Summer News Update

Dan Gregory June 22, 2017

Here are a few links to articles about the lack of affordable housing.

Twin Cities Public Television  recently produced a documentary called, Sold Out: Affordable Housing at Risk.  It recently aired on TPT and  is now available on their website, so you can watch it at your leisure:

1. The May issue of Governing Insider had an article called “The Missing Middle: Why can’t cities build enough affordable housing?

Affordable housing policy is a mess, not only in L.A., but also in virtually every affluent big city in the country. Most developers insist the problem is one of supply and demand. Build more housing, any type of housing, they say, and prices will fall as older housing stock “filters down.” In the view of many community activists, that’s nonsense. In their opinion, new high-end housing only serves to jump-start gentrification and leads to the elimination of older, “naturally occurring” affordable units.


2. From last week’s Star Tribune: Twin Cities home market tips into shortage, and buyers waste no time:

Many homeowners are staying put because they are afraid they won’t find a house to replace the one they’ve sold. And there are still plenty of baby boomers with the kinds of houses that are much coveted who have decided to age in place rather than downsize.

Homebuilders aren’t helping much, either. Though construction is on the rise, it’s not happening quickly enough to satisfy demand, especially when it comes to entry-level houses in the Twin Cities and inner-ring suburbs.


3. It's not just homes that are in short supply, so are apartments

Twin Cities home buyers aren’t the only ones having a tough spring. Renters are, too.

In another sign of the strong housing market, more apartments were rented than new units were delivered during the first quarter. Vacancies remain tight and landlords are raising rents.

From January through March, 1,180 new units hit the market across the metro, but 1,218 units were absorbed by renters, according to a new report from Marquette Advisors. That’s the strongest quarterly performance since 2011.

4. As Minneapolis debates raising the minimum wage to $15/hour, a study finds that you have to make $17.14/hour to rent a two-bedroom apartment.

There is nowhere in this country where someone working a full-time minimum wage job could afford to rent a two-bedroom apartment, according to an annual report released last week documenting the gap between wages and the cost of rental housing.

Downsizing to a one-bedroom apartment will only get you so far on minimum wage. Such housing is affordable in only 12 counties located in Arizona, Oregon and Washington states, according to the report by the National Low Income Housing Coalition.

You would have to earn $17.14 an hour, on average, to be able to afford a modest one-bedroom apartment in a safe area without having to spend more than 30 percent of your income on housing. Make that $21.21 for a two-bedroom home — nearly three times the federal minimum wage of $7.25.

The report details how much a household must earn to be able to afford rent in every metropolitan area and county in the country. Renters in the U.S. make, on average, $16.38 an hour.


5. Section 8 is a federal program that offers vouchers to low income renters.  However, landlords tend to reject applicants that have Section 8 vouchers. The Minneapolis City Council voted in favor of a new law which would prohibit landlords from refusing potential tenants with Section 8 vouchers.  Landlords are now looking at next steps:

A state trade organization for landlords is considering its next steps now that the Minneapolis City Council has unanimously approved a controversial measure prohibiting them from having a blanket policy against residents with Section 8 vouchers.

The measure amends the city’s civil rights codes to protect Section 8 voucher holders from discrimination. Section 8 is a federally funded program that pays a part of low-income residents’ rent.

The change has been about two years in the making, but proponent and City Council Member Elizabeth Glidden said it was “worth the wait.”

“Now we will no longer permit landlords to say ‘No Section 8 may apply’ [in rental ads],” Glidden said shortly before the council’s final vote on Friday. “This has been a tremendous barrier for a relatively small group of residents seeking housing, who have been denied a chance due to stereotyping and blanket rejection.”

Glidden added that the city is committed to reforming the Section 8 system in Minneapolis and to making it more customer-friendly.

Landlords have loudly voiced their opposition to the change, saying that their objection to Section 8 is not about the people, but the agency that administrates it, the Minneapolis Public Housing Authority. Critics say the agency’s handling of the program is so inefficient and frustrating that they would rather not have any dealings with it at all.


6. All affordable housing is government supported, right?  No.  There is a way to maintain and even increase the number of affordable housing units in the Twin Cities by using the market.  

Not all affordable housing is government-supported or subsidized.

Across the nation and in the Twin Cities, there’s also so-called “naturally occurring” affordable housing — by acronym, NOAH. Much of it includes modest but good-quality apartment complexes built between the World War II era and the 1980s.

We see such buildings all over St. Paul and the east metro, and market forces are affecting them and their tenants.

Good work is under way to allow the buildings to remain the homes of families who need them, including lower-wage workers and people whose housing options are increasingly limited in a shifting market.

A new fund will help preserve the affordability of 1,000 such unsubsidized rental units in the Twin Cities over the next three years.

Rachel Robinson of the St. Paul-based Greater Minnesota Housing Fund, which announced launch of the $25 million NOAH Impact Fund earlier this month, explains the market forces at work: Because of the cost of construction today, we don’t see “modest, relatively affordable workforce housing being built without subsidy.”