St. Paul soon to launch forgivable housing loan program for former Rondo residents

Joan Thomas was in her early 20s when her parents and grandparents were forced out of their homes in St. Paul's Rondo neighborhood to make way for the construction of Interstate 94.

They received low offers, which they accepted, fearing eminent domain was the only alternative. Hundreds of other families in the thriving, tight-knit community, the hub of St. Paul's Black population, faced the same situation.

"A lot of people back then either owned their homes outright or their mortgages had been significantly reduced over the years," said Thomas, 80. "Many found themselves, at an older age, having to get debt and try for mortgages again. The government didn't care about that. They didn't even think about that."

Decades later, St. Paul is about to launch a program aimed at rebuilding some of the wealth Rondo families lost. The Inheritance Fund, billed as a cornerstone initiative of Mayor Melvin Carter, will offer forgivable loans for down payments or housing rehabs to income-qualifying descendants of those who forfeited property when the freeway was built.

"Public apologies for Old Rondo aren't enough. We need the public resources to build back the wealth that was taken," Carter told a crowd at the St. Paul Winter Carnival's first annual Rondo Night on Thursday, to cheers from the audience.

Many with roots in the Rondo neighborhood say while they are cautiously optimistic about the opportunities the Inheritance Fund could create, they remain somewhat dubious that the funds will reach the families who deserve them. Inaction over the years, coupled with the fact that some view simultaneous city reparations proposals as competing, has led to skepticism of government promises.

But the Inheritance Fund has a powerful advocate in Carter, a 44-year-old who became St. Paul's first Black mayor in 2018 and is a self-described product of the Rondo neighborhood. His grandfather owned multiple properties that were torn down for highway construction.

"The idea is that this will go to someone who, theoretically, would have been in the line of inheritance to receive a property that was taken," the mayor said in an interview.

Former Rondo resident Nathaniel Khaliq, who remembers his family being forcibly removed from their home in September 1956, says the initiative is long overdue.

"We lost generational wealth. Our socioeconomic, our political structure was totally dismantled," said Khaliq, 79. "The moral fiber that kept us together as a community was totally destroyed. And there was never any real effort [to make amends] on the part of the people that were responsible for that."

Who is eligible?

Rita Burch was born shortly after her family was forced out of their Rondo home. They moved to a nearby townhouse. Due to redlining policies and discriminatory loan practices, it wasn't until around the time she entered high school that her family purchased land to build a new house, Burch said.

Now 62, Burch, a Minneapolis renter, has been keeping an eye on St. Paul's housing market for more than a decade, hoping she might be able to one day pass on a home to her 26-year-old son.

Through the Inheritance Fund, the direct descendants of Rondo property owners could be eligible for up to $110,000 in down payment assistance or $120,000 for housing rehab projects in St. Paul. Those loans will be fully forgiven if property owners stay in their house for 15 years.

The fund builds upon existing city programs designed to provide housing assistance to low-income residents. Rondo residents seeking funds must still meet income eligibility requirements to ensure the money is going to those who need it most.

Money will be awarded on a first-come, first-serve basis, said Tara Beard, St. Paul's housing director. The Down Payment Assistance Program likely will have $2.6 million to allocate once the City Council votes to approve a transfer from the city's Housing Trust Fund later this month, and the Housing Rehab Program has about $870,000 in federal Community Development Block Grant dollars. City officials hope to add funds to the program over time.

Those who wish to apply will work with the city's loan specialists once they are approved for a private mortgage. The city will work with the nonprofit Rondo Community Land Trust to verify the ancestry of potential loan recipients.

Applicants will be required to sign a notarized affidavit saying they are the direct descendant of a specific property owner who lost land in Rondo. Beard said the city has research and data to help verify those signatures and avoid fraud.

Burch plans to take a close look at the program when applications open, likely later this month, and apply if she's eligible. She likes the thought of purchasing property in St. Paul, but has concerns that the program has "a few too many barriers that may not actually allow people to take advantage of it."

"Bottom line, the program really has to do what it's saying it's going to do," Burch said. "Otherwise it's just a waste of everybody's time. You're getting people's hopes up for something that isn't really going to happen."

'A first step'

The term "reparations" often pops up in conversations about the Inheritance Fund, particularly as the city prepares to convene an unrelated advisory commission that will recommend policies to make reparations to Black descendants of slaves.

But Carter said he thinks it's important to make a distinction between the two efforts.

"While we associate Rondo with our African American community, the targeting of this program is not race-based. It's based on which families felt that kind of disproportionate sting of the economic injustice that was created when we built the freeway," the mayor said, referencing a 2020 study that estimates the community lost $157 million in home equity to I-94.

There is little precedent for the Inheritance Fund. Evanston, Ill., launched a housing program in 2021 that provides $25,000 grants for mortgage assistance or housing rehabs to Black residents affected by the city's discriminatory housing policies from 1919 to 1969. The program has been slow to roll out: At least five would-be grant recipients died before their reparations were dispersed, according to the Washington Post.

Thomas — who plans to explore whether she might be eligible for a housing rehab loan to help with painting, a plumbing update and a garage renovation — wonders how the city will spread the word to descendants of Rondo, some of whom are scattered across the country.

"I have a lot of questions," she said.

Trahern Crews, a leader of the separate push for reparations in St. Paul, said he has concerns that community members could view the two efforts as competing — or that it could be challenging for people to know which programs are accessible to them.

"But I think anything where they're trying to get people housing is a good thing," he said of the Inheritance Fund.

Keith Baker, executive director of the nonprofit ReConnect Rondo, is leading another effort aimed at righting the wrongs caused by the construction of I-94 with a proposal to build a 21-acre land bridge over the freeway that would house an African American cultural district.

"I think [the Inheritance Fund] is a first stage, or a first step, that can be built upon," Baker said. "We can't say that $2 million is going to solve all problems, but it's a good pathway."