The authors of the Oct. 18 commentary "Private market must be a big part of the solution" to the Minnesota affordable-housing crisis assert that "in Portland and Seattle, thousands of new market-rate units have lowered rents in previously existing properties." They appear not to have noticed that in Minneapolis, despite the recent development of huge numbers of new market-rate apartments, rents at all rent levels are soaring. So whatever might have happened in Seattle, it isn't some sort of natural law that new market-rate development leads to reduced rent in older apartments. In fact, here, the private market is not only not a big part of the solution, it's a big part of the problem. It is private-market actors that are acquiring affordable apartments, putting in granite countertops and raising the rent by hundreds of dollars. It's surprising that some "experts" fail to notice what's in front of them.
Jack Cann, St. Paul
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While I am less than eager to jump into a debate with economists over supply and demand, caution should be applied to the arguments made by Minneapolis Federal Reserve officials Ron Feldman and Mark Wright in their commentary "Private market must be a big part of the solution."
Feldman and Wright argue that development of market-rate rental housing is critical to reducing the cost of housing. They cite Portland and Seattle as evidence: thousands of new units are lowering rents there, they say.
Granted, the supply of housing, be it new market-rate units or affordable, is a factor in rent setting. However, "market" development is a blunt instrument when public officials are trying to ensure housing affordability across the income spectrum and across geographies.
The Portland experience underscores the shortcoming of a market solution. While production of rental housing is up, it is skewed to smaller apartments. As a result, rent increases for one-bedroom apartments have slowed (to 2 percent) while rent increases for family-sized units have maintained their momentum (annual 5 percent increases).
Seattle, too, faces this challenge of the market providing units, but not efficiently responding to the need faced by larger low-income families. Furthermore, despite vigorous housing production in Seattle, the overall supply of low-income affordable units remains in a precipitous decline.
This is why city governments in both communities are committed to aggressive goals for affordable apartments — a 20,000 apartment 10-year production goal in Seattle, and 10,000 units over 20 years in Portland.