City of Cohasset Recommendations, Strategies and Housing Market Opportunities Based on the research contained in this study, and the housing strengths and barriers identified above, we believe that the following recommendations are realistic options for the City of Cohasset. They are based on the following strategies: Be realistic in expectations for housing development - Although the City has added a significant number of new houses in recent years, this growth has been largely oriented towards lake shore locations. The scale of activities proposed for the future should be compatible with the potential growth of the City. Cohasset is essentially two distinct communities - When the town of Cohasset and Bass Brook Township formed the City of Cohasset in the early 1990s, a 36 square mile City was created. However, the original town of Cohasset, which represents approximately 20% of the City's population, is where a majority of the identifiable housing needs exist, and where most affordable housing construction activities will occur. The remainder of the City will continue to function as an affluent residential area. Protect the City's assets - Cohasset is the fastest growing City in Itasca County because of it desirability as a residential location. This is largely due to the natural amenities, including numerous lakes within the City limits. The City has taken steps to assure the long-term desirability of the community by establishing a planning and zoning department, working on a comprehensive plan, and conducting redevelopment and redesign activities in the downtown area. Access all available resources for housing - The City is working hard to attract new employment to the community, including the creation of an industrial park. To create affordable housing for workers, the City will need to draw upon other local resources including the Itasca County HRA, the Kootasca Community Action Council, IRRRB and the Blandin Foundation. To accomplish some of the activities recommended in this study the City will also need to access staff expertise to develop the programs and to seek appropriate funding sources. Recommendations The following recommended actions are not presented in any priority order. Because the City has already done a good job of addressing its most pressing needs, the number of recommendations for future housing activities are limited. 1. Develop a plan for the redevelopment of the blighted areas around the downtown The original town of Cohasset contains a significant number of deteriorated housing units. Our survey of housing conditions found that nearly 74% of the houses were in need of repair. Over 30% of the houses in the area were identified as needing major repair or were rated as dilapidated, and may be beyond repair. This area has a detrimental impact on the image of the City, and since it is located along the City's commercial district on Highway 2, it is a very visible portion of the community. The City should develop a plan that includes acquisition and demolition of severely dilapidated structures, rehabilitation of houses in need of repair, and affordable home construction on available lots in the area. This activity will probably require a number of different funding sources and agencies, including Minnesota Housing Finance Agency programs for acquisition and rehabilitation, IRRRB for demolition and clearance, Small Cities Development Program funds for rehabilitation and land preparation, and the Greater Minnesota Housing Fund's involvement for affordable housing development. Some of the other communities in the County have been able to offer affordable home ownership through modular homes on lower priced lots. In-fill building sites created through acquisition and clearance activities may provide appropriate site's for modular homes or other lower priced options. The redevelopment of the town of Cohasset will be a complicated program involving a number of different agencies. It will be important for the City to develop an action plan to accomplish this project, and to seek funding in a logical fashion. The City has been successful at previous redevelopment efforts, including the site of Edgewood Estates, the City's new 18 rental building. 2. Develop 12 to 16 units of moderate to lower rent general occupancy rental housing In 1998, the City added 18 units of market rate rental housing. This is one of the only privately owned rental properties constructed in the County within the last decade. The project has been well received in the local market, and was fully occupied at the time the rental survey was conducted. We believe there is a market opportunity to construct additional rental units in the City to serve a lower income group. Cohasset does not have any subsidized housing units. Although it is nearly impossible to construct "deep subsidy" rental units that allow tenant rent to be based on income, there is a possibility of constructing "shallow subsidy" rental units to serve the low and moderate income rental market using federal low income housing tax credits, IRRRB contributions and other resources. A tax credit rental project recently constructed in Grand Rapids was able to keep rent levels under $400 for two bedroom units, and under $450 for three bedroom units. This project leased quickly and has been very popular in the Grand Rapids rental market. A project with similar rent levels in Cohasset should prove to be equally successful. The major draw-back to the use of tax credits in this project is that the units will have income limits for occupancy. For tax credit projects that serve households at 60% of median family income, the 1998 income limits would be as follows: 1 person household - $17,040 2 person household - $19,440 3 person household - $21,840 4 person household - $24,300 5 person household - $26,200 6 person household - $28,200 For Cohasset households where there are two or more household members employed, these income limits may prevent occupancy. However, based on available income and wage data, these income limits should be workable for the large majority of renter households. Most tax credit rental projects are owned on a for-profit basis, and there may be developers in the area who would be interested in owning this type of housing. If this does not occur, there are models of tax credit projects where a public agency, such as an HRA, or a non-profit group is the general partner for the project. We would encourage the City to consider waiting before proceeding with this development recommendation. We believe that this rental project could work well as part of the downtown redevelopment project, and the City may be well served to plan that project with this development as a component. We would also like to see Edgewood Estates develop a longer occupancy history before additional units are added to the market. This building has been fully occupied for most of the year, but has been open for less than a full year. We would also like to encourage the City to wait and assess the future of the Technimar Plant. If this facility becomes operational, it will have an impact of housing demand. 3. Monitor the need for senior housing Cohasset has not traditionally had a large senior population, although there is evidence that older senior households may move out of the community to look for housing options that do not currently exist in the City. The construction of Edgewood Estates has provided high quality rental options for area seniors within the last year. According to the building's owner, approximately 70% of the current tenants are seniors. As the City continues to grow, and the number of seniors in the City and the Market Area increases, we would see Cohasset as a desirable location for a market rate, senior designated rental project. However, with the construction of 18 units in the City within the last year, we would not recommend the development of senior units at this time. 4. Examine the potential of sewer and water system expansion for the development of affordable residential lots Cohasset has established itself as a desirable residential community. Other communities near Grand Rapids, including Bovey and Coleraine, have had success in attracting housing development by the creation of lower priced residential lots. The sewer and water system in Cohasset only serves a small portion of the City. The system should be evaluated to determine whether services can be extended to create new residential building sites. Although Cohasset has the potential to attract new, modest price housing construction, the scale of this potential development will be limited, and the costs associated with extending municipal utilities would need to be carefully evaluated. 5. Promote and access all programs that assist with home ownership Home ownership is generally the preferred housing option for most households and most communities. Home ownership provides for community stability, improves housing quality and strengthens the tax base. As discussed previously, the demographic make-up of Itasca County and the Cohasset area will be conducive to the promotion of home ownership. In addition to the development ideas already identified, there are a number of other strategies and programs that can be used to promote home ownership in Cohasset. First time home buyer assistance and home ownership training programs can help the community address affordable housing issues. While the City has a smaller supply of affordable houses than in most of the neighboring communities, there is a supply of houses that are price eligible for these assistance programs. The home value estimates used in this study indicate that nearly 40% of the stock currently is valued under the $73,100 purchase price limits for the first-time home buyer assistance programs. Home ownership counseling and training programs can also play a significant role in helping marginal buyers achieve home ownership. The Kootasca Community Action Agency has been offering the Home Stretch home buyer training programs in Itasca County. While these individual home ownership assistance programs may not generate a large volume of new ownership activity, the combination of below market mortgage money, home ownership and credit counseling, and entry cost assistance may provide the mix of incentives that moves a potential home buyer into home ownership. 6. Develop a staff relationship with area housing agencies and other area communities While the City of Cohasset has effectively used volunteer efforts and City staff to plan and implement housing ideas in the past, the community will need staff resources to plan and implement many of the housing ideas advanced in this study. If they do not already exist, working relationships should be developed with the Itasca County Housing and Redevelopment Authority (HRA) and the Kootasca Community Action Agency. While these agencies do not have excess staff capacity to devote to any one city, their technical expertise should be accessed as needed to help the City of Cohasset address its housing needs. It will also be important for the City to look for opportunities to work cooperatively with other Itasca County communities to address housing issues. With the number of small cities in the County, and limited staff capacity at both the City and County level, cooperative efforts may be the only way to accomplish certain projects. For example in 1994, a group of cities in the County looked at a joint bond issuance for rental housing development. Recently some of the communities have jointly prepared and submitted grant applications. These cooperative efforts will not only make housing projects more practical, but they will often be more cost-effective and competitive.

Itasca County Housing Study January 1999