The current debates over the Minneapolis 2040 comprehensive plan and inclusionary housing raise some interesting ideas for consideration about the city and Twin Cities metro area overall. First, more housing at all levels of affordability is critical to the future of the city, not for the sake of density itself but rather the city’s ability to remain remotely livable. Second, a well-calibrated inclusionary housing policy is a workable idea but only a tiny piece of the overall housing picture that needs addressing. And third, it’s up to the metro area, not just the city of Minneapolis, to accommodate more affordable housing.
Let’s get inclusionary housing out of the way first. An informative Star Tribune article from October points out that a blanket inclusionary zoning policy would hurt the development industry in Minneapolis, and will have minimal impact on satisfying affordable housing demand. Alan Arthur of Aeon was quoted saying “We can’t argue policy tweaks.” When the executive director of an affordable housing non-profit questions an affordable housing policy as being problematic, we should take note. A MinnPost article from February 2018 better explains the developer’s perspective on the matter: housing is being built because lenders see it as a decent investment, not because it makes developers rich; mess with it too much and development could stop, which helps nobody.
More broadly, how is the city addressing the vast affordable housing need? The $40 million proposed by the City of Minneapolis is by all means necessary, but along with the $87.5 million allocated by Minnesota Housing announced in November, it will barely make a ripple in the huge pond of affordable housing need (the highly-regarded Low-Income Housing Tax Credit program only generates 60,000 to 120,000 units per year nationwide, depending on the strength of the economy). These and other sources of affordable housing financing must be expanded.
In 2006 the Met Council issued a report saying the Twin Cities would need to add 51,000 affordable housing units from 2011 to 2020. I’m proud to say my former boss, Tom O’Neil, researched and wrote the report. O’Neil is now a Vice President at Dougherty Mortgage, which released an affordable housing report in September 2018indicating that the Twin Cities will only create 21% of the required affordable units in this decade. We’re falling farther behind and not creating enough tools to catch up.
The Minneapolis Federal Reserve’s October editorial in the Star Tribune concludes that significant new housing at all levels of affordability is required. Furthermore, the Fed concludes that the “problem…is poverty itself; the solution is income support”. I ask this: post World War II United States housing policy supported significant housing production for a growing population, but isn’t it also true that wages supported those households’ ability to afford housing? Not only must there be an increase of affordable housing and wage assistance from government agencies, there must also be more market rate housing.
This is to say nothing about the likelihood that we’ll need to double or triple housing production in the next few decades, at least. Looking at the world today, the Met Council’s 2040 estimated Twin Cities population is very likely conservative. Considering the powerful combination of climate change and political instability, we should be planning for a population of at least 5 million by 2040, and Minneapolis just do it’s share. And so yesterday’s lawsuit against the Minneapolis 2040 is unhelpful to say the least. It’s time to accommodate more housing of all types while simultaneously investing in significant transit improvements.
Postscript – And of course, land use and transportation are intimately intertwined. The industry benchmark says households shouldn’t pay more than 30% of their income on housing in order for it to be affordable. The Center for Neighborhood Technology’s H+T Calculator indicates that housing plus transportation cost shouldn’t exceed 45% of a household income, so whereyou live is very important as well. And thank goodness Southwest LRT is finally “on track“.
Wow I didn’t know they had our 2040 estimated population at 3,738,000. I just did a google and census estimates for ending 2017 was 3,600,000.
The Census probably uses an 11 or 13 county area, not the 7 county, as defined by the Met Council. 3.6 million is about right for the 13-county area.
This is a great piece. What’s been lost in the arguing about Minneapolis 2040 is the need for the entire metro area to be relatively affordable compared to peer metro areas to continue to be attractive for additional investment and jobs well beyond 2040. When the core of the metro is more affordable it drives affordability throughout the region, and Minneapolis 2040 is a great first step.
Interesting details about affordability. I didn’t know that LIHTC generated so few housing units nationwide. Any idea what Minnesota’s numbers are?
Just as Minneapolis is experiencing pushback by some residents against housing, density, & affordability (e.g., the lawsuit described in the article), Edina is, too. And, like Minneapolis, our city council is forging ahead with affordable housing initiatives, in our case an updated affordable housing policy and a recent comp plan update that allows an Aeon affordable housing project proposal to move ahead in the Greater Southdale District. The city is also looking at an affordable housing project in the 70th & Cahill node.
This is in addition to the 10-20% affordable housing units required in every new medium & large multifamily housing project. Our current city council firmly believes in affordability, and I hope our new council member will support these efforts next year.
I don’t have precise numbers on MInnesota, and the numbers vary annually because we get a $$ allocation and it shifts based on project costs. It also varies with the amount of money dedicated in bonding/budgets by the state legislature.
With those caveats, it’s accurate to say that we build or rehab about 2,000 subsidized homes/apartments total across the entire state of Minnesota in a typical year.
That’s important, and if we want everyone to have a stable place to live, we have to figure out how to get unsubsidized housing to be more affordable, too.
Thanks for the numbers.
Good point about affordability. In the great suburban expansion, housing was very affordable. But instead of direct subsidy, infrastructure was silently subsidized, such as roads and highways. Maybe that’s how we have to think about it.