Councilors' View: Proposal would create badly needed housing across Minnesota
From the column: "Our housing shortage is a statewide problem; therefore, we need statewide assistance to solve our housing crisis."
As a state, we are stronger when everyone has access to prosperity. One key to that prosperity is access to a safe, affordable home that allows its residents to build wealth, which helps our communities and businesses thrive.
This path is getting narrower. Housing prices are increasing far above income, rent is up 14% in Minnesota, and home values are up 24% since 2000. Wages over that period meanwhile have increased just 1% for renters and 6% for homeowners.
We also know that housing is expensive to build, and the need is so significant that no city or county will be able to build enough to meet the demand. We also know that lack of housing opportunities hurts our local economies. Businesses in Minnesota from Roseau to Willmar and in the Twin Cities are having a difficult time attracting workers due to the housing shortage. This is stifling economic growth and expansion in our cities and state.
We also know there are currently 27,000 Minnesotans who could afford homeownership but who are currently occupying a rental unit that would be affordable for a low- to moderate-income renter. Creating more homeownership opportunities would open these affordable rental opportunities to households which desperately need it.
Our housing shortage is a statewide problem; therefore, we need statewide assistance to solve our housing crisis.
That is why, to us, as local policymakers, it was a welcomed surprise to see that Gov. Tim Walz put forth a historic, pragmatic budget that would make much-needed investments in housing in our state. The Governor’s Supplemental Budget on Housing, over the course of three years, calls for investing $719.5 million, with $225 million alone for fiscal-year 2023.
There are several key areas the governor calls for making investments to help create more Minnesota housing opportunities.
- Historically, the Challenge Fund has created around 100 units a year; the governor’s proposed three-year investment would create 1,225 housing opportunities, according to estimates.
- Investing in the Workforce and Affordable Homeownership Fund would increase single-family homes across the state. The governor’s proposed $12 million per year to the fund would create an estimated 900 homes over three years.
- The Greater Minnesota Workforce Housing Fund builds new rental housing in Greater Minnesota, typically in towns with populations under 5,000. Additional funding for the fund in the governor’s proposal promises to create an estimated 865 new units through Greater Minnesota — units that are critical for economic growth and job creation.
The governor’s supplemental budget is not only written to produce nearly 3,000 more units for Minnesotans to live in, it would increase housing stability by making investments in some of our most vulnerable populations. Increased funding for down payments and closing-cost assistance would serve 2,667 households. A $100 million investment to preserve and improve existing housing commonly referred to as “naturally occurring affordable housing” would preserve an estimated 2,850 homes. Increased investment in supportive housing promises to improve access to health care and reduce the use of expensive emergency services. And increased funding of $19.5 million for the Family Homelessness Prevention and Assistance Program would serve an estimated 19,250 households over three years.
The governor’s proposal would create, preserve, and assist with purchasing an estimated 8,507 housing opportunities. While the governor’s budget does include some one-time spending, it also increases the base spending on housing. This is something that hasn’t been done since the administration of Gov. Jesse Ventura.
This commitment to investing in our housing stock both new and old across Minnesota is needed, as all of our communities are facing a housing crunch.
Arik Forsman is a city councilor at-large and president this year of the Duluth City Council. Noah Hobbs is a councilor at-large. And Roz Randorf represents District 3 (including downtown, Central Hillside, and Park Point) on the Duluth City Council. They wrote this exclusively for the News Tribune.