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Thousands of low-income Minneapolis families are struggling to obtain safe and affordable housing. Their wages haven't kept up with inflation and rising prices for necessities like food and heat leave less to cover rent. Rental units they can afford are increasingly few and already occupied, and available units are increasingly more expensive than they can afford.
The reasons for this crisis are well-known, accepted by broad consensus of experts: There exists a housing shortage decades in the making; a growing population of higher-income households is bidding up prices for what housing is available; income disparity is widening to the disadvantage of renters at lower price points.
In short, the forces of housing supply and demand are driving up rents just as the full impacts of an inflationary economy take hold.
Unfortunately, this consensus, much like that of scientists on the causes of climate change and epidemiologists on the safety of vaccines, is vulnerable to politically manufactured skepticism and misinformation that, when spread to a sufficiently vocal minority of voters, can be a counterproductive force to addressing the affordable housing crisis.
In Minneapolis, the new myth that "building more housing increases neighborhood rents" is taking over for the old myth that "building more housing lowers neighborhood property values." We reject both propositions. Like those who succumbed to the political pressures of NIMBYism, policymakers who accept so-called housing supply skepticism risk locking our city into a worsening housing affordability crisis.
The vast majority of rental units affordable to low- and moderate-income households are in unsubsidized, market-rate housing that is already built and has paid off its mortgage debt. It therefore doesn't face the same cost pressures, like rising land and construction prices, as newer properties. This keeps rents lower and makes these units naturally more affordable to low- and moderate-income residents.
The balance between these naturally occurring affordable housing (NOAH) units and new housing development is critical to a healthy rental market.
Government interventions like 4d programs, project-based vouchers and capital subsidies confer financial incentives to property owners who keep and reinvest in NOAH properties so they remain in the housing stock.
Currently, we have a major market imbalance. During the Great Recession, the Twin Cities region built only a fraction of housing units needed based on actual renter household growth. The region added only half its goal of 30,600 new affordable units from 2011 to 2020. According to the Federal Reserve Bank of Minneapolis and the Itasca Project, the region needs to produce 18,000 units of housing per year through 2030 — a 30% increase over annual production from 2010 to 2020 — to compensate for past underproduction and keep pace with projected household growth.
While building more housing is necessary to address our affordable housing crisis, it's not sufficient to fix the immediate problem facing many families. Many households with the lowest incomes simply cannot afford the price of rent despite working harder than ever. Real wages in many key sectors — including transportation, education and health services — are declining while costs of living are increasing.
The most immediate, effective and straightforward intervention to help these families is direct rental assistance. There is substantial evidence backing the efficacy of direct rental assistance. The Center on Budget and Policy Priorities found rental assistance programs like Housing Choice Vouchers lifted 2.9 million people out of poverty in 2019, including 1.3 million children, and helped to significantly reduce the poverty rate among renters, from 24.7% to 15.3%.
The Urban Institute found that every dollar spent on rental assistance saves taxpayers $1.50 in other costs like emergency room visits, shelters and other public services needed when families experience homelessness.
Additionally, consistent enforcement of housing codes and fair housing laws that protect against discrimination, unjust evictions and uninhabitable living conditions can help to ensure that our most vulnerable families are treated fairly, have quality living conditions and are at lower risk of displacement.
Eric Anthony Johnson is president and CEO of Aeon, a nonprofit developer, owner and manager of affordable housing. Adam Duininck is director of government affairs for the North Central States Regional Council of Carpenters.