Messages from the Council Chair

A troubling housing trend

June 2019

It’s Economics 101: lower supply and increased demand leads to higher prices. It’s also a good description of the Twin Cities housing market right now, and for the foreseeable future.

Council Chair Nora SlawikThis is a troubling trend, not just because it’s making housing more expensive for everyone. It’s also making our region less fair and equitable.

Rising housing costs literally price people out of their ability to choose where they will live, educate their children, and even get jobs. For some families, it means choosing between a roof over their head or getting the medicine they need or enough food.

The cost of housing was highlighted this month when the Met Council’s Housing and Redevelopment Authority joined with HRAs in Minneapolis and Saint Paul to open their waiting lists for the Section 8 Housing Choice Voucher Program. This program caps rent payment for a household with a low income at 30% of their income; the difference is made up with the federal voucher.

The Council provides housing for 7,200 households in Anoka, Carver and suburban Hennepin and Ramsey counties. After being closed since 2015, Metro HRA’s waiting list opened for a period of 6.5 days. More than 17,000 households applied for a spot on the waiting list, and only 2,000 were selected through a random lottery. Seven households were turned away for each one added to the list.

Demand for this program is high because housing costs are high and wages haven’t risen accordingly. In the last 20 years the population of the seven-county metro area has grown by 500,000 people; in the next two decades it will grow by another 700,000. That’s like moving the entire state of North Dakota to the Twin Cities.

Our multifamily housing market vacancy rate is 4.3% today, down from 6.6% in 2010 and well below the 5% rate that most analysts consider healthy.

As a regional planning agency, the Met Council can help cities and townships address their housing needs in their long-range comprehensive plans, but it’s up to those local governments to decide what specific housing policies and strategies they intend to pursue. As the Met Council reviews the plans, we will be able to gather new information about how municipalities are planning to address their housing needs.

While it’s too early to identify new housing trends in the comprehensive plans being submitted, there are some excellent examples of cities taking action. Saint Paul and Minneapolis are redeveloping sites like the former Ford Plant by the Mississippi River. These forward-looking developments will add hundreds of new housing units. Bloomington, Shoreview and other suburban communities have adopted inclusionary housing policies that ensure affordable housing will be incorporated in new housing developments.

We know that the region thrives when everyone has access to good housing. Children do better in school when their families have stable, affordable housing. People have better access to jobs and schools when their housing choices aren’t dictated by the cost of housing. Housing is the foundation of strong communities and is one of the Met Council’s top priorities.