Working households continue to have limited choices in where to live Families across the Twin Cities are finding it harder than ever to afford a place to call home. Housing production in our seven-county region dropped again in 2024, pushing vacancy rates down and costs up. The shortage hits hardest for working families earning up to $66,200 a year – those who keep our communities running but are increasingly priced out of them. In October, Metropolitan Council researchers reported total housing production in 2024, based on annual building permit survey data. Key overall production data for 2024 Total new units: 12,429 units produced, down nearly 20% from 2023 Multifamily units (buildings with five or more units): 5,428 units produced, a steep drop of 65% in just two years Detached homes: 5,068 units produced, a 16% increase from 2023 Townhomes: 1,811 units produced, about the same as 2023 Upward trends for affordable housing, though big challenges remain A bright spot in the data is the increase in the production of homes affordable to households earning less than median income in the region. With grant support from the Met Council and other funding partners, developers have: More than met the annual need in this decade so far for housing units affordable to households earning 51-80% of area median income ($66,201 to $104,200 annually for a family of four). Almost met the annual need in this decade so far for households living on 31-50% of area median income ($39,701 to $66,200 annually for a family of four). In the last three years, increased production of deeply affordable housing – units that are affordable to those earning up to 30% of area median income, or less than $39,700 annually for a family of four ($19/hour for full-time work). While the increase in deeply affordable housing is welcome, it masks a large, long-term gap between the number of units needed and the number of households who need them. Since 2021, the region has produced about 1,900 fewer deeply affordable units per year than are needed to meet this decade’s need. The gap is especially large in suburban and suburban edge cities. And these numbers don’t take into account the deficit of affordable housing production from previous decades. Met Council action: Our strategies to address the need Since 2021, the Met Council has prioritized Livable Communities grants for the development and preservation of deeply affordable housing, as well as affordable homeownership opportunities that address racial disparities in our region. As part of the Imagine 2050 regional development guide, we are also working across the organization to explore aligning other Met Council financial incentives to support deeply affordable housing. In addition, we are creating a toolkit for local governments to highlight strategies for affordable housing production that have been successful in this region and elsewhere, for launch in 2026. We are also using federal funding from 2023 to help cities leverage land use, zoning, and policy changes to create additional affordable housing. “When people can’t find housing they can afford their economic security and overall well-being suffer,” said Lisa Barajas, director Community Development at the Met Council. “They are forced to make trade-offs between paying their rent or mortgage and other daily essentials, like food, medical care, and transportation. Deeply affordable housing is essential for people working full-time at minimum wage, as well as many older adults, people with disabilities, and people who recently have been homeless.” The key reason for the lack of deeply affordable housing production is simple: Rents affordable to the people working in jobs that pay low wages do not cover the costs of building and operating housing. In recent years, especially, the costs of construction and labor, interest rates, and supply chain issues have all made deeply affordable housing even more challenging to build than in the past. Determining the need for affordable housing Under state law, the Met Council is required to determine the future affordable housing need for the decade based on forecasted growth in households living on low incomes, existing affordable housing stock, and proportion of low-wage jobs compared to residents working in those jobs. The Met Council then allocates a share of the overall need to all communities expecting household growth in sewer-serviced areas. Cities aren’t required to create enough units to meet their share of the future need but must plan for the possibility of these units by guiding sufficient land at higher residential densities. Production looks to be rising in 2025 Housing First Minnesota data show that the number of multifamily permits so far in 2025 has increased slightly since 2024, suggesting that the rapid drop has stabilized. The Met Council continues to monitor these trends closely as rents in the region continue to increase at one of the highest rates in the nation. Want to learn more? Dig deeper into the data and the Met Council’s current actions by watching the recent presentation to the Community Development Committee. (Discussions relevant to these housing issues begin at the 22:55 mark). Posted In: Housing