A scare becomes a lesson: Richfield looks at ways to protect affordable housing

Fears that a for-profit developer might buy a large Richfield apartment property and price out its low-income tenants were eased this week after nonprofit developer Aeon said it was purchasing the complex.

But the close call gave elected officials and tenant advocates an opportunity at a City Council work session Tuesday to discuss ways the city can better protect its affordable housing in the future.

"There are these large real estate deals, and renters … whose lives are immeasurably impacted by those decisions don't have a voice," City Council Member Michael Howard said. "That requires us to show some urgency and be strategic."

Just days before the meeting, Aeon said it had entered into a purchase agreement with the owners of Seasons Park, a 422-unit complex in southeast Richfield near Interstate 494 and Hwy 77.

Aeon has built and renovated thousands of affordable units across the metro area, and Aeon President Alan Arthur said his goal is to remodel Seasons Park while keeping rents as close to current rates as possible.

"It was easy to make a decision to try and save it," Arthur said. "We're making a big impact with one fell swoop."

The Seasons Park sale was indicative of growing interest in the housing stock in Richfield — one of the hottest markets in the Twin Cities — and of the threats facing much of the nation's affordable housing, tenant advocates say.

At the work session, representatives from the Community Action Partnership of Suburban Hennepin and the Housing Justice Center shared more than a dozen ordinances and housing strategies the city could adopt. Debbie Goettel, a Hennepin County commissioner and former Richfield mayor, listed county resources that could be tapped by the city to help low-income renters.

One proposed ordinance would require property owners to give a 90-day notice of their intent to sell. Another would prohibit landlords from discriminating against Section 8 voucher holders, a measure that Minneapolis leaders approved last month.

Richfield Mayor Pat Elliott said it would be difficult for the city to help subsidize rents of cost-burdened residents, one of the options also discussed.

"We are a healthy, vibrant community but not necessarily wealthy," he said. "Subsidizing, from our perspective, is on the table but not, from my perspective, realistic."

Seasons Park is largely made up of low-income renters, many of whom belong to minority groups. The average rent for a one-bedroom apartment in Richfield is $975; in Seasons Park, the same space costs $780.

City officials were concerned that Seasons Park, owned by Colorado-based Forum Real Estate Group, would be sold to a for-profit developer that would raise rents and mandate stricter requirements for leases.

That's what happened in late 2015, when the purchase and renovation of the 700-unit Crossroads at Penn apartments — now known as the Concierge apartments — forced hundreds of low-income tenants to move out.

The switch from affordable Crossroads to upscale Concierge had a major impact on the Richfield school district. According to the district, 38 students were left without homes. To accommodate them, the district upped its services to homeless students by $77,000.

Following the Crossroads-Concierge transition, district officials had to rethink their finances and cut teaching jobs up front. The district is still recovering from the changeover, making a $2.3 million budget reduction in staffing next year to adjust for the loss of students.

"There would be a significant amount of students that could be impacted if something very similar to Crossroads-Concierge happened," said Steven Unowsky, Richfield schools superintendent.

Almost 240 children enrolled in Richfield public schools live at Seasons Park, according to the district.

Eric Hauge, director of organizing and public policy at tenant advocacy nonprofit Homeline, said Richfield city leaders should have looked at ordinances to protect low-income residents months ago.

"It's a conversation that should've been in full force by now, following the events of Crossroads at Penn," Hauge told the council Tuesday.

At the council meeting following Tuesday's work session, Seasons Park renters and former residents of Crossroads spoke warily about the future of the city's affordable housing, urging council members to take a stronger stand against developers with overly strict rental demands.

City officials agreed that Seasons Park needs to be upgraded. Former and current residents complained of old and broken appliances, dirty walls and halls and constant police activity. Goettel called the apartments "abysmal," the result of poor management.

The purchase of Seasons Park will be finalized by the end of the summer, Arthur said. Aeon hopes to receive funding from several sources, including government assistance and private investors, to renovate the complex and keep rents affordable.

"The proof is in the pudding," Arthur said. "We have to get enough capital in order to keep it a decent place."

Debra Behrens, Aeon's chief advancement officer, said that means Aeon will seek community donations.

Still, for some tenants the Aeon deal may not come soon enough to keep them in their homes.

Cristal Vargas, 34, has lived at Seasons Park for three years with her husband and three children. She said the apartment's management, without giving her good reasons, told her it won't renew her lease when it ends in June.

Vargas, in tears at Tuesday's meeting, said she has not found another option in Richfield and is thinking of moving her family to Minneapolis.

"I'm very sad, because I don't know what to do," she said.

miguel.otarola@startribune.com 612-673-4753

beatrice.dupuy@startribune.com 612-673-1707