We know that Minneapolis and it environs have a historically, dangerously low vacancy rate. The proportion of homes that are for sale or for rent is far less than a healthy five percent, so renters and buyers compete for empty units, and sellers and landlords make more money than they would otherwise. We need more homes, so that everyone who wants to live here can.

Is the new housing we’re building going in the areas with the lowest vacancy rates? I looked at data from the American Community Survey and the City Assessor, and I’d say not really. Almost a third of the city’s census tracts (36 of 116) have an extremely low vacancy rate (below one percent), but less than a quarter of the city’s new housing was built in these areas. Most of the very tight census tracts built homes at a slower rate than the city as a whole.

Different neighborhoods face different obstacles to getting enough housing. In wealthier low-vacancy neighborhoods, like Lowry Hill and Lynnhurst, new housing is kept out by zoning laws that prohibit new apartments. Minneapolis 2040 was a big step toward breaking down this barrier. Once the Met Council approves it and the City of Minneapolis adopts it, people will be able to convert mansions into duplexes or triplexes, and teardowns can be replaced by multifamily housing instead of just detached houses.

But the comprehensive plan probably won’t result in more housing in low-income neighborhoods. Investors pass over poorer areas with few vacancies in Seward, Powderhorn, and Willard-Hay, even though there are sites with permissive zoning. This is because developers are drawn to higher rents in the proven markets in Downtown, Uptown, and by the University. Without public intervention, the market will fail to build more homes in poor neighborhoods with tight housing markets, resulting in frustrated buyers and vulnerable renters.

A nonprofit neighborhood-based community development corporation, Seward Redesign (disclosure: also my employer), is asking the City of Minneapolis for support to build mixed-income housing in a low-income, low-vacancy neighborhood, and City Council will vote on it on Friday, April 19th.