Housing Affordability Continues to Elude Too Many in the Twin Cities

By September 20, 2013Foundation Blog

Housing

WRITTEN BY CHIP HALBACH, EXECUTIVE DIRECTOR OF MINNESOTA HOUSING PARTNERSHIP

Access to affordable housing for low-income individuals and families is a critical strategy in the Foundation’s funding priorities. Since 2011, the Foundation has partnered with a number of local organizations to support policy efforts and systems change initiatives that lead to an increase in the supply of and availability of affordable housing.  Minnesota Housing Partnership is one of those partners, and its Executive Director Chip Halbach was asked to write a guest blog about the importance of this work.

Rents across the Twin Cities have reached their highest point ever and are still increasing — currently at a pace not seen in over a decade. This is the headline from the Minnesota Housing Partnership’s recently released quarterly report on housing in Minnesota.

With rental vacancies below 3 percent, there continues to be an upward push on the cost of rental housing. The average Twin Cities rent is already approaching $1,000. One in four Minnesota rental households is now paying over half its income for housing.

What does this mean for families and communities, and what is the response?

The impact is not always easy to see. For most Minnesotans, housing is still relatively affordable and the concerns of the past few years over sinking housing values have subsided. The plight of low income people enduring these high rents, however, is often out of view.

While not readily observable, these high costs are creating a lot of instability among lower income rental households. In part, this instability shows up in high homeless counts. Family homelessness in Hennepin County is up 17% this year, and is nearly three times what it was at the onset of the recession in 2006.

And there is a high cost being paid even by families who do not become homeless, but who are struggling to cover their rent. They tend to move frequently, which is disruptive to job and school performance, and/or end up living in unhealthy apartments in locations with high crime and low performing schools.

Of course, most people who are living in shelters, poor conditions, or who are moving frequently do so because there is a sizable gap between what they can afford for housing and the price charged for decent apartments. This makes for a challenging and expensive social problem.

Getting incomes to increase faster than housing costs is the best way to tackle this issue. But this will not happen overnight. Currently, the job categories with openings increasing the fastest post-recession are low wage and part time. Furthermore, a significant portion of those facing high housing costs are disabled persons, retirees and the elderly. These groups represent a rapidly increasing population for whom jobs programs are not a viable answer.

To tackle the problem of high housing costs directly, charitable or public funds can fill the gap. This support can come in the form of cash rent supplements or funds to make new housing affordable. It also can come in the form of short term grants and counseling to keep families, disabled persons, retirees, and the elderly in their housing through a period of crisis.

Apart from funding housing programs, local governments can step up enforcement of health and safety codes. It’s critical, though, that expanding the supply of affordable housing keep pace with code enforcement. Otherwise people become homeless or are forced to move without the hope of improving their housing quality. In addition, policies that give rights to tenants, such as those that enable tenants to stay longer in foreclosed properties, are particularly important when decent, affordable housing is so scarce.

Government at all levels has an important role in bridging the gap between income and housing costs, and nonprofits in Minnesota have oriented their efforts toward these different levels. These efforts have led to the City of Minneapolis’ supporting a housing trust fund, a funding source for affordable housing development. Housing Preservation Project and others have encouraged the Metropolitan Council to adopt a strong vision for fair housing. This past legislative session, Homes for All, an alliance of many agencies, was instrumental in convincing the Minnesota legislature to increase its investment in housing and homeless programs by $33 million. And at the federal level, our agency and Rep. Keith Ellison are initiating a community conversation regarding whether the majority of federal housing assistance – the mortgage interest deduction – can better be targeted to preserve the benefit for the middle class while extending the benefit to first-time homebuyers and freeing up resources to help renters.

A comprehensive approach to the housing challenges facing many Minnesotans is needed. This requires initiative and cooperation among various government agencies. For this to occur we must continue to raise awareness regarding how the increasing gap in affordability impacts the entire community.”

Chip Halbach is a founder and Executive Director of the Minnesota Housing Partnership (MHP). MHP convenes, guides, and supports developers, advocates, and community leaders who are committed to building equitable and economically strong communities. Over the years, Chip has worked as a housing developer, tenant and policy advocate, researcher, organizational developer and program administrator, and is a guest blogger for the Foundation.