Association Resuscitation
Housing Improvement Area was neighborhood’s last chance By Carin Rosengren, CMCA | Keller Property Management
Before
for years. It was the cause of increased dues, reduced maintenance and deferred improvements for the past several years. The association’s decades-old wood siding had failed. Homeowners were facing water intrusion, not to mention the visual eyesore. No building was worse than the next, so a staged approach seem futile. The association needed all the funds at once. “It was pretty frustrating that we knew what needed to be done but were unable to raise the funds to do them,” said Anita Tayson, board president.
M
ocha, ivy, steel blue and granite: Until last fall, the board members and homeowners at a Twin Cities association could only imagine what life these colors would breathe into their neighborhood. Thankfully the aging association’s dream took shape in 2014, when the Niakwa Village 2nd Addition turned its sepia-toned association into Technicolor townhomes. This, thanks to the long hours and diligence of the board and management, who worked with the city and county to establish a Housing Improvement Area (HIA) in Lakeville. It was arduous at times but in the end, nobody gave up on the four-year process that got them here.
Something had to give In fresh snow up to their boot-ankles last winter, talking about gutters, cable wires, J-blocks and punch lists, a conversation between the contractor, construction consultant and property manager signaled that the end of this project was near. Mundane as they were, the tail-end details also thrilled the major players, because they represented the success of an $800,000 project that had seemed impossible. That winter day, the association was nearing completion of a siding, soffit and fascia project that had haunted the board
At the suggestion of a board member and after a moment’s research by the property manager, soon they corresponded regularly with City of Lakeville’s Director of Development, David Olson. With prior experience with the program, Olson guided Niakwa Village 2nd through the city’s first application for an HIA. An HIA application requires a majority vote of the association, so a straw poll and petition became the starting point for this project. “We held a number of meetings and also talked with virtually every owner, several times,” Tayson said. Many of the homeowners understood that something had to be done; that the association didn’t have funds to pay for it; and that the money will come from the owners regardless of the approach. The only other apparent options were a bank loan (denied), special assessment (a hardship) or alternative funding, such as the HIA. The majority of owners at Niakwa Village 2nd Addition ultimately gave their support. “The majority were in agreement that if we could participate in an HIA, that would be a great way to get done, at a reasonable interest rate, and to have the payments spread over a length of time that would make the payments doable,” Tayson said.
Process, procedure, application Housing Improvement Area: “A defined area within the city where housing improvements are made or constructed and the costs of the improvements are paid in whole or in part from fees imposed within the area.” The association can make improvements to common areas, structures, streets, sidewalks – basically whatever it would deem capital improvements. While Niakwa Village 2nd Addition started its HIA by working with the City of Lakeville, now the Dakota County Community Development Agency has authority to establish an HIA without city participation. However, not every penny-poor association will qualify. According to MN Statute 428A.12, the association needs to already have suffered rejection for bank loans and other means of funding. Combined with requirements, the association must demonstrate that without the HIA, the necessary improvements are not possible. In lieu of special assessments or a steep increase in homeowner dues – which can put strain on association collections and lead to an increase in delinquencies – the Board of Directors took on the task of garnering county funds through an HIA. This method allows the county to assess the homeowners through property taxes, where the responsibility for collection does not fall on the association. For an HIA to work, the homeowners need to start the process. At least 50 percent of signatures are required on a petition to the governing body that will administer the loan. Then there will be meetings with owners, with the county, with the property manager; and after that meetings with construction consultants, potential bidders, more meetings with the county, and continued on page 30
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Minnesota Communit y Living