Schafer Richardson’s Timber and Tie multifamily development fulfills a major need in downtown Minneapolis: The project, which offers 175 studio through four-bedroom units in the city’s Northeast Arts District, is not only an example of much-needed affordable housing, it’s geared toward families.
Timber and Tie’s larger apartments – those two- through four-bedroom units – give families with lower incomes the opportunity to rent in downtown Minneapolis. That’s a rarity: Most affordable multifamily developments in the Twin Cities, and most rental buildings in general, are filled with studio and one-bedroom apartments.
Katie Anthony, director of development with Schafer Richardson, said that the reaction from renters to these larger units has been positive, evidence that there’s a strong market here for affordable, family-focused multifamily housing.
“Most of the market-rate apartment buildings here are skewed toward small studios, micro units and one-bedroom units,” Anthony said. “It’s not easy to find larger units. But we have seen strong demand for three- and four-bedroom units.”
How strong has demand been for Timber and Tie? Anthony said that the project is already 70 percent leased. That’s impressive considering that Schafer Richardson only obtained Timber and Tie’s certificate of occupancy two weeks ago.
Schafer Richardson had also scheduled plenty of showings for the building’s remaining units. Anthony said that the company’s goal is to reach 100 percent occupancy by the end of this year.
Another reason for the demand for units here? Timber and Tie looks and feels like a higher-end building. In addition to its residential units, the property includes an art gallery and a stand-alone marketplace. It also includes a fitness center, outdoor playground, pet park, community room, kids’ playroom and onsite management.
These are the type of amenities most renters expect in higher-priced developments, not in affordable housing.
“If you went into the building, you wouldn’t be able to tell that this was an affordable development,” Anthony said. “The only difference? We have those bigger units to serve families, and you don’t see those often in most market-rate or higher-end properties. Our goal was to design our spaces to focus on the wide range of ages we will have in this building.”
Timber and Tie is restricted to renters whose incomes are 60 percent of the Area Median Income, with 25 of the units designated for Project Based Housing Vouchers through a partnership with the Minneapolis Public Housing Authority.
Timber and Tie is Schafer Richardson’s third affordable housing project in the Twin Cities market. But it won’t be the last. Schafer Richardson was scheduled to open its fourth local affordable housing development at the end of August. That development, Nova SP, will bring 99 affordable rental units to St. Paul.
Schafer Richardson also plans to close on another site in Minneapolis that will become home to a multifamily development offering 163 more affordable units. The company, too, is eying another site in St. Paul that it hopes to close on next year. The development planned for that site will bring an additional 170 to 175 affordable multifamily units to the Twin Cities.
“There is a big need for affordable housing in this market,” Anthony said. “And there’s a big need for quality affordable housing. We pride ourselves on being a good landlord. We take care of our properties. We want to provide quality, durable, safe living environments. There is a significant lack of new quality affordable housing in the Twin Cities. And it’s not just that we lack affordable housing for families. We lack it all the way up and down the spectrum of renter types.”
Why is there such a lack of affordable multifamily housing here? Anthony points to the challenge of finding financing sources for affordable projects. There is a limited amount of tax-exempt bonds and the tax credits that go with them. This makes it difficult for developers to find the financing they need for these projects.
“It’s not always, do the numbers work? It’s often, will the financing be here to do this?” Anthony said. “Is the waiting list for funding sources three or four or five years?”
Anthony said that making financing easier to get would boost the number of affordable developments in the Twin Cities. The good news? Awareness has been building. There are efforts now underway to increase the amount of federal funding for affordable housing.
Amcon Construction designed and built Timber and Tie. BDH selected the building’s interiors, while Steven Scott Management will manage the property. Financing for the project was provided by Bremer Bank, the Greater Minnesota Housing Fund, Colliers, Metropolitan Council, Hennepin County, the City of Minneapolis, the Minneapolis Public Housing Authority, WNC and Peter Brodd.
In addition to the normal challenges associated with building affordable housing, Schafer Richardson also faced the hurdles thrown up by the COVID-19 pandemic. Construction on Timber and Tie began in March of 2020, when the pandemic first took hold of the United States.
“We were all trying to figure the lay of the land,” Anthony said. “At the time the pandemic first hit, we were doing site work. We weren’t in enclosed spaces and we had very few subcontractors on the site. We didn’t have any shutdowns, delays or COVID cases early on in the project.”
As construction proceeded, Schafer Richardson launched a contract-tracing program that allowed the company to quickly isolate any COVID-19 cases. Thanks to this, Timber and Tie never saw any delays in construction. In fact, the project delivered seven weeks early.