Minneapolis and St. Paul both recently passed municipal minimum wage ordinances that were intended to lift up the working poor. In Minneapolis, the current minimum wage is $11.25 for large businesses, and that is scheduled to increase to $15.00 by July 1, 2022. The current minimum wage in St. Paul is the state minimum of $9.86. St. Paul’s phase-in starts in 2020, with a $15.00 minimum wage by July 1, 2022.
Even with these higher wages, it is still impossible to afford rent in each city.
The federal standard for housing affordability is 30% of income. While an arbitrary standard, it is most often used as the benchmark for housing affordability.
For a minimum wage worker in Minneapolis working 2,000 hours a year, an affordable rent is $563 per month. For a minimum wage worker in St. Paul, that figure is $493 per month.
On April 19, I created a map (see above) of median rents in neighborhoods of Minneapolis and St. Paul. I used KML polygon files from each city’s GIS office for the neighborhood boundaries, and merged it with corresponding median rent data from Rentometer.com.
The map shows what many would expect: high rents in the downtowns and wealthy neighborhoods, and low rents in marginalized neighborhoods.
The most expensive neighborhood of Minneapolis to rent was Downtown East at a median price of $2,045 for a 1-bedroom. In St. Paul the most expensive was West 7th at $1,325. The least expensive neighborhoods were McKinley in Minneapolis at $625 and Greater East Side in St. Paul at $788 for a 1-bedroom.
For studios, there were no studios in McKinley in Rentometer’s dataset. In Greater East Side, there were no studios in the dataset, but the minimum price of a 1-bedroom in the dataset was $500 at 1581 Ivy Ave E. Thirty percent of income at minimum wage is $493 per month.
Whatever your preferred policy prescription, the data is clear: rents are too high.
Of note: the Rentometer dataset is not a complete view of the rental market. It is unclear what the dataset includes, because the technology is proprietary, but Streets.MN commentators have said it likely does not include some rentals from the “missing middle” of duplexes, triplexes, and other mid-rise apartments.
Check out the median rent map on a new tab here.
What do you pay for rent or housing costs? What would you do as a policy-maker to bring down rents or increase affordability? Share your observations and your proposals in the comments.
Some good perspective. Thanks Conrad.
There’s the book “Nickel and Dimed” by Barabara Ehrenreich. It details her extreme struggles when she tried living on the minimum wage, yet somehow she missed the point that everyone else she met working for minimum wage had roommates. Maybe it’s OK that you can’t afford and apartment as one person alone making minimum wage. That certainly hasn’t been the norm, witness how common SROs were in the past or living with roomates is even for young professionals.
The solution is to find jobs for people to make more than minimum wage, something that is of course an enormous issue on the national level, but we haven’t done anything locally either. Maybe we couldn’t have anyway, but when Ford closed we didn’t even try to lure another manufacturing plant to the site. Meanwhile Minneapolis seems keen to try to chase any remaining heavy industrial jobs out of the city. Instead the cities are trying to dictate that someone’s labor pushing a mop or asking customers if they want fries is worth somewhat like that of someone making cars or forging steel.
Our economy is moving towards service-oriented jobs and away from manufacturing jobs. Especially with globalization and automation increasing, I don’t see that move reversing or even slowing down much. At best, luring manufacturing to the city is simply buying time.
People are expected to work many service-oriented jobs at hours and to an extent that only people who are working to support themselves/a family would be able to work them. If I want to be able to go to a restaurant or fast food joint at lunchtime, that worker will likely be someone who’s supporting themselves with those earnings. Same if I want to be able to check into a hotel overnight, or have clean floors at stores but not have someone doing deep cleaning when the store is open. Those jobs should pay enough for someone who works full-time to have a basic standard of living (roof over their head, food on the table, transportation to/from work, standard utilities paid, able to save for retirement, etc.)
A lot of service jobs are arguably needed, but don’t pay well. People get twitchy about paying the person handing the latte out the Carbucks window a bit better because of biases about product cost or education, but they also would melt down if that person weren’t there to hand off the latte.
If a service is worth having people perform the service, it merits a living wage. The ‘minimum’ wage is a stupid artifact.
I think it would make far more sense to tie the minimum wage to a certain multiple of the current median 1br rent of a given city rather than have constant updating to a certain dollar amount.
For some more perspective, the minimum wage when I got my first apartment in 1973 was $2.00/hr, making the affordable 30% rent limit $105/month. My old, one bedroom Grand Avenue apartment was $215/month which was about as cheap as they got in those days. At that time my salary was $600/month working as an industrial chemist which put my rent in the affordable 30% range.
So 45 years ago the minimum wage came no where close to providing enough money to afford rent. And it took a main stream, degree required corporate job make an entry level low rent apartment affordable.
It really hasn’t changed that much.
I’m a bit curious as to how rentometer pulled their rates (or how the addresses/rents in each area were determined.) The Hamline-Midway area seems higher than I’ve seen most rents even at “corporate” or larger apartment buildings (in fact, I can’t think of a 1br apartment in that area that commands $1255/mo.) Given that the median in Union Park is $925 even with Vintage on Selby driving up the median makes me wonder if the data is somehow not granular enough to properly account for this level of neighborhood variance, or if it just is an outlier for those couple of instances.
I agree with Tom. I moved here in 1978. I had to have 1.5 jobs ( about 60 hours ) in order to live by myself. I had room mates for my first two years here. I was a bartender, making minimum plus tips. It never occurred to me to ask the government ( or anybody else ) for cheaper rent. The issue is simply the Twin Cities is a very desirable place to live. You can only build so much. When demand outstrips supply, prices go up It doesn’t matter what commodity you are talking about.
I have mentioned before on different sites there are tons of neighborhoods on the north side where a type of development ( like Heritage Park in Minneapolis ) could be built. Section 9 housing dispersed with market rate. It is a great success and in high demand. The 2040 comp supporters all said in unison, that’s great but we don’t want to live on the north side. Why not? Who says you have a “right” to live in the more expensive neighborhoods if you can’t afford it? You can’t buy a house in San Francisco for less than 1M. So should the city start buying these houses and renting them for cheap to people who can’t afford them? If the city/county is willing to partner with developers to build section 8 housing I think that’s a good plan. But for people who expect that to be available to them on the south and west side of Minneapolis is not realistic.
One last thing, why can’t people get roommates or an additional part time job? Like everybody used to do?
As the government artificially restricts what can be built (i.e., zoning), seems reasonable to ask them to allow more to be built.
Also, Heritage Park – a totally suburban design – from the outside doesn’t seem to be working out that well as much of it remains unbuilt.
More subsidized housing is definitely needed, but the lowest hanging fruit is allowing people to build more housing.
Well, in part because some cities are making that illegal.
Occupancy limits in the Minneapolis zoning code are based on the city’s definition of a family. Zoning code allows up to three unrelated individuals can live together in low-density residential districts; in high-density residential districts, as many as five unrelated individuals can share a dwelling. In no residential district can the number of family members plus unrelated individuals exceed five. In St. Paul, in student overlay districts, it is 3-4 unrelated people per unit, which is higher than allowed outside the overlay districts.
Which makes that 3-bedroom unit illegal for 4 people, two of whom share a bed but aren’t married.
In 1991, when I moved out. I was 18 years old working at a fast food restaurant, making $3.35/hr. I didn’t have a car and all the furniture was free stuff I found in the classifieds, but rent was $315/mo for a 1br in Eagan. Living was thin, but without a car (tough ask in Eagan), I was able to make ends meet. It also helped I got free food while working. A year later, I got two roommates and switched to a 2-bedroom for $385/mo. I felt rich!
By 1995, events happened that I moved back into the same apartment complex. That same 1-br was $485/mo. Minimum wage had gone up to $4.25.
Do these 1 BR units in rentometer’s dataset include single bedrooms rented out in single family homes with shared kitchen/bathroom facilities? If not, or if we don’t know, then I’d argue that these metrics only have so much meaning to them. The vast majority of housing in the Twin Cities comes from single family homes.
I would need a lot of convincing to come around to the idea that 30% of 40 hours/week of minimum wage employment should as a rule cover the rent for a single adult not sharing an apartment.
We just plain need wage income to go up cross the board. good luck getting it done without empowering the labor movement.