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Tuesday, January 18, 2022

Historic preservationists worry rent-control waivers could lead to demolition

Erin Hanafin Berg considers herself both a coach and a cheerleader for old buildings. In the late 1990s, the Minnesota native spent six years as a historic preservation planner for the city of Memphis before joining the Minneapolis consulting firm Hayes, Rois & Company as an architectural historian.

For the past 13 years, she has provided her expertise to a variety of roles within Rathos, a St. Paul-based non-profit working to support historic preservation across the country.

In Minnesota, every state dollar spent rehabilitating an old building generates some $9 in construction employment, property taxes, and additional investments, according to the University of Minnesota Extension Report for the University of Minnesota’s Department of Administration.

“It’s a money-raising proposition rather than a money-losing proposition,” said Berg, who served as Rathos policy director for the past five years.

Affordable housing in old buildings

Considering St. Paul’s oldest structures, it’s with a bit more trepidation that the burgh is studying St. Paul’s new rent-control mandate, and perhaps more importantly, a potential discount on the horizon.

Real estate developers, concerned about losing investor support, have urged St. Paul Mayor Melvin Carter to make exceptions for new construction, as many other cities allow. Carter has said he is ready to sign such an amendment if and when the city council approves it.

Berg said that depending on the structure of that modification, the impact on St. Paul’s oldest buildings could be catastrophic.

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To gain control of rents, developers will have more incentive than ever to rehab the city’s oldest structures rather than demolish them. And that, in turn, would have hugely negative consequences for both subsidized and non-subsidised, “naturally occurring” affordable housing.

“There’s a lot of affordable housing in older buildings,” Berg said. “A lot of older buildings have also been built into affordable housing.”

Her concerns are not just academic. State and federal historic tax credits are the primary way that old, vacant buildings such as the former Schmidt Brewery on West Seventh Street are renovated, often in coordination with low-income housing tax credits, to become affordable developments such as Schmidt Artist Lofts.

And St. Paul’s is known for its old structures. Much of the capital city’s housing stock was built between 1909 and 1958, and it’s kind of birthday is approaching. A middle-aged single-family home, duplex or triplex in St. Paul will reach the 100-year mark in 2022.

Developer Bill Bisanz, chief executive officer, Real Estate Equities, said, “If new apartments are exempted, there will be a huge push to tear down the old structure.” “The old apartments are the backbone of the housing stock. And when you look at affordable housing, it’s usually in older buildings.”

Preservation takes time and money

Tory Cooney / Pioneer Press

Former Pioneer Press Site, 345 Cedar St. in Downtown St. Paul. (Tory Cooney / Pioneer Press)

At 345 Cedar St., the former home of Pioneer Press in Downtown St. Paul, Bisanz and a previous developer spent years trying to structure the package, which led to a $54 million makeover of the eight-story, 1950s office building . Press House Apartment.

The alphabet soup of funding sources included the historic tax credit, federal low-income housing tax credits and conduit revenue bonds arranged through the city of St. The result, which began in 2019, was 144 income-restricted affordable units.

Qualifying for the historic tax credit required to get 345 Cedar St. on the National Register of Historic Places, a labor-intensive feat that took a 72-page nomination supported by the state Historic Preservation Office. And what aspects of the relatively nondescript office building could be considered historic, and which features could be eliminated or heavily modified during construction, were heavily negotiated in order to bring the state office on board.

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