Razing Houses to Improve Housing Stock in the Twin Cities

South St. Paul's Housing and Redevelopment Authority buys and razes these types of properties as part of a program to clear old lots for new housing. Started in 1996, the Rediscover South St. Paul program logged its 100th new home built on lots cleared of dilapidated houses.

South St. Paul went into the housing renewal business because it could not count on the private housing market to remove dilapidated homes, said Mayor Beth Baumann.

Although renewal is happening on its own in cities like Edina, where developers regularly buy small older houses, raze them and build large new homes at a profit, in South St. Paul, where the lots can be as narrow as 40 to 60 feet, developers cannot build big enough homes to clear a profit if they have to buy, demolish and rebuild the houses on their own, said Branna Lindell, HRA executive director.

Looking for a solution, South St. Paul followed the lead of Richfield. That city began a similar program in 1990 and has by this time built 120 new houses.

The homes purchased by such programs are in really rough shape. The houses that can be saved should be, but this is a last resort for homes that would cost too much to bring up to code for it to be worth it. The HRA hears about homes that qualify for the program through city inspectors, neighbor complaints and Realtors.

For the first time the HRA has an inventory of nine lots for sale. On a 40-foot lot, South St. Paul requires that the purchaser build a split-level, a two-story house or a rambler valued at between $222,000 and $267,000, with finished living area of at least 1,290 square feet. On 60-foot lots, the city requires construction ranging from a $241,000 split level to a $293,000 two-story home. The new houses must be owner-occupied.