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Developers Using Affordable Housing Tax Credits to Build Homes For Rich Whites

Affordable Housing in Minnesota

In some states, such as Minnesota, it appears that housing developers are being allowed to use Affordable Housing Tax Credits to build home for wealthy white families. “Subsidized housing in Minneapolis is creating new and greater segregation,” claims a report from the Institute on Metropolitan Opportunity at the University of Minnesota. Developers in Minneapolis and St. Paul are being allowed by the city to build "affordable housing," using affordable-housing tax credits and city loans, but most poor families can't afford them. The units are more than 80 percent occupied by whites.

Whites only apartments?

They are called POSH developments, Politically Opportune Subsidized Housing, because they are occupied by mostly white artists. The units include a penthouse resident lounge, a fitness center, a yoga studio, free wi-fi, dishwashers, and studios for painting, pottery, dance, and music. But they are priced just beyond the reach of the average affordable-housing tenant.

The loophole

Developers are taking advantage of the city's tax credits and loans to build "affordable" housing that only white artists can afford. How do they do this? They price the units so that only white artists, who have incomes below the median for the area but above the average affordable-housing tenant, can afford them. They set the rents at the highest level, and also require application fees and reservation fees. All this makes it unaffordable to very low-income families.

Against the law?

Study authors point out that the POSH practice violates Fair Housing Law because they restrict access by low-income minorities. Developers are using the city's affordable housing tax credits and building housing in high-income areas that make them out of reach by low-income families. In addition, they cannot screen by race, but they are allowed to screen by profession. For example, some require residents to submit an application that includes a portfolio or some other proof of artistic pursuits, and even an essay and an interview with a screening committee.

Are they violating the law? You decide.

Read more at www.theatlantic.com/business/archive/2016/05/affordable-housing-for-white-people/483444/

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