Roseville's housing strategy: asking residents to sell to Habitat for Humanity

When Thelma Boeder decided to sell her Roseville home of 45 years, she wanted the beloved three-bedroom rambler to go to another family — not a corporate buyer that would turn it into a lucrative rental.

"I read about out-of-state investors snatching up houses, and I don't like it one bit," said Boeder, 79.

But Boeder also needed a fair price for her house so she could live comfortably in her new senior co-op. Then a letter arrived from the city of Roseville, offering a way to do both.

Boeder is one of the first Roseville residents to sell to a housing land trust the city launched in partnership with Twin Cities Habitat for Humanity, guaranteeing her home will be rehabbed and sold to a qualifying family at an affordable price. The land trust has purchased four homes, and three more purchases are in the works.

"This partnership is unique when you factor in everything including the way we are procuring the properties, the way the city of Roseville is finding properties, their financial commitment and the creativity and collaboration both sides bring to the table," said Jessica Coyle, Habitat's land acquisition project manager.

Roseville's Economic Development Authority entered into the partnership with Habitat last fall, setting aside more than $1 million in community development block grants, EDA funds and federal pandemic aid to launch the program.

Roseville community development director Janice Gundlach said the city pursued a partnership with Habitat because the nonprofit helps buyers with all aspects of homeownership including financing, repairs and maintenance.

"Roseville spent a lot of time over the last few years getting affordable rental projects done," she said. "There was a conscious effort to pivot toward affordable homeownership."

The city and nonprofit initially struggled to find homes in a hot real estate market, putting in offers and losing out to other buyers. Then Roseville mailed 900 letters to homeowners whose properties were valued at $250,000 or less.

The first sentence laid out the goal: "preserving existing housing stock to maintain greater access to wealth building through homeownership." The letter also listed benefits to sellers, including a fair purchase price based on appraised value, no inspection, no contingencies, no closing costs and helping another family get established.

The letters drew some pushback, Gundlach said.

"We did get a couple of calls from people who received a letter from us asking, 'Why are you doing this? Why would you want to help those people?' " she said. "It was disappointing."

But ultimately, the city's appeal "jump-started the program," Gundlach said.

"We have seen mission-driven sellers," Coyle said. "A lot of sellers also see this as a good business decision."

The city has agreed to provide up to $80,000 as an affordability gap subsidy for each home purchased, rehabbed and sold to a qualifying family — those who earn 80% or less of the area median household income, or about $90,000 for a family of four.

Families would not spend more than 30% of their household income on a monthly mortgage payment, including principle, interest, taxes and insurance. The city's contribution and the mortgage do not cover the full home price, so Habitat raises funds for the rest.

To keep things affordable, families purchase the home structure, but the parcel is held in Habitat's land trust. If the family sells the home, they gain some equity through an equity-sharing formula with the trust. Homes in the trust can only be sold to income-qualifying families.

"We are keeping this unit affordable and preserving homeownership. That doesn't happen when an outside investor comes in and turns it into a rental," Coyle said.

Many of these mid-century homes need updates and repairs, and almost all of them have lead and asbestos. Habitat oversees that work, making sure they're safe and modern for new families.

Boeder, a retired archivist, said she opened her letter and was immediately drawn to the program. She was moved by the program's mission, she said, and liked that she didn't have to do any repairs, painting or staging to sell her house.

Boeder and her late husband bought the 1955 home on Roselawn Avenue in 1977 because it was close to his office. They raised their two children there.

"It was a delightful home in many, many ways," she said.

Habitat bought Boeder's house for $320,000 at the end of March, and crews are now in the midst of updates including removing asbestos floor tiles, replacing the furnace with an energy-efficient model and giving rooms a fresh coat of paint.

When the work is complete, Habitat will match the house with its new occupants.

Boeder stopped by her former home last week, visiting with volunteers who were painting and installing a new kitchen floor. She reminisced about painting the back porch a cheerful orange with her grandson, and her husband jumping for joy when the Minnesota Twins won the 1987 World Series, hitting his head on the basement bulkhead.

As she walked down the driveway after the tour, Boeder said she felt good about her decision.

"I am content," she said. "I hope there will be someone who likes it."