By Jake Rossen
By Jesse Marx
By Michelle LeBow
By Alleen Brown
By Maggie LaMaack
By CP Staff
By Jesse Marx
Claude Jones takes a while to answer a visitor's call from the lobby of his apartment building, even though he only lives on the second floor. During the wait, a visitor might notice the obvious benefits of living at the Greenhouse, an apartment complex perched on a corner where Hennepin Avenue runs into Lakewood Cemetery. Aside from being located in one of the more picturesque parts of the local urban landscape, just a stone's throw from Lake Calhoun, the Greenhouse's environs offer the kind of amenities that come with living on the outer fringe of Uptown: access to retail, a relatively low crime rate, and bus lines that literally stop outside one's door.
By the time Jones makes it downstairs to greet me, it's clear why such perks are essential in his life. A slight man of 65 years, he's stooped and walks with a shuffling, slow-motion gait. Since 1982, Jones has lived with the effects of a near-fatal car accident near his native Detroit, which include disabilities stemming from multiple back, hip, and leg fractures, along with chronic gastrointestinal troubles. Even so, Jones is game to lead a brief tour of the hallways of the Greenhouse en route to his neatly furnished, 550-square-foot one-bedroom apartment.
Just inside the front hall of the building, the place fairly gleams: new hardwood floors, new paint, new wooden doors with brass numbers. It's the result of a more than yearlong renovation undertaken by the new owner of the building, Financial Freedom Realty, which is in the process of converting its 72 rental units into condominiums. Soon enough, though, the hallway turns drab, revealing dingy white walls, wrought-iron staircase railings, and old, light-blue carpeting.
Jones, for one, is not entirely pleased with the makeover. Since he moved into the Greenhouse two years ago, his life had appeared to be settled after years of moving from one low-income housing unit to another. The apartment where he lives, Jones explains, only costs $688 a month, leaving him enough to live comfortably on a fixed monthly income of roughly $2,000. After the conversion, Jones says, his apartment is expected to sell for as much as $190,000, a price he can't afford. But Jones, along with a handful of other holdouts, is staying for now. There's presently a dispute as to whether the new owner properly notified the rental tenants of the looming conversion, and Jones is waiting to see how it shakes out.
"I'm going to try to stay as long as I can," he says, with some resignation, now seated in his living room. "I've made ties in this neighborhood, and this has been creating a lot of chaos and disorder by displacing a lot of people. Me, I'm just in limbo."
Jones isn't the only one. Over the past two years, more than 2,000 rental tenants of all sorts have been booted out of their apartments, the latest victims in a Minneapolis condo-conversion wave that has displaced young and old, poor and middle-class, healthy and disabled alike. The end result is that while downtown Minneapolis is seeing an unprecedented residential development boom—most of it in high-end properties—neighborhoods in other parts of the city are seeing radical transformations that by many accounts are unwelcome.
Condo "conversions" are different from most residential-property development waves. Except in those instances where the property being converted was originally nonresidential (think downtown warehouses), the conversions add no new housing stock to the market; they just turn rental units into privately owned homes. By most accounts, the local conversion trend of the past few years has stemmed from changes in the rental market during the larger real estate boom of recent years. In the late 1990s, rental vacancy rates in the metro dropped below 2 percent. The scarcity of rental units led landlords to jack up rents. That factor, along with the spike in the number of first-time home buyers, caused the rental vacancy rate to triple in just a few years, rising as high as 7.6 percent in 2003. Which in turn spurred many landlords to sell out to developers.
When a building is sold for conversion, tenants are, by state law and Minneapolis ordinance, given the first shot at buying their units, but for many middle- and lower-income apartment dwellers, that's cold comfort: After taxes, condo association fees, and insurance are added in, monthly payments on these upscaled condos can run up to three times the cost of rent on the apartments they used to be. For a lot of people, such a sale is effectively an eviction notice. Another common complaint about conversions is that the renovations are very often cosmetic rather than structural—a new kitchen counter here, some new windows there, rather than new plumbing or a new roof.
"There are many concerns we have with the issue," says Chris Geopfert, an attorney with the Housing Preservation Project (HPP), a nonprofit that tracks affordable housing in the Twin Cities. "One, you have the loss of affordable rental housing. Two, we're finding that tenant protections don't exist. Then you have the new buyers, who think that they're responsible for everything only within the four walls of their unit, and not the rest of the building. And you're seeing a profound effect on the neighborhoods and communities—an effect on the economic diversity of neighborhoods as well as people being displaced from their communities."