In this year when foreclosures of homes have hit an all-time high, the topic of affordable housing seems especially relevant. Many of the people who lost homes to foreclosure did so because they were encouraged and helped to buy homes that they really couldn’t afford. As the housing market boomed, buyers and financers didn’t consider the meaning of “affordable.” Housing is “affordable” if it costs no more than 30% of a family’s income—which means not just the income at the time the house is bought but also the income that the family will have in a few years when the grace period is over and the monthly cost rises. Over-optimism, or foolishness perhaps, led many people to commit to spending a higher percentage of their income on housing, leading to their inability to pay and, eventually, the loss of that housing.
Looking beyond the mistakes of individuals, though, there is a deeper question. Why doesn’t Minneapolis have enough housing at different levels of affordability so that some type of housing is available to everyone at no more than 30% of their income? Why isn’t there as much housing for people making $30,000 a year as for people making $80,000? If you look at the development projects started in the areas near Standish and Ericsson in the last few years, you will see that they typically offer “market rate” housing—some of it “luxury condos,” which are at the high end of market rate. (In our own neighborhoods, only one development project was completed, and it has market rate units.) Of course, developers prefer to build high-end properties so that the prices (or rents) are higher. But the City of Minneapolis wants to increase affordable housing and offers subsidies to builders who will include “affordable” units. Why aren’t more builders doing that?
This is where emotion and misunderstanding frequently enter the picture. Neighborhood residents often get upset at the idea of “affordable housing” and fight against it. The term may evoke pictures of very poor people living in high-rise housing projects. But this is an extreme way of looking at the situation. Everybody needs affordable housing. One thing the city is trying to do is increase the availability of housing for people whose income is at 50% of the “metropolitan median income” (MMI). What would you guess that 50% of MMI is? It may not be evident to us in South Minneapolis, but the median income of the metropolitan region (that is, the point at which half of the incomes are higher and half are lower) is about $76,000. So a family making 50% of MMI has an income of about $38,000. That’s who is targeted when housing is made affordable at the 50%-MMI level. (The city also wants to increase housing for people at the 30% of MMI level; they make around $24,000.) Looking at it another way, the housing that is in very short supply in Minneapolis is that available to people in service jobs (teachers, nurses and nursing home workers, day care providers, bank tellers, taxi drivers, sales clerks), to many self-employed people, to many seniors, and to young people starting out in life.
The Standish and Ericsson neighborhoods have long been seen as particularly affordable places to live, and residents are proud of their houses. We have so many small, affordable houses that there is practically no room for larger developments. Eventually, though, change will come and we will have the opportunity to make affordable housing available to more people. The 38th St. corridor is slated for some multiunit housing. The Hiawatha corridor will eventually have lots of development. When those projects begin, let’s be thoughtful about affordable housing, remembering that it offers to people something that we have had and appreciated—a place to live that doesn’t cost us an unsafe amount of our earnings.