment, and creativity A Community Investment”

  1. Amy Arcand says:

    Welcome to the neighborhood Lotus and Ian and I hope that you find your new home and the neighborhood worth the wait. Thanks for sharing your story. Please let us know if you have any questions about the neighborhood.

    Amy Arcand
    Executive Director
    Corcoran Neighborhood Organization

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