The Twin Cities has the worst housing shortage in the nation, as reported by the Star Tribune. This comes as no surprise to many who were in search of a home this past year. Home buyers were met with competing offers tens of thousands over the asking prices. This has escalated the average home sales price in the Twin Cities to $350,000, an increase of 11.1% over the previous year, according to the Minneapolis Area Realtors’ report.
Housing costs in the Twin Ports of Duluth and Superior are faring no better. Lake Superior Area Realtors reported that average home sales price increased by $30,000 to $225,000 in August, a +15% change from the previous year. Although this was down from a record high of $249,000 average sales price in June.
Duluth in particular might continue to see a housing crunch in the coming years as climate change-induced natural disasters continues to cause millions of Americans to reevaluate where they live.
Recent articles by the New York Times, CNN, and MPR has highlighted the popular North Shore destination as a “climate-proof” city that may attract future climate migrates due to the proximity of fresh water and a temperate climate. While no city in the world can claim to be “climate-proof” or “natural disaster-proof”, cities and states in the U.S. that border the Great Lakes will most likely fare better during the extreme weather fluctuations that climate change brings.
If Duluth and Minnesota in general are to experience an influx of people seeking a safer environment to live, raise their families, and conduct business, we should welcome them with open arms. “Newcomers add diversity and brings fresh ideas”, as Duluth’s Emily Larson stated. However, in doing so the comparative housing affordability that Minnesotans currently enjoy will come to an end without addressing the housing supply issue that faces the state. Minnesota is already expected to be 40,000 houses and apartments short of what is needed to satisfy housing demand and keep pace with the projected population growth. This figure does not account for any unexpected increase in population due to climate migrants.
Increasing demand on an already under-supplied housing market would only continue to increase average housing costs. This may lead to a situation where the only affordable housing options for middle-income earners are the exurban fringes of cities or gentrified urban areas (which would displace many other residents). Low-income Minnesotans seeking to purchase a home are already feeling the effects of the substantial increase in housing price and competitiveness of the past year’s housing market with many unable to compete and priced out of their neighborhood (as I’ve experienced working as a Realtor with a former client of mine).
Integrating the state’s nodes of population and economic activities through a state-wide high-speed rail transit system would help moderate substantial increases of housing prices due to supply and demand forces. With the Twin Cities being the main economic and employment hub of the state, building a reliable train service connecting the Cities to Duluth, Rochester, Saint Cloud, and all the towns and cities in-between would integrate the various housing markets. This would relieve housing demand pressure on any one city while increasing demand in localities with a depressed housing market. Rural cities and towns served by a high-speed train service may stand to gain the most benefit as the cheaper real estate would attract new residents and developers and therefore, an increase in tax base to better fund municipal services.
Residents of the Twin Cities, Twin Ports, and other major cities served by the train service would also see benefits. Residents of Duluth, Saint Cloud, would have better access to Twin Cities employment, services, and amenities. Twin Cities employees who may be priced out of the region’s housing market would have the option to live in more affordable communities served by the train corridors.
Increased housing construction near rail stations is key for this project to fulfill the goal of moderating housing price increases in an era of climate disaster-induced population growth in Minnesota. One does not need to look far to see how a rail corridor can spur housing development. In 2016, Metropolitan Council listed $4.2 billion in new investments and 15,245 new housing units along the Green Line. Even before plans were approved for the Green Line LRT extension to Eden Prairie, developers were already adding a total of 2,100 housing units along the rail corridor with that number certainly higher now as LRT construction continues. It may not be a stretch to consider that given a fast enough travel time between destinations, high-speed train services may spur housing development around its stations.
Proposals for such a rail system are not without precedent. The Northern Lights Express from Target Field to Duluth has been stalled for years due to lack of political will to fund the project. The proposed Zip Rail project from Saint Paul to Rochester was suspended in 2016. The Northstar Commuter Rail, which was originally proposed to go all the way to Saint Cloud, has only been built halfway with plans to complete the route indefinitely delayed.
Where highways and road infrastructure have been used to divide people and neighborhoods, high-speed train service has the opportunity to connect various Minnesotan cities and communities. Although no location is immune to the effects of climate change, it is important to plan for such a scenario where Minnesota and Minnesotan cities do become a “climate refuge”. As we welcome more residents to call Minnesota home, we should also make sure that there are enough options, opportunities, and resources for current Minnesotans to continue to live in the Great North.