New census data out today illuminates with detail the housing picture in the north Minneapolis tornado zone, showing the challenges facing that area of the city as it struggles to recover from the May 22 tornado.
Data for the three census tracts include the hard-hit tornado zone. About 47 percent of households in the tornado zone were occupied by homeowners, the remaining 53 percent were renters.
Comparatively, the Minneapolis rate of home ownership is 49 percent, while the remaining 51 percent rent.
While those rates are similar, the racial makeup of homeowners and renters in the tornado zone differs from the rest of the city, More White residents in the tornado zone owned their homes than Black residents. More Black residents in the tornado zone rented their homes. And more than half of household heads in the zone were Black residents in both owner-occupied and rental homes -- compared to just 16 percent citywide.
Leigh Rosenberg is research manager at the affordable housing group Minnesota Housing Partnership. She said even more striking than the racial differences are the income disparities made clear in poverty and income data from the Census Bureau's recent American Community Survey.
"The census tracts that got hit by the tornado already have been suffering from lower income and higher poverty," said Rosenberg.
Between 2005 and 2009, annual income for the four tracts affected by the tornado ranged from $28,000 to $30,000, compared to the median income of $46,000 for the rest of Minneapolis.
For homeowners in particular, in 2010 the income disparity was even wider: Homeowners in the tornado zone had annual incomes that ranged from $31,000 to $48,000. The Minneapolis median household income in 2010 was $69,000 a year.
This mirrors trends in other areas of the state, Rosenberg said.
"There is a huge, enormous disparity in the state of Minnesota in terms of incomes and homeownership for African Americans versus Whites so these are all pieces of what we are seeing," said Rosenberg.
But as north Minneapolis recovers from the May 22 tornado, the income disparity could create more hurdles for an area that was already recovering from an acute foreclosure crisis.
Minneapolis Foreclosure Recovery Coordinator Cherie Shoquist is helping to coordinate the city's tornado recovery.
"The income range being significantly less in north Minneapolis, is something that we knew just because of the value of the properties in north Minneapolis — that is where homeowners with incomes as low as these can purchase homes," Shoquist said.
Shoquist says many homeowners in the tornado zone were underinsured or lacked homeowners insurance altogether.
"Many of them pay in cash for a $20,000 home, but then perhaps not having it insured these are some of the challenges we are facing," Shoquist said.
City officials are expecting between $3 million and $6 million in tornado damage that likely will not be covered by private insurance, federal or state funding. The city is pursuing additional resources to help with the shortfall and already has secured about $1 million in rehabilitation funds from the Minnesota Housing Finance Agency.
A federal Small Business Administration disaster loan outreach center opened on the north side this week, where residents and business owners can apply for low-interest loans to repair or replace damaged property.
Homeowners can apply for up to $200,000 for damaged real estate. Homeowners and renters are eligible for loans up to $40,000 for damage to personal property. Businesses and nonprofits are eligible for loans up to $2 million.
This program kicked in after FEMA denied the state's request for individual assistance, but Shoquist expects many people on the north side to be turned down for disaster loans because they won't meet the income threshold. The city is looking at other ways to help people who don't qualify, Shoquist said.
State Rep. Joe Mullery, D-Minneapolis, whose district includes some of the tornado zone, says more assistance is needed for renters who were not insured. He says many low-income renters simply cannot afford to replace what they lost in the tornado.
"Something that works fine for a middle-income person may just be crushing to a poor person," he said.
Mullery said it's important to speed up the process for the city to acquire damaged properties where owners do not make repairs. He says this is key to preventing irresponsible landlords from buying up cheap, damaged homes and renting them out -- a cycle similar to what happened during the housing boom and bust on the north side that resulted in an abundance of problematic or unlicensed single family rentals.
"So that is an enormous issue, because we already have enough poverty level rental properties on the north side. Some of those neighborhoods have like 70 percent."
Officials say their goal is to keep responsible homeowners in the tornado zone and to develop more affordable, professionally-managed rental housing for families.