New Housing Lowers Rents in Minneapolis; St. Paul, Not So Much

New Minneapolis Apartments

Some new Minneapolis apartment building websites, via a quick Google search.

There’s an ongoing and tedious debate about whether or not building new market-rate apartment housing helps or hurts affordability in US cities. The argument is tedious not because it’s an uninteresting question, but because nothing seems to change. “You can’t build your way out of a housing crisis,” on one hand; “we have a housing shortage and need new housing,” on the other. Meanwhile, each time a new apartment building goes up in a city, it becomes a target for people justifiably upset about the rising costs of housing. Meanwhile, the rich get richer and the poor get displaced.

The key problem is that rents keep going up, while incomes and wages stay flat. That’s been happening for decades in every city that has a growing economy. And always, thanks to gaping disparities stemming from generations of racist housing policies, the crisis is far worse for people at the bottom of the housing market. Anyone dependent on “naturally occurring affordable housing” (NOAH) is very vulnerable to market forces, such as house flippers, profit-seeking landlords, or even opportunistic buyers and sellers in a highly competitive housing market. No US city seems to have any real solutions that are lowering housing costs for people in desperate need. The housing debate seems stuck in a tragic impasse.

That’s why the latest data out of Minneapolis is a breath of fresh air. The short story is this: Minneapolis has built a lot of new apartments over the last five years, and now actual rents are finally going down, almost all across the board.

The latest report from a Twin Cities housing watch-dog, shared via former streets.mn board member Janne Flisrand, shows a remarkable decrease in average Minneapolis rents from 2019 to 2020.

Here’s the key slide:

 

Screen Shot 2020 06 27 At 3.34.19 Pm

Image: HousingLink

It’s probably tempting to look at these numbers and consider it an aberration. Surely something to do with COVID-19 or local economic variability or demographics or rising wages (?) or [insert theory here].

But that’s why the Twin Cities are an excellent example, because neighboring Saint Paul provides an ideal control group. The two cities provide as good a case study of how new market-rate construction affects housing affordability as you’re likely to find in this country. For all intents and purposes, the two neighboring cities are basically the same housing market. Most people buying houses in “the cities” look at both cities; it is the same with apartment shoppers. In general, St. Paul is around 10% more affordable.

Here is the rental data from Minneapolis (on the left) versus St. Paul (on the right). Note that rents are generally higher in Minneapolis:

Screen Shot 2020 06 26 At 5.40.02 Pm

Image: HousingLink. Rents have decreased from 8% and 13% for one- and two-bedroom apartments in Minneapolis. In Saint Paul, no change and 5% respectively.

 

Screen Shot 2020 06 26 At 5.41.31 Pm

Image: HousingLink. Note the differences in NOAH housing availability in the two cities.

 

Screen Shot 2020 06 26 At 5.42.54 Pm

Image: HousingLink. Metro Area Median Income (AMI) is $100,000 for a family of Four. It’s much lower in Saint Paul and Minneapolis. Note that, reversing long-standing trends, more homes in Minneapolis are now affordable at 50% AMI compared to Saint Paul.

To my eye, the gap in new housing construction between Minneapolis and St. Paul, which fellow streets.mn writer Alex Schieferdecker has been chronicling for years now, is striking indeed.

Mpls V Saint Paul Housing Starts

Housing starts in Minneapolis vs. Saint Paul, via Alex Schieferdecker. It’s about a 5-to-1 ratio.

St. Paul, population 308,000, added 4,600 new housing units during ten years of a booming economy; Minneapolis, population 425,000 built five times that amount.

Part of the difference is the hotter economy in Minneapolis, which is wealthier and has far more jobs near downtown and the University. But part of that is also differences in zoning and land use policies. Minneapolis has ended single-family zoning (though only recently), passed broad-scale upzoning, and has accelerated reducing and removing parking minimums. At the same time, they have instituted an inclusionary zoning policy (though only recently), passed renter’s rights protections, and instituted a higher living wage. Almost all of these changes were controversial at the time. In my opinion, doing both of those things simultaneously reducing zoning restrictions while empowering renters is the only way to effectively address the housing crisis that disproportionately harms people of color and the poor.

Over the next years, I’ll be watching these trends closely. It goes without saying, I hope, that Minneapolis has a lot of critical work to do around rethinking its police department. But when it comes to meaningfully increasing housing affordability — something that I don’t believe any American city has done — the data and the contrast with neighboring Saint Paul, shows that Minneapolis is on the right track.

Streets.mn is a non-profit and is volunteer run. We rely on your support to keep the servers running. If you value what you read, please consider becoming a member.

, , , ,

81 Responses to New Housing Lowers Rents in Minneapolis; St. Paul, Not So Much

  1. Sheldon Gitis June 28, 2020 at 3:51 pm #

    “Note that rents are generally higher in Minneapolis.” Duh, could it be that’s the reason the higher, less affordable rents in Mpls. have decreased slightly while the lower, more affordable rents in St. Paul have not?

    The affordable housing problem is much like the affordable health care problem. Lots of money that should be providing basic needs like housing and health care is getting siphoned off by real estate developers, property managers, insurance and drug cos., banks and other vultures.

    • Bill Lindeke
      Bill Lindeke June 28, 2020 at 5:01 pm #

      It’s all relative. And in the big picture. That’s the point here. But note that Saint Paul is now less affordable than Minneapolis at 50% AMI, according to the recent report.

      I’m trying to follow your analogy but I think it’s different. What is the health care equivalent of the general housing market, duplexes, SFHs, etc.? Why are those so expensive? Realtors = insurance companies?

      That said, I agree that market-based solutions are not equitable and do poor people zero favors. But in health care, there is a clear solution called Medicare for All or single payer, which are used all over the world. What would the housing equivalent be? Whatever it is, it would be far more difficult to create than a health care solution that works for everyone in this country.

  2. Karen E Sandness June 28, 2020 at 3:55 pm #

    If rents are going down, I’m not seeing it. In fact, I see them going up. I used to feel outraged at new construction of ticky-tack apartments with 1-BRs starting at $1500 a month. Now I’m seeing new construction with 1-BRs starting a $2000 and studios starting at $1500.

    I’m also seeing ads for “x months free rent with a one-year lease,” which should be an indication that the units are overpriced, but lower the rent? Never!

    • Bill Lindeke
      Bill Lindeke June 28, 2020 at 4:58 pm #

      Are you stating that anecdotally, or saying the recent data is wrong? To be sure, rents have consistently gone up despite wages staying flat for 10+ years. But it has recently changed, according to listings and housing research. That’s what the data from Housing Link says, and it’s very good news.

      This data is not simply new construction, which everyone seems to focus on. Instead, this is city-wide data, most especially NOAH housing.

    • Alex Schieferdecker
      Alex Schieferdecker June 29, 2020 at 7:11 am #

      This isn’t quite the right way to look at trends in rents.

      New construction is always going to be more expensive than buildings that already exist. Moreover, new construction is going to be focused on neighborhoods where demand is exceeding supply and rents are increasing.

      But that’s just a snapshot of rents in one area in a city. To get the full picture, you need to look at rents at the same or similar properties all over the city, over time, and also compare these numbers with inflation and with changes in median income.

      Short story is: new buildings in fast-growing areas are not indicative of overall rent trends.

      • Janne July 7, 2020 at 7:37 am #

        I disagree that there is one right way to look at trends in rents, and that it’s important to look at rents in a variety of ways. This looks at rents available on the open market.

        These reports are not limited to new buildings, although it may skew that way because there are many of them. There’s great value in knowing what people looking for apartments face.

        Their mission is focused on affordable housing, and as a result, they specialize in NOAH units and capture hard-to-get “shadow market” rentals including single family homes, duplex-fourplexes, and for-rent condos that other rent research reports typically skip.

        Details about this data and how they capture it/why are in this 5-minute video: https://youtu.be/J5UNQ2MA3nE

        I’d also argue that rents in new buildings affect rents in existing buildings — and I know you do, too. This year, I dropped my rents in part because my check on rents shows that they are dropping also in old buildings like mine. (See that old post, https://streets.mn/2015/03/17/how-i-set-apartment-rents/)

    • Steve Gjerdingen June 29, 2020 at 9:50 am #

      Karen,
      I think they should have special names for these types of properties that indicate their expectation for the profession of the resident who is able to live there. For example, “Lawyer Living”, “Phlux’s Physicians” or “Foundry’s Financial Officers”.

    • Scott Walters June 30, 2020 at 4:59 pm #

      Rents are definitely coming down. We track the Penfield obsessively, our old home, in Downtown St. Paul. After two years of ongoing increases, COVID has turned the situation, and rents are down by about 10 percent over the last month or two. I think this generally fits Bill’s data.

      • Bear little July 1, 2020 at 10:54 pm #

        It actually does not prove bills point made in the article based on rents going down because of the stopping of building of sfh or the building of more apartments. But As you mentioned the since covid19. The rent went down and you are in st Paul. I live in mlps and have already been told by management that when the mandatory rent freeze is over they will be rasing my rent yet again. And when asked why there has been such large rent hikes over the two years I was told by the management of the apartments that they were raising the rents to be more in line with average rent or the surrounding area.

  3. Rosa June 28, 2020 at 6:06 pm #

    I wonder how different Minneapolis is from other markets in building new housing where there previously was none? So much of the new apartment building is replacing might industrial or empty space, especially along the light rail.

    Now if we can also get a real commitment to public and supportive housing, tenants in the lower end of the market will have read choice and power the way mud market tenants do.

  4. Steve Subera June 28, 2020 at 8:32 pm #

    Bill, why do you think any of the differences in land use and zoning that you cite have anything to do with the ten year construction data differences from 2010-2019 for St. Paul and Minneapolis when those examples didn’t go into effect until 2020?

    • Bill Lindeke
      Bill Lindeke June 28, 2020 at 9:42 pm #

      It’s a good question. I am not as expert on Minneapolis zoning changes as I am on St. Paul, but I think it’s pretty clear that Minneapolis has been more aggressive over the last 5+ years about removing barriers to new housing. Parking minimums is a good example; Minneapolis did reductions on every transit corridor. (https://www.southwestjournal.com/news/city-hall/2015/07/council-reduces-minimum-parking-requirements-near-transit-corridors/) so that is spread all through the city. Saint Paul only has them along the Green Line.

      That’s just one example, I think there are more. Maybe other folks can fill me in. TBH there are not a ton of people, other than perhaps developers, who work in or are intimately familiar with both cities’ zoning codes. Another difference might be the civic process required and/or zoning and regulatory culture.

      • Steve Subera June 29, 2020 at 10:18 am #

        Thanks, Bill. I hope the city or someone is compiling the numbers on how many buildings have taken advantage of the minimums in the transit corridor. That seems like data that could show the impact of the minimums.

  5. Bear June 29, 2020 at 1:17 am #

    Yeah bill I think where you got your information is absolutely incorrect. The reason for the higher rent is to cover the ever increasing property taxes that continue to rise. Cause over the last four years my rent has constantly increased year over year. From 800 to over 1000 dollars since I moved. And if you think it is affordable to live mlps you (In my opinion) you are lying to yourself or believing in someone else’s lie. The number and information is skewed because of rent freezes and eviction halts do to covid. And to believe that stopping construction on single family homes is a good thing then you contradict you statement on racist housing policies. Because now people of color and the poor have the dream of being able to own a home taken from them. And forced to only be able to rent in the city and thus if they really want to buy a home they could afford it would have to be out side the city. in essences forcibly causing people of color the poor and disadvantage to move from a desired area to less desirable area so that only affulent wealthy persons can afford to live in the area is called gentrification. Which is a very racist policy.

    • Bill Lindeke
      Bill Lindeke June 29, 2020 at 10:15 am #

      The only way to stop gentrification is to bring rents down, which is what I am talking about here.

      You might be right that it’s due to COVID, but I think that’s why the comparison with Saint Paul is important.

      There are precious few examples of growing cities that have seen decreases in rents. The only one I can think of is Portland right before they passed IZ: http://cityobservatory.org/portland-rents-are-going-down/ That was caused by a boom of new construction in anticipation of regulation. Minneapolis, on the other hand, seems to have a more sustained pace of construction.

      If you have other US examples of rents going down in growing cities, please share. This data comes from HousingLink, an affordable housing and social services non-profit. You can read about them here: https://www.housinglink.org/AboutUs

      • Sheldon Gitis June 29, 2020 at 12:09 pm #

        If your argument, Bill, is that the recent boom in apartment building construction has created a glut of available units, resulting in some rent stabilization or a slight decrease in select locations, you might be correct. However, I think it is absurd to suggest that a boom in commercial real estate construction, followed by the inevitable bust, is any sort of solution to providing affordable housing. The construction boom has benefited investors, developers, construction contractors, property management cos. and other vested interests. It has not helped those seeking affordable housing.

        • Bill Lindeke
          Bill Lindeke June 29, 2020 at 1:46 pm #

          Replace the word “glut” with the word “more.” If you are a person looking for an apartment in Minneapolis right now, whatever has caused rents to go down 13% since last year benefits you quite a bit. That’s a meaningful amount.

          • Sheldon Gitis June 29, 2020 at 5:57 pm #

            Gone down 13% from what? The issue isn’t a trending decline or increase in rent. The issue is the affordability of housing. The acquisition of cheap, dirty, not very desirable commercial-industrial land for apartment building construction projects, a boom that appears to be on the verge of going bust, hasn’t made things better if you’re a low or moderate-income person looking for a nice place to live. The only people benefiting from the acquisition, development and construction Ponzi scam are the investors, developers, construction contractors, property managers, broadband providers and you name it interests that are making a buck building the shithole apartments. Renters are getting screwed, regardless of any recent trends you may wish to cite.

            • Pup Eberts June 30, 2020 at 10:03 pm #

              So what do you propose as a solution? Public housing?

              • Sheldon Gitis July 1, 2020 at 9:46 am #

                Whatever may or may not be best way for doing housing, a logical first step would be to recognize that it sure ain’t the commercial-industrial real estate development we’re doing now, tracking the Highway Department bulldozer with large, costly, apartment buildings.

                I believe basic shelter, like basic health care, is a human right, not a privilege, and should be publicly-financed. Call that “public housing” if you like. If you look at the money going into publicly-subsidized apartment building projects, I think you’ll find that the commercial-industrial real estate developers, property managers, construction contractors and others who are profiting from these publicly-subsidized apartment building projects are getting somewhere around $300,000/unit to build apartments with somewhere around 1000 sq feet, or less, of living space. Rather than giving the commercial-industrial real estate developers $300,000 to build a 1000 sq ft living space that then ends up in the hands of a property management company that rakes in significant fees collecting rent, I think it would make much more sense to take all that money that’s flowing into the pockets of the developers, investors and landlords and put it back into the pockets of the people paying the rent.

                I realize many younger people, of which I was once one, seeking to advance in their endeavors and explore different opportunities and locales, may not be interested in settling into one location for a long time and may prefer a short-term apartment rental to a longer-term home ownership commitment. So I’m not saying the rental market should, or will, disappear. However, at the present time, I think a lot of people are paying much, if not most, of their income for rent, not because they want to, but because they have to. They have no other choice.

                If someone can afford to pay $1500/month to rent a 1000 sq ft apartment, they could also afford $1500/month to own a 1000 sq ft home. People are renting because it’s the only game in town. It’s been a very profitable game for a very few very wealthy people, while very many people paying rent are getting squeezed dry.

                I think some sort of government home ownership policy – again, call it “public housing” if you like – where the $1500/month goes to a government agency that builds, en-mass, sturdy, intelligently-designed, low-maintenance, energy-efficient, comfortable SFHs is far preferable to paying $1500/month to a property management company that builds massive apartment building boxes at the end of freeway ramps.

                I, and I suspect most others, would much rather pay $1500/month to live in a sturdy, well-built, smartly-designed house surrounded by other very similar houses than a tiny apartment encased in 100-unit or more big box surrounded by more big boxes, highways and parking lots.

                • Monte Castleman July 1, 2020 at 10:48 am #

                  Although I usually don’t think it’s in the proper scope of government to be redistributing income or providing goods and services I find your idea intriguing since I acknowledge that there seems to be a clear market failure with few SFHs that the non-rich can actually afford. We can eliminate minimum lot sized zoning and the MUSA line, but that would probably not be enough to get developers to build affordable homes because they’d still make more money building McMansions.

                  So maybe the government should step in and build 1000 square foot homes on reasonably sized lots since banks and developers are not interested. With that size you could still fit three bedrooms, abeith small ones. My house is 1100 square feet with three bedrooms.

                  I’m not clear if the government would be a landlord or sell them off. If the government owned them you’d have the problem of people not having agency to take care of, maintain, improve, and plant gardens on their own property discussed in the comments a few articles ago.

                  If they were sold off, how would you prevent out of town landlords from buying them? If privately owned on small lots what about having an association to to lawn mowing and snow removal so each family doesn’t need a lawn mower and snowblower? How much, if any garage space would be provided with the houses?

                  • Sheldon Gitis July 2, 2020 at 8:58 am #

                    The government could build the homes with a WPA-like housing construction program and sell them exclusively to owner-occupants with a job. Mortgage payments would be 30% of the owner-occupant’s income. Those with higher incomes could own the homes, free and clear of the government loan, sooner, and those with lower incomes would have to make more payments over a longer period of time to pay off the loan. No Invitation Homes/out of town landlords – the homes would not be rentals. When sold, the homes would be made exclusively available to buyers who applied for and received the exclusive, owner-occupants only, government loan.

                    As far as parking and landscaping is concerned, I suppose it would depend on what people want. I’m sure many, like me, wouldn’t want or need any lawns or lawn mowing. Others, again including myself, probably could live without a garage, or wouldn’t mind parking in some communal space, where possibly some communal vehicles could also be located. It’s also possible that some sort of association fee could be included in the 30% of income mortgage payments, or billed to homeowners, that would cover communal maintenance like snow removal and groundskeeping.

                    • Monte Castleman July 2, 2020 at 10:41 am #

                      I’m assuming that the “no outside landlords” would be enforced by putting a right of first refusal into the deeds, so if a person puts it up for sale the government buys it back and then can control who they sell it to once again.

                      I could see more flexibility with parking that the standard “build a three car garage with every house” but I don’t think a remote lot is a good idea due to crime and perceived security issues.

                      Typically in situations where you have a lot that’s some distance from the housing (like the college my sister went to)criminals have a field day with auto burglaries and some residents might not want to walk from their car some distance to their house after dark.

                    • Sheldon Gitis July 2, 2020 at 6:00 pm #

                      The government buying it back and controlling who it’s sold to sounds like a good approach and a fair assumption. I suppose with parking and security/convenience, it would depend on how far the distance from the house and how many vehicles were parked in how large an area. I think a small neighborhood of small homes could probably include parking space that was much safer and more convenient than a remote location on a college campus where who knows how many vehicles are stored.

                • Bill Lindeke
                  Bill Lindeke July 1, 2020 at 11:54 am #

                  That’s fine. I think housing-as-a-right is the way to go and some sort of intervention that shifts the housing landscape would be great.

                  But in the real world of today not everyone wants to own a home.

                  Where your argument about apartments goes over the line is shaming, demeaning, or castigating of people’s homes, communities, or neighborhoods. Nearly every strong argument you have made about an apartment building by a freeway could be slightly modified and apply to the cul-de-sacs in Ham Lake or Lake Elmo. Some people buy houses in unwalkable areas with 3- or 4-car garages on large lots.

                  I find that to be nuts! Personally, I think those are terrible communities, built by wealthy companies like the Toll Brothers, with terrible climate impacts, perpetuating race- and class-segregation, and destroying greenfield land to boot. But you know, to each their own and millions of Minnesotans can’t be wrong, or whatever. Not everyone has the same wants and desires.

                  It’s possible to talk about housing and land use policy without making sweeping judgements about who lives where and why. Folks make choices to live in micro-unit apartments (500 sq ft for $1K a month or more; see https://www.minnpost.com/cityscape/2019/05/amid-a-national-tidying-trend-new-interest-in-micro-apartments/) and that is their choice. Often, they don’t want to buy a house. Or maybe they do, and there are no houses they want, or they are not ready to make long-term financial commitments. Who is to say if someone’s personal housing decisions are right or wrong?

                  We can, however, talk about the policy and zoning landscape that allows some homes to be built and denies the construction of others. And how policy decisions impact housing affordability, which is the focus of this post.

                  • Sheldon Gitis July 2, 2020 at 9:16 am #

                    I think your comments about the McMansions on the dead streets of Ham Lake and Lake Elmo are comparable to my comments about the big box apartment buildings alongside the highways in Shoreview and Minnetonka. I don’t disagree with either of our assessments, both of which are far from flattering to the housing choices some people make.

                    As far as my Dupes Place Apartments comment is concerned, it was in response to an earlier comment suggesting that the little apartments inside the big box buildings by the highways were some sort of exclusive, luxury lifestyle for high-paid professionals. Basically, my response was, if sitting out on the patio listening to the deafening roar of an Interstate Highway is your cup of tea, you can have it. That’s not any sweeping judgment, just my opinion.

                    Bill Lindeke thinks the Toll Bros. McMansions in Ham Lake and Lake Elmo are ridiculous and disgusting. Sheldon Gitis thinks the Bader Development “upscale” big box apartment buildings with a “modern, urban feel” at the end of freeway ramps in Shoreview and Minnetonka are ridiculous and disgusting. What’s the difference? Are Bader’s suburban highway projects more eco-friendly than Toll Bros. suburban cornfield projects? How so? I think it’s ridiculous to suggest that Bader’s highway projects are somehow good simply because someone like Bill Lindeke may think some slightly more outer layer of much less dense sprawl is even worse. At least the people buying the McMansions from Toll Bros. are actually buying something. The people paying rent to Bader’s Steven-Scott Management are simply buying time while they spend their days racing around on highways and their nights in their “modern, urban feel” highway hellhole. The irony of fetishizing the ecosystem or “urbanism” of the big box apartments while demonizing the wastefulness and over-indulgence of the McMansions is that it’s those who are profiting from the “modern, urban feel” bullshit who are living in the big houses on the lake. I can guarentee you none of the Bader Development/Steven-Scott Management “Executive Team” are paying a third of their income or more to rent one their apartments at the end of a freeway ramp.

                    Density, per se, is not good or bad. What matters is quality of life. The commercial-industrial expansion that has coincided with the expansion of highways, including lots of big box apartments and lots of dirty, noisy, dangerous motor vehicle traffic, has not made life more pleasant.

                    • Bill Lindeke
                      Bill Lindeke July 2, 2020 at 10:05 am #

                      The difference is that I’m saying things about Ham Lake neighborhoods as an example of what NOT to do in a discussion.

                      I have relatives in Ham Lake and they are very nice and though I would not want to live there I don’t disparage the people that do.

                    • Sheldon Gitis July 2, 2020 at 5:42 pm #

                      If it was an example of what not to do, why did you do it? The big box apartment buildings that you apparently think are better than your relatives’ house in Ham Lake, many of which are located not too far from Ham Lake along highway corridors, are the worst of all worlds – high density and virtually 100% automobile dependent. I have an 87 year old mother living in the Hwy 7-Hwy 169 Knollwood area of St. Louis Park. It is what it is, an automobile-dependent, high-density, highway hellhole.

      • Allen June 29, 2020 at 1:03 pm #

        It happens all the time. For example, JAX FL went from1.2 M to 1.5M population @ 2005 – @2015 Yet median rent in constant dollars went from @$1140 to @$1040 despite they fast growth.

        • Bill Lindeke
          Bill Lindeke June 29, 2020 at 1:47 pm #

          Can you provide data sources on Jacksonville? I would certainly look at it!

          • Allen July 1, 2020 at 9:25 am #

            Not trying to be rude but just google it. Plenty of sources showing MSA population 2005 vs 2015. The same with median rents. it took me about 7 minutes between those 2 and an inflation calculator.

            I would imagine that a bit of searching for some papers + academic work would turn up a nice spreadsheet with some of this data like the median rent over time.

            I peeked at Jacksonville for 2 reasons. It’s not Houston. There’s a lot of baggage that Houston brings to the table in Urbanista circles.

            The other is that Jacksonville ranks high in economic freedom.

  6. Sally June 29, 2020 at 6:00 am #

    Why not talk about the effect of massive numbers of immigrants and refugees who have moved into the Twin Cities? Why is this ignored?

    • Bill Lindeke
      Bill Lindeke June 29, 2020 at 10:15 am #

      Well, because that’s ridiculous, false, and racist.

      • Bill Lindeke
        Bill Lindeke June 30, 2020 at 2:52 pm #

        I guess I should explain. Do the Twin Cities have “massive numbers” of immigrants and refugees? I don’t think we do. I think we should be more welcoming to refugees from around the world, and the US is very poor on that front. As to what Minneapolis would look like without immigrants, I shudder to think of it. Immigrants are often the victims of the housing crisis, many of whom are “cost burdened” paying 30% or more of their income on rent.

  7. Steve Gjerdingen June 29, 2020 at 9:35 am #

    It really frustrates me that 2.5 times the rent should = income is seen as the ‘affordability’ standard in the rental world. This standard will ensure that people remain slaves forever to their landlords. How about Dave Ramsey’s 25% rent standard? I’d love to see what the affordability reports would show if that number was punched in. The only way people are going to get out of their situation and maybe someday be a homeowner is to save and without going lower on the amount they are spending on rent I don’t see how that is possible, especially in a metropolitan area like this one that is going bonkers with housing costs.

    • Bill Lindeke
      Bill Lindeke June 29, 2020 at 10:17 am #

      I had always heard 1/3 of income as the benchmark for affordability.

      The point is to stop metro areas from “going bonkers with housing costs.” How do you do that? In a growing city, no matter what you think Step 2 should be, Step 1 is build more housing.

  8. Bill Lindeke
    Bill Lindeke June 29, 2020 at 10:29 am #

    A comment I was thinking about. Housing affordability is really two linked problems. One is that cities need to make sure to stop the rising cost of housing. That’s difficult in US cities, but Minneapolis is showing the way forward.

    The other problem requires larger intervention. Notice the 30% AMI level on the chart above. Neither last year nor this year has there been any (!) housing listed in Minneapolis and Saint Paul that is affordable at 30% AMI. 30% AMI is $30,000 per year for a family of four. Saint Paul’s median household income is $55,000, and so there are many many families and people at 30% AMI.

    30% AMI translates to a 2 bedroom apartment at $675/month or below, or a home priced at under $92,000. (https://metrocouncil.org/Communities/Services/Livable-Communities-Grants/2017-Ownership-and-Rent-Affordability-Limits.aspx) For folks at that level of income, they are screwed, especially if rents keep going up city-wide. If they lose their homes, they are either in an endless line for a Section 8 voucher, on a relatives’ couch, or out on the street.

    How do we provide homes for these folks? That’s a difficult question and we need answers. Cities by themselves do not have the resources to solve the problem, especially with huge budget deficits, though both Minneapolis and Saint Paul are committed to small housing programs aimed at these communities. Maybe a housing voucher system like the one Matthew Desmond describes might works, but it would have to be a federal (or state?) effort: https://www.vice.com/en_us/article/yp7ppj/housing-vouchers-would-change-the-face-of-poverty

    The point of this post in the first place is that, if you don’t stop rents from rising in the first place, providing a few dozen 30% homes around your city will be dwarfed by the loss of NOAH housing caused by the shortage. The private market is so much larger than the public market, it needs to be addressed if you want to focus on those who are one paycheck away from being out on the street.

    • Steve Subera June 30, 2020 at 12:43 pm #

      Nail on the head, Bill. The lack of housing for the 30% AMI is what I think of when people say affordable housing. I don’t have a lot of faith that the ordinances will have much of an effect. Even with rents falling, there’s going to be a limit to how far and I don’t think they will fall enough to help the bottom tier.

      I would add that any discussion on how to help families making 30% of AMI afford housing needs to include ways to provide better job opportunities with better wages that increase over time.

  9. Stan June 29, 2020 at 12:49 pm #

    Minneapolis has done nothing to lower the cost of building. Until they do that, the end product will not become meaningfully affordable.

    • Bill Lindeke
      Bill Lindeke June 29, 2020 at 12:55 pm #

      It’s not about the new buildings. It’s about the effect on existing homes.

      And, yes, reducing or removing parking minimums does lower the cost of new home construction.

  10. Tom Basgen
    Tom Basgen June 30, 2020 at 1:15 pm #

    Hi, Moderator who’s not Bill here. This is a place to do polite discussion. There are a lot of ways to disagree politely. I had to delete a big chunk of a quibbling thread, the reason I deleted it was not because I gleefully revel in censorship, the reason I deleted that thread is because This is a place to do polite discussion.

    If you are big mad online consider taking a walk outside instead of taking it out on someone.

  11. Tom Basgen
    Tom Basgen June 30, 2020 at 1:22 pm #

    Another Moderator issue on this article from a different person. Reporting a comment to take a personal pot shot at a moderator sends your dumb opinion to everyone on the moderation team and I do not want to read your dumb petty jabs. Neither do all the other people on the mod list who have jobs and kids and other things to do than watch you show your ass.

    Polite discussion please.

    Thank you.

    • Steve Subera June 30, 2020 at 1:39 pm #

      Tom, I think your comment would have been better sent just to the person involved and not as a general comment. I’m glad there’s moderation and I appreciate your time, but you just violated your own “take a walk outside” rule also used a profanity to attack someone.

      Do you see the irony in saying “Polite discussion please.” at the end of your comment?

      • Sean Hayford Oleary
        Sean Hayford Oleary July 1, 2020 at 3:49 pm #

        No opinion on Tom’s comment either way, but just a tech note: we don’t require emails for reporting a comment, so there often is no way to reply to the person reporting only.

        And having seen dozens of those complaints — at least half seem to be a matter of simply disagreeing with a comment, rather than a substantive complaint about them being inappropriate. No harm no foul, I guess. But also, why not just ignore it, or reply to it publicly if you want to engage it.

  12. Scott Walters June 30, 2020 at 5:14 pm #

    I call tag foul! In the tags, Minneapolis is capitalized, while Saint Paul is not. Booo! Booo! This smaller twin discrimination must not stand. No substantive discussion should be allowed to continue while Saint Paul suffers from such unfair treatment and discrimination. I am not angry, but I am most put out.

    That said, Minneapolis definitely wins in the how to reduce rent experiment we’ve apparently been running on ourselves. Time to step up, St. Paul, and follow the lead.

    • Bill Lindeke
      Bill Lindeke June 30, 2020 at 9:11 pm #

      Our tag system is a mess. We are going to revamp it very soon!

  13. Paul Strebe June 30, 2020 at 10:10 pm #

    It’s interesting that so many people have been trained to direct their anger at landlords for raising their rents instead of at employers for not raising their pay.

    • Daniel Choma
      Dan Choma July 5, 2020 at 7:47 pm #

      To be fair to people’s justifiable anger, folks have been mad at property owners for a long time. Proudhon was famous for his philosophy that being a landlord or a venture capitalist is by nature inhumane.

      That being said, the living wage for a person in MN with no children is 12.61/hr.
      With 1 kid, the living wage is 25.58/hr.
      The minimum wage is 9.86/hr.

      When there is a 27% gap in min wage to ability actually pay your bills for singles and a furious 167% gap for people with one kid, we are going to have problems not matter what we do.

      • Sheldon Gitis July 6, 2020 at 9:14 am #

        While housing costs aren’t the only bills people pay, they’re a big chunk of the cost of living. When billionaire investors, construction contractors and property managers are getting very rich building big box apartment buildings and buying rental homes, while those forced to pay rent are going broke, I think the solution is rather obvious. Stop spending housing dollars making rich people richer and spend the money on housing instead.

        • Bill Lindeke
          Bill Lindeke July 6, 2020 at 6:37 pm #

          “Stop spending housing dollars making rich people richer and spend the money on housing instead.”

          I really wish I understood what you are saying here. Whose “housing dollars” are we transferring to spending on housing, and how?

          • Sheldon Gitis July 7, 2020 at 9:41 am #

            Everyone who’s renting an apartment in one of the wonderful new “modern urban living” big box apartment buildings you seem to adore has their housing dollars profiting large commercial-industrial real estate developers, construction contractors, property managers, and investors. What is it about the word “profit” you don’t understand? If you’re paying for someone else’s profits, you’re not paying for housing.

            Spending many millions of dollars building big buildings with lots of small single or 2-person cramped apartments costing somewhere in the neighborhood of $300,000/unit and renting for close to $1500/month or more, is not the way to do affordable housing. These are NOT the folks you want doing housing, especially if you have any interest making it affordable.
            https://www.baderdevelopment.com/
            https://www.steven-scott.com/
            https://dorancompanies.com/
            http://www.reuterwalton.com/
            https://www.krausanderson.com/
            https://www.weisbuilders.com​​/experience​​/experience​​-mn​​/
            https://groundedsolutions.org​/about​/board​-directors
            https://www.invitationhomes.com/

            I’ve already addressed your “how” question – a WPA-like public works program building publicly-financed, owner-occupied homes available for purchase for 30% of income, sort of like a public housing voucher only for home ownership rather than rental.

            • Sheldon Gitis July 7, 2020 at 9:48 am #

              I should have said the “how to” question, not your “how” question.

            • Bill Lindeke
              Bill Lindeke July 7, 2020 at 10:05 am #

              I could get behind a “WPA-like public works program building publicly-financed, owner-occupied homes available for purchase for 30% of income, sort of like a public housing voucher only for home ownership rather than rental,” only I would put it all in a community land trust model to avoid real estate speculation and also include multi-family and other forms of shared space housing of the kind you seem to dislike.

              Government subsidy of mortgages of a very specific kind of single-family home before and after WWII is what got us all in this housing mess in the first place, because it segregated our society along race and class lines and reduced the rich diversity of urban housing types to just one or two choices. Single-family homes are not for everyone, especially since average household size has declined so steeply over the last few generations. (see https://ourworldindata.org/living-alone) What about older or younger people?

              There’s also a Victorian ideology associated with single-family homes and the so-called nuclear family that I would guess many people would want to avoid.

              • Monte Castleman July 7, 2020 at 7:07 pm #

                Declining family size and younger and older people isn’t a good reason to stop building detached homes. You don’t have to be middle aged with kids to want a single family detached home. My sister and I have no kids and would never ever think about living in a multi-family home, not even a duplex or townhome. Not now and not when we were younger or will be older. And yes, my sister lived in an apartment for a short time while at college and I visited her there extensively, so we know what that option is like.

                The house across the street from me the father got forced out in a divorce years ago and the kid probably moved out a decade ago. Recently she converted one of the empty bedrooms into a main floor laundry to ease aging in place. Two houses down the largest house on the street is occupied by an elderly couple, there kid having moved out probably 20 years ago.

                This WPA house scenario would include the idea of small lots (easier for maintain if you’re older, or younger and are busy with work), maybe even an association to do some of the maintenance, although I think the idea of these homeowners being able to personalize with gardens and exterior finishes is important.

              • Monte Castleman July 7, 2020 at 7:22 pm #

                Also of course there’s my article about why the free market combined with government land use policies is not getting us any of these small houses anymore.

                Although I did the same thing that’s being discussed here and got too snarky about other people’s housing choices, and if there’s one article I really wish I had done something different on, it’s using different verbiage on that one. As people know I’m only to happy to create controversy, but I’d like it to be about the main point being discussed and not a choice of verbiage.

  14. Janne Flisrand July 1, 2020 at 10:06 am #

    For an alternative COVID-lens at the HousingLink data, they created a COVID-19 Rental Housing Trends that uses Twin Cities-wide data and presents it in a monthly context from pre-COVID January through today.

    https://housinglink.org/Research/RentalHousingTrends

    Disclosure: I’m very recently HousingLink employee. I’ve been tweeting the monthly housing briefs for much longer.

    • Bill Lindeke
      Bill Lindeke July 1, 2020 at 11:37 am #

      I did not realize that, Janne. Can you share a bit more about the mission and approach of HousingLink?

      • Janne July 3, 2020 at 8:21 am #

        Happy to, Bill. (I’m borrowing some website language.)

        HousingLink was established as a result of the 1995 Hollman v Cisneros Consent Decree. One provision of the decree stipulated that an affordable housing information clearinghouse be established to ensure that low-to-moderate income families have access to the affordable housing information they need. HousingLink was organized in 1997 as a 501(c)3 organization to meet this need, and we began providing vacancy information as well as training and support to housing service agencies.

        The mission of HousingLink is “to improve people’s lives through information expanding their affordable rental choices.” One key offering is an affordable listing service that is free for landlords to post and friendly to low-income renters.

        (These are my words.)

        Over the last 20 years, HousingLink has also built up a strong research arm that publishes housing data — one of those things is the report you shared here. You can see what the others are at https://www.housinglink.org/Research

        My work is expanding the number of buildings/owners/managers who accept Housing Choice Vouchers.

        • Sheldon Gitis July 3, 2020 at 10:32 am #

          If the decree stipulated “an affordable housing information clearinghouse”, why is the mission of this clearinghouse limited to “improv(ing) people’s lives through information expanding their affordable rental choices?” Are rentals supposed to be the only housing choice for “low-to-moderate income families?”

          • Janne July 7, 2020 at 7:43 am #

            No one I know thinks that rentals are supposed to be the only housing choice for low-to-moderate income families. Thankfully, there are hundreds of organizations working on all the different aspects of housing affordability in Minnesota, and different groups focus on different parts. There are land trusts and cooperatie finance/policy groups, first-time homeownership groups, and many more working on ownership options.

            I suspect HousingLink’s rental focus grew from the decree that was part of a public housing racial discrimination lawsuit, focused on providing information to public housing residents and those who have vouchers. Finding Naturally Occurring Affordable Housing – or rental homes that happen to be affordable – is a challenge, and that’s HousingLink’s niche.

            • Sheldon Gitis July 8, 2020 at 12:19 pm #

              Of the “hundreds of organizations working on all the different aspects of housing affordability in Minnesota”, is there one that allows those with public housing vouchers to use those vouchers for mortgage rather than rent payments? If so, why didn’t the decree fund that private organization or public agency, rather than, or in addition to, yours? If there is no such agency or organization, out of the “100s” you refer to, why not?

  15. Dennis Paulaha July 3, 2020 at 8:11 pm #

    WHAT DO SOME RENT DECLINES IN MINNEAPOLIS MEAN?
    Dennis Paulaha, PhD
    In a June 28, 2020 article in streets@mn, Bill Lindeke uses data showing declines in some, but not all, rents in Minneapolis to argue the data supports the affordable housing promise in the Minneapolis 2040 Plan.
    The article, which is titled “New Housing Lowers Rents in Minneapolis; Saint Paul, Not So Much,” is an attempt by Mr. Lindeke to snidely dismiss those who argued, and continue to argue, that eliminating single family zoning will not solve the affordable housing problem or make it possible for low income people and families, regardless of race, to move into new little apartment buildings to be built on the sites of bulldozed single-family homes.
    Mr. Lindeke’s argument is simple. He writes, “Minneapolis has built a lot of new apartments over the last five years, and now actual rents are finally going down, almost all across the board.”
    There are, of course, a number of factual problems with that statement.
    One is his use of the “almost” qualifier, which, as the data show, is that rents on one and two bedroom apartments have fallen, but not rents on three bedroom apartments.
    Another is, given that “a lot of new apartments” were built during the past five years, why did rents keep increasing until last year? What happened last year? Because if the argument is that increasing the quantity of rental units causes rents to fall, then it is necessary to explain why rents were not falling for the previous four years while the building spurt was taking place.
    Mr. Lindeke’s answer is to focus on the quantity of units and dismiss the idea that last year was an aberration, or was affected by the COVIS-19 crisis, or could have been caused by what he calls “local economic variability or demographics or rising wages (?) or [insert theory here].”
    It is, of course, not necessary to insert a theory, given that Mr. Lindeke’s cavalier dismissal of facts does not change the facts.
    The COVID-19 crisis affected everything, increasing profits for companies that benefitted from the change in life styles and pushing others into bankruptcy. Pretending it had nothing to do with rents is a stretch for anyone.

    Another fact he alters is the fact that Minneapolis and St. Paul are not, as he says, “…basically the same housing market.” He is wrong. The truth is, few people renting or buying houses in “the cities” will as he says, “…look at both cities…” Anyone who grew up in either city knows his statement sounds like something only an outsider would make.
    But let’s look a little more closely at what his one-big-city claim means.
    If, as Mr. Lindeke says, Minneapolis and St. Paul are one big housing market, then the fact that a lot of new rental units were built in Minneapolis should also have caused rents in St. Paul to fall. But, as he points out, that did not happen. And because that did not happen, his argument can be dismissed.
    The real answer as to why some rents declined in Minneapolis during the last twelve months is actually in his statement. After five years of building a lot of new apartment buildings in Minneapolis, “…rents are finally going down…”
    And that is the answer.
    Rents cannot be explained with supply and demand curves, because all rental units are not identical and because there is not one equilibrium market price for all rental units.
    Rents, which vary with location and a long list of other factors, are set by owners who are hoping to make the greatest possible return on their investment.
    When rents are increasing, we can expect investors to build more rental units. When rents are falling, not so much.
    Therefore, there is nothing particularly smart about saying rising rents in Minneapolis led investors to build lots of new units. And as they did, rents kept increasing. Until they didn’t.
    There is no magic (including magical supply and demand curves) needed to explain rents.
    In the case of Minneapolis, investors kept building until, as Mr. Lindeke says, rents finally began going down. Some call it overbuilding.
    What about the future?
    Rents, which are obviously affected by the number of potential renters as well as the quantity of rental units available, will change as incomes change, as the economy of the city changes, and as a long list of other factors change.
    In the end, there are two big facts that cannot be dismissed by Mr. Lindeke.

    One is that whatever happened to rents in Minneapolis during the last twelve months has nothing to do with justifying the promises in the Minneapolis 2040 Plan that has yet to see single family homes being torn down and replaced with little apartment buildings.
    The other is that owners will always charge the highest possible rents, because owning rental units is a business, not a game; and because it is an investment, no owner will charge less than renters are willing to pay.
    Which is why, when four adjoining single-family ramblers in Southwest Minneapolis were torn down and replaced with a sixteen unit apartment building spread over four lots, increasing the number of rental units from four to sixteen, did not cause rents to fall; instead rents on the new units are as high as $3,200/mo.

    • Bill Lindeke
      Bill Lindeke July 6, 2020 at 6:32 pm #

      I am a bit surprised that an economist does not think supply has anything to do with the price of housing. Supply and demand curves account for a lot of the variability in housing prices. Sure, not all homes are the same, but that seems like semantics… People shop around. For example, if the supply of housing is very tight, you get a roommate even if you don’t want to.

      You state: ‘The real answer as to why some rents declined in Minneapolis during the last twelve months is actually in his statement. After five years of building a lot of new apartment buildings in Minneapolis, “…rents are finally going down…”’ Is that not the same argument?

      I would suggest that, if rents are falling at all in Saint Paul, it’s likely because of the Minneapolis effect.

      Of course you are correct about 3-BR apartments, which are rarely made in new multi-family construction. This is much of the problem outlined in Desmond’s book Eviction. These usually require duplexes / existing housing stock, or SFHs in the burbs, for the most part. They are almost impossible to find, just as 30% AMI housing is nowhere to be found. Very vulnerable housing, and outlines again why it’s so important to reign in price increases.

      And I still maintain that Minneapolis and Saint Paul are basically the same housing market. People shop in both places when they are looking for rental or to purchase a home. I know many examples of this tendency. Typically you will have preferences, geographic or price, that lead you to desire one more than the other, but you shop around, and they are maybe some of the best comp cities in the country for this. Picture some of the cities in Greater Boston, like Cambridge vs. Somerville vs. Medford vs. Allston, for a useful analogy.

      As for Southwest Minneapolis, if you know anything about Linden Hills, that proves my point.

      • Dennis Paulaha July 6, 2020 at 6:52 pm #

        Bill Lindeke,
        I will give you a relatively long answer, because I know you are not an economist.
        Given that two of the publicly stated promises behind eliminating single-family zoning with the Minneapolis 2040 Plan are to help solve the affordable housing problem and the racial inequity problem, it would have been good had city officials listened to simple explanations as to why neither of those promises can be fulfilled by eliminating something that eas never the cause of discrepancies in home ownership and equity among races.
        Supporters of the promises continue to deride those who offer facts as rebuttals to their fictional story of how increasing the quantity of housing units will magically cause the price of housing to fall.
        Of course, the magic they are betting on comes not from the power of the beans for which they are trading single-family homes, but from the power of supply and demand curves.
        And that, right there on the blackboard, is the problem.
        A child can probably draw a little picture on a blackboard showing supply and demand curves for housing units. If the child knows just a little bit about economics, he or she will draw a line that slopes up to the right showing that the supply of housing units will increase as the price increases. If the child knows a little more, he or she will draw a supply curve that is a vertical line at the number of housing units in existence at a point in time.
        In either case, to show what happens if the quantity of housing units increases, the child will draw a new supply curve to the right of the old supply curve, which means, if whatever caused the change in supply did not also cause the demand curve to change, the equilibrium market price of housing units can be expected to fall; the conclusion being that an increase in the quantity of housing units will magically, or, with the help of an invisible hand, lower housing prices, whether it is homes that are purchased or units that are rented.
        Unfortunately, the magic needs a little more explaining.
        A supply and demand curve diagram can only be drawn for units that are identical, and because housing units throughout a city are not identical, a better supply curve for housing would be a vertical line for each individual unit of housing. A demand curve could then be drawn over the vertical supply curve. And because we are now talking about reality, which is a house by house reality, the theoretical price of each house, or rent for each rental unit, would depend on the demand for that unit or house, which is a function of a long list of items, one of which is how many other units or houses renters or buyers can choose from.
        Using this more realistic beginning, it could be argued that the more houses that are built, the lower the demand would be for each existing housing unit.
        The problem is, a vertical supply curve only applies to cases where production costs are irrelevant and the seller is willing to sell at whatever price is determined by the demand for the item.
        In other words, what sounds as though it might be a legitimate theoretical argument to claim increasing the quantity of housing units can decrease the price of housing units, is not.
        All of which is why this is not a supply and demand problem.
        It is a business and investment problem.
        Which is why any acceptable argument must begin with the reality of how and why housing units are built, which is that they are contracted to be built by people for themselves, as speculative investments by builders, or as investments if we are talking about rental units.
        Which raises the question: if builders are allowed to tear down single-family homes in Minneapolis and replace them with little apartment buildings, will they continue to do so if overbuilding or declining incomes or a declining economy leads to lower rents and lower or negative profits?
        The answer is, no.
        Investors are not going to keep increasing the quantity of housing units until rents are affordable to people who cannot afford current rents, because they are in the profit business, not the affordable housing business. In other words, the quantity argument is based on the false assumption that building costs are zero.
        Which is why, even if builders can legally tear down single-family homes and build rental units, they will not do so if rents fall below levels that yield profits on their investments.
        Which brings up another question: Are we talking about affordable ownership or affordable rents? Because the answers are different.
        Building rental units that are profitable depends on the cost of building and managing such units and the expected rents for the units. And because rents are dependent on a long list of factors and vary widely by neighborhood, builders and investors should not be expected to build rental units in expensive neighborhoods and charge rents that are less than they can receive..
        The same is true in lower income neighborhoods, because, again, builders and investors are making decisions based on profits, not charity. Which is why tearing down single-family homes in low income neighborhoods and building little apartment buildings will not benefit the previous renters, who may have been forced out of the city when the houses they were renting are torn down, but will benefit those who can pay the higher rents, a process called gentrification.
        In other words, increasing the quantity of rental units in a city by allowing builders to tear down single-family homes and replace them with little rental buildings does not guarantee falling rents anywhere, and will not, without government intervention, let low-income families move into expensive neighborhoods. At best, it might keep rents in some places from rising faster, but falling rents will lead builders and investors to stop building new units unless building costs are also falling.
        At the same time, by reducing the quantity of single-family homes, the prices potential buyers are willing and able to pay for each of the single-family homes left standing could increase, because with fewer single family homes in existence, there could be a larger number of potential buyers for each one. The catch is, what happens to prices depends on whether or not the massive destruction of single-family homes destroys the character of neighborhoods, because if it does, the number of potential buyers and the prices they are willing and able to pay for each single-family home left standing are likely to fall. And as neighborhoods decline, many higher income people who previously preferred to live in the city, may choose to move to the suburbs.
        In the end, the bottom line is the bottom line.
        If rents are high enough to yield profits from building rental units, given the cost of building, builders and investors are likely to do so.
        If overbuilding, due to overly optimistic estimates of future rents, leads to vacancies and declining rents, while building costs remain constant or increase, investments in building rental units can be expected to decline.
        In the end, because building costs are real and constantly increasing, there is no reason to expect builders and investors to, without government direction and subsidies, build themselves into a profit hole.
        Another fact that cannot be ignored as the Minneapolis planners continue to predict the elimination of single-family zoning will bring down rents is that even though their plan is to increase the number of rental units in the city, it is also intended to increase the population of the city, which means the number of renters competing for each rental unit would increase, which will also prevent rents from falling.
        If building costs are assumed to be zero and the 2040 Plan were not aimed at intentionally bringing more people into the city, we could argue that some rents might not increase as fast as they otherwise would.
        But that is not going to solve the affordable housing problem, the racial inequity problem, allow low income people to move into expensive neighborhoods, or allow people in neighborhoods that are, without a doubt, going to be gentrified, to remain in the city.
        Meanwhile, the only way eliminating single-family zoning will make home ownership more affordable is if the bulldozing of neighborhoods causes current owners to leave the city and prospective owners to avoid the city, which is hardly a solution anyone should want to impose on any city in the country.

        • Eric Anondson
          Eric Anondson July 6, 2020 at 7:53 pm #

          Vizzini would be envious.

          Seriously though. Everyone I know witnessed countless 1,200 sq ft humble homes in Minneapolis and St. Paul get demolished for 4,000-6,000 sq ft monster homes. Single family homes because zoning artificially decreed it.

          Homes suddenly forever out of the price range of everyone except the upper reaches of incomes.

          A home builder could have instead built a 4,000-6,000 sq ft duplex or triplex and we still have not decreased the quantity of ownership options, we have slightly increased the amount of rentals and added them in neighborhoods where opportunity is hoarded. By building a duplex or triplex the buyers can be lower income than the elite because the owners could supplement with rent from the other units. And it is STILL no bigger than the 4,000-6,000 so ft monster house that would have otherwise gotten built, thus is not a destroyer of neighborhood character, whatever the hell that means.

          This is how eliminating duplex-triplex bans helps housing prices.

          • Dennis Paulaha July 6, 2020 at 8:29 pm #

            Builders and investors are business people. They could build anything they want (well not really) but it is most likely they will build whatever they can make the most money from. That’s why government must be involved if we want to actually help solve the affordable housing problem and the racial inequity problem.

            • Eric Anondson
              Eric Anondson July 6, 2020 at 9:11 pm #

              Changing zoning is government involvement just as it was government involvement when zoning was imposed.

          • Steve Subera July 6, 2020 at 8:42 pm #

            Do the rules in Minneapolis require builders of duplexes or triplexes to live in one of the units? If not there is nothing stopping a building company from renting all the units and then you’ve taken a single family home out of the market. Also you now have an absentee landlord. That could be bad or good, but let’s not pretend that eliminating duplex-triplex bans is going to make everyone altruistic builders and homeowners.

            • Eric Anondson
              Eric Anondson July 6, 2020 at 9:10 pm #

              It does not need to make everyone altruistic. That sort of false absolutism is designed to keep the status quo until a fake utopia is created.

              • Steve Subera July 6, 2020 at 10:16 pm #

                One person’s hyperbole is another person’s false absolutism:)

        • Bill Lindeke
          Bill Lindeke July 6, 2020 at 9:28 pm #

          Well, this is why I make it a rule to not engage with the “science” of economics. At least social science is honest about being temporal and conditional. In general, economics lives in the world of theory rather than practice. For example, “homo economicus” is one of the foundational myths of capitalism. Almost nobody who isn’t being pedantic behaves under those assumptions. I find it almost impossible to engage with your bewildering statements and to take them at face value.

          For example, this statement: “A supply and demand curve diagram can only be drawn for units that are identical, and because housing units throughout a city are not identical, a better supply curve for housing would be a vertical line for each individual unit of housing.”

          The housing market begs to differ. It’s a market. Because of location, no houses are identical, not even in Levittown. Meet any realtor, and they will tell you about “comps.”

          in fact, one of the only reliable principles that comes out of the discipline of economics is the supply / demand curve. Unfortunately, the part of the market that most economists ignore is how government must function to create the market in the first place, and how that is often done through violence, the harsh rule of law, and oppression, as is the case here with a ton of the blatantly segregationist rules, evictions, and tax loopholes that create the market for property, real estate, and investment.

          Anyway, I’m checking out of this discussion. I hope you enjoy Southwest Minneapolis.Seems like a nice place for those who can afford it.

          • Dennis Paulaha July 6, 2020 at 9:44 pm #

            There are two stones on a table. You tell me one is quartz and the other is a diamond. I say they just look like two rocks and I don’t see any difference. You explain to me the difference between quartz and a diamond, and I tell you it’s just semantics. They’re just rocks, I say. If you want to engage with other people, you should have at least a little respect for other disciplines instead of thinking you are a master of all.

            • Bill Lindeke
              Bill lindeke July 6, 2020 at 10:00 pm #

              Maybe if you were a behaviorist.

              • Dennis Paulaha July 6, 2020 at 10:20 pm #

                You really have no idea what you’re talking about at all, do you? It’s really sad. I made the mistake of thinking you were a rational person, trying to solve a problem that is affecting many people, probably because you have a PhD, but you haven’t said one thing that makes sense.

                • Eric Anondson
                  Eric Anondson July 6, 2020 at 10:28 pm #

                  You are welcome to submit your solution to the complex problem as your own post to streets.mn instead of deep in a comments section.

                • Bill Lindeke
                  Bill Lindeke July 6, 2020 at 10:47 pm #

                  I am sure folks reading these comments can figure out for themselves which of us makes sense. I am at a loss with your arguments as well.

Leave a Reply

Note on Comments

streets.mn welcomes opinions from many perspectives. Please refrain from attacking or disparaging others in your comments. streets.mn sees debate as a learning opportunity. Please share your perspective in a respectful manner. View our full comment policy to learn more.

Thanks for commenting on streets.mn!