Affordable housing, especially naturally occurring affordable housing (or workforce housing), has been described as “critical infrastructure” — a term used by governments to describe assets that are essential for the functioning of a society and economy.
This is not overblown rhetoric; affordable housing is essential. Families need a safe and dignified place to raise children; workers need homes near job opportunities that are within their budgets; employers need a locally housed workforce so that they can grow their businesses.
Over the last two years, as the affordable housing crisis has worsened across Minnesota, and in particular in the Twin Cities metro area, a patchwork response by governments has been to consider or implement broader housing regulations. This is often a political response to vocal activists who persuade unimaginative policymakers with truly heart-wrenching stories. But the “more-regulation” housing strategy from the city of Minneapolis (and other cities) will not serve those who need affordable housing well over the long-term.
Developing and preserving housing requires resources and imagination. The leadership on housing to date has produced a mandate in Minneapolis for rental property managers to participate in the Section 8 voucher program. This same policy is now under consideration in other regional cities. Other proposals are being circulated: “Just Cause Eviction,” “Advanced Notice of Sale to City,” “Tenants’ First Right of Refusal on Sale” and so on.
None of these policies actually helps create affordable housing. Just ask residents of New York, Seattle or Portland whether policies like these are working. Those cities struggle with chronic homelessness and unaffordable rents.
Increased regulation and burdensome policies have significant negative unintended consequences, such as higher rents. The proposed policies will deter property owners from developing housing that is affordable and will accelerate the upgrading of tired housing assets into more luxurious rentals in desirable neighborhoods.
Rather than other cities following Minneapolis with municipal “me too” policymaking, the Twin Cities should urgently develop a thoughtful regional approach.
What would real leadership on affordable housing look like? It would understand that fundamentally we have a supply problem, not a regulatory problem. Accordingly, it would reduce the cost of private development in the planning and zoning review process, as well as reduce the costly regulatory burden on multifamily property owners and developers.
One strategy to mitigate the economic impact of ever-higher property taxes and municipal utilities on lower-cost housing would be to add a “This Old Apartment” valuation to incentivize investment in capital improvements while maintaining affordability in older apartments.
Finally, leaders would prioritize government budgets to fund subsidized affordable housing across the region.
These ideas and more like them require creativity to make them workable policies, but they are the kind of common-sense solutions that might address the present crisis. All of the stakeholders must be at the table, especially the property owners who are the current stewards of the region’s housing infrastructure.
The solution to this problem is rooted in public-private partnerships that facilitate greater investment in affordable housing. There has been no effort yet by municipalities, or by the region, to engage property owners and developers in a strategic dialogue about this serious challenge to the regional economy.
Critical infrastructure like affordable housing deserves better leadership.
Cecil Smith, of Minneapolis, is the owner of Cornerstone Property Professionals and chair of the Minnesota Multi-Housing Association.