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Living in The Space Between
Who cares about affordable housing? For a start, baby boomers thinking about downsizing and members of Generation Y, wanting desperately to find a way out from the basement bedroom, need affordable housing. So do single moms piecing together multiple part-time jobs and the vast middle group of workers watching wages erode.
Affordable housing requires big government subsidies to developers, right? Wrong, says The Space Between, a new report on affordable housing in Minnesota, which points out that right now unsubsidized affordable housing "provide[s] more affordable housing than the aggregate of all privately owned subsidized rental properties."
The report comes from a study conducted by the Minnesota Preservation Plus Initiative (MPPI) makes recommendations for policy and strategies that can help to preserve this housing, and even to encourage more of it through what they call "light touch" interventions. The study and report were funded as part of a multi-year grant by the MacArthur Foundation, and included three other strategic partners: the Family Housing Fund (FHF), the Greater Minnesota Housing Fund (GMHF) and the Minnesota Housing Finance Agency.
Why do the Twin Cities need more affordable housing?
From the report:
"Over the past decade, statewide rents have increased a seemingly modest 6%. However, incomes over the same period have dropped by 16%. As a result, the percentage of very low-income households who are cost burdened increased by over 30%. Moreover, Minnesota Housing Partnership reports that from 2000-2010, Minnesota had the fastest increase in households paying more than half their income for housing of any state. Most recent reports and our discussions with stakeholders indicate that Metro Area landlords are currently making up for an extended period of rent stagnation, with continued plans to raise rents."
Subsidized housing — where developers receive government financial assistance to build affordable housing — is an increasingly endangered resource, vulnerable to budget cuts at the state and federal levels. "Market rate" housing is unaffordable for large swaths of the population — we're talking rents that gobble up more than half of the gross monthly income of someone earning not even the low-income minimum wage, but double the minimum wage.
That leaves unsubsidized affordable housing. According to the report, unsubsidized affordable housing in the Twin Cities metro area "comprises at least 57% of all units with rents affordable to households at or below 50% of area median income (AMI); equating to as many as 120,000 units of housing."
Owners/landlords face both management and money challenges. The study looks at ways to help them, making an overall recommendation for a "light touch." Dozens of specific recommendations focus on ways to reduce operating costs, offer technical assistance, offer targeted, locally-specific financial incentives, and make regulatory changes. According to the report:
"The recommendations are meant to provide multiple levels of policy, educational, and financial interventions with the collective understanding that there is no single fix to successfully address the preservation or enhancement of unsubsidized affordable housing needs across the region."
There's a lot more to the report than I can summarize here — 50+ pages and almost as many pages of attachments and documentation. It's not always easy reading, but it's important for our future as a community.