A version of this article was posted to the Neighbors for More Neighbors blog.
When many people imagine housing for a family, the stereotypical image is a single-family home and expansive turf yard. And in many cities and towns around the country, minimum lot sizes and zoning requirements ensure that the only options available to families are single-family homes on large lots of land.
Even in Minneapolis, the city with the highest population and density in Minnesota, families searching for housing are mostly limited to single-family homes. This is especially true for residences on quiet streets with a front and back yard, where almost 90% of the housing options are one-unit buildings.1
Duplexes and Triplexes Are More Affordable Housing Options
This lack of diversity in housing options also makes housing more expensive. Single-family homes are substantially more expensive than equivalently sized duplexes and triplexes, primarily because multi-dwelling homes get to share the large fixed costs of land and building construction across all of the residences.
This fact can be seen clearly in the data: according to the Minneapolis Assessors Parcel database, the average Minneapolis single-family home has a total property value of $330,000, whereas the typical duplex has a per-unit value of $172,000 ($344,000 total) and for triplexes it is $161,000 per unit ($483,000 total). And while assessed value does not perfectly predict the market price, it does correlate well enough to be a useful indicator of housing price.
Looking specifically at 3-bedroom homes, which is what a family might be looking for, we see that 3-bedroom units in Minneapolis duplexes and triplexes are assessed at values $100,000 less than 3-bedroom single-family homes. This lower cost translates into lower mortgages for families looking to buy the unit as a townhouse, or lower monthly rents if they rent.
A local developer helped break down the housing costs for me to illustrate how building multi-dwelling homes results in more affordable housing than building single-family homes. This developer typically works in South Minneapolis, where land values tend to be higher than the rest of the city.
| Home Details | Single Family (smaller) | Single Family (larger) | Duplex | Triplex |
|---|---|---|---|---|
| Total Square Footage | 1,500 sqft | 3,000 sqft | 3,000 sqft | 4,000 sqft |
| Square Footage Per-Unit | 1,500 sqft | 3,000 sqft | 1,500 sqft | 1,333 sqft |
| Floor Area Ratio on 5,000 sqft lot | 0.3 | 0.6 | 0.6 | 0.8 |
| Costs | ||||
| Land (5,000 square foot lot in South Mpls) | $145,000 | $145,000 | $145,000 | $145,000 |
| Basement, Foundation, Trusses, Roof | $75,000 | $100,000 | $100,000 | $100,000 |
| Professional Services (Elec., plumbing, etc.) | $60,000 | $80,000 | $85,000 | $120,000 |
| Physical Materials and Labor | $130,000 | $200,000 | $220,000 | $300,000 |
| Architect fees, SAC, landscaping, permits | $70,000 | $70,000 | $70,000 | $70,000 |
| Total Costs | $480,000 | $595,000 | $620,000 | $735,000 |
| Cost Per Unit | $480,000 | $595,000 | $310,000 | $245,000 |
As the table shows, many of the costs of home construction, like land, foundation, and roofing are mostly fixed, and do not grow substantially when adding an additional space or units. This means that the developer can much more efficiently and cost-effectively build one triplex than single family homes of equivalent size.
Built Form Regulations Will Determine What Can Be Built
Having more multi-dwelling homes will improve housing affordability in Minneapolis, but first we need to update the zoning code to make it possible to build these homes. Most people who follow local housing news have heard that in 2018, the Minneapolis City Council passed the 2040 Plan that legalized the construction of duplexes and triplexes in residential neighborhoods throughout the city.
What many people likely don’t realize, however, is that the Minneapolis zoning code has not yet been updated to achieve the goals of that plan. Some of that work is happening this December, when the City of Minneapolis will be updating its zoning regulations to become consistent with the Minneapolis 2040 Plan. The Built Form Regulations under consideration will determine what kinds of buildings can be built in each lot in the city, regulating lot dimensions, building height, setbacks requirements, building square footage, and other areas.
One particularly powerful zoning regulation directly determines how much building can be placed on a lot: the maximum allowed floor area ratio, or FAR. FAR is calculated as the total above-ground square footage of a building divided by the total square footage of the lot it sits on.
For example, on a standard 5,000 square foot lot,2 a maximum FAR of 0.5 means the building can be at most 2,500 square feet, regardless of how many dwellings there are.3 You’ll notice with a maximum FAR limit of 0.5, (the pre-2040 plan limit in most residential areas) the duplex and triplex mentioned in the first section could not be built on this lot, since they are over 2,500 square feet.
In its review of the Draft Built Form Regulations on November 9, 2020, the Planning Commission recommended a tiered-FAR system, where triplexes are allowed a greater FAR than single-family homes. The goal is to encourage the development of multi-dwelling homes over larger single-family homes, and that is what multiple planning commissioners cited in their deliberations of the FAR regulations.4
| Built Form District [map] | Base Zone | Planning Commission Recommended FAR Limit |
|---|---|---|
| Interior 1 | R, OR | 0.6 for 1 unit, 0.6 for 2 units, 0.8 for 3 units |
| Interior 2 | R, OR | 0.6 for 1 unit, 0.6 for 2 units, 0.8 for 3 units |
| Interior 3 | R, OR | 0.6 for 1 unit, 0.6 for 2 units, 0.9 for 3 units |
Assuming a standard lot size of 5,000 square feet, we can calculate what kinds of homes can be built under these FAR limits.
- Single-Family Homes of up to 3,000 square feet can be built in any Interior district. This is a high upper limit and will accommodate large single-family homes. Over 95% of all 4-bedroom single-family homes in Minneapolis are less than 3,000 square feet, as are 85% of 5-bedroom homes.
- Duplexes with two 1,500 square foot units can be built in any Interior district (3,000 square feet total). This is big enough for 3 bedrooms per dwelling and large enough for a family to live in.
- Triplexes with three 1,500 square foot units can be built in Interior 3; in Interior 1 and 2, triplex units are limited to an average of 1,333 square feet each (4,500 and 4,000 square feet total, respectively). These units are big enough for 3 bedrooms per dwelling and large enough for a family to live in.
The Planning Commission should be commended for their tiered FAR recommendations. If their recommendations are accepted by the City Council, it will allow for the construction of duplexes and triplexes that are large enough for families to live in throughout Minneapolis.
If the City Council wanted to go a step further, it could reduce the maximum FAR for single-family homes to 0.5. This would encourage construction of affordable multi-dwelling homes over large and expensive single-family homes, without limiting the development of more reasonably sized single-family homes.
Legalizing More Options for Affordable Housing
On the topic of housing, the Minneapolis 2040 Plan is quite clear:
Minneapolis is growing faster than it has since 1950… With this growth comes increased demand for housing and an associated increase in housing costs and rents. As a result, housing units that were once affordable no longer are, and less housing is available for low-income residents of Minneapolis. (emphasis added)
Minneapolis 2040 Plan
We need more affordable housing, and duplexes and triplexes can be a part of the answer. The FAR regulations passed by the Planning Commission will make it legal to build multi-dwelling homes large enough for families, and the City Council should pass them as well.
Notes:
[1] Of the 1-3 dwelling homes in Interior 1, 2 and 3 Built Form Districts, 89% are single-family homes, 10% are duplexes, and 1% are triplexes.
[2] The Minneapolis Planning Commission in their recommendations to the City Council fixed the minimum lot size for new residential lots to be 5,000 square feet. In the Interior 1-3 Districts, this represents about the 17th percentile of existing residential lot sizes. In these districts, 17% of lots are smaller than 5,000 square feet, 50% of lots are between 5,000 – 6,500 square feet, and 23% of lots are greater than 6,500 square feet.
[3] For more details on the topic, Bill Lindeke at MinnPost has a great explainer article: Floor area ratio 101: This obscure but useful planning tool shapes the city.
[4] November 9, 2020 Planning Commission Meeting. Discussion of FAR begins at the 1:53:00 mark and the vote occurs at 2:11:30. https://www.youtube.com/watch?v=7zvVtu4Sjik