Legislative Panel Agrees it’s Time For All to Come Together For Solutions
Housing experts and legislators took a look at the current housing market conditions and discussed ways to address the region’s affordability challenge during the Housing 2020: Session Preview hosted by Housing First Minnesota on Thursday morning.
The event featured a unique look at the state’s housing market, with data and analysis related to new construction, existing inventory and multi-family housing from Housing First Minnesota, Minneapolis Area REALTORS® and the Minnesota Multi Housing Association (MHA).
“We have the highest new home costs in the Midwest, with the median new home price knocking on the door of $400,000” said Nick Erickson, Housing First Minnesota “While we increased our homeownership rate in 2019, it’s not all good news, we also have one of the highest equity gaps in homeownership.”
“People are staying in their homes for longer. People used to move every five to seven years, now it’s become a game of musical chairs where they are not going to get up from their seat until they have a place to sit down,” said David Arbit, Minneapolis Area REALTORS. “Buyers are running into the inventory wall, there just isn’t enough product to fuel this extra demand, especially for first-time buyers. Demand is back to all-time highs, while new homes coming onto the market is still very much suppressed.”
Each sector of the housing market reported too few new units available at an affordable price and existing inventory near historic lows. More and more Minnesota families are being priced out of the housing market. This is placing pressure on the rental market, limiting move-up options and leaving the region’s housing ecosystem broken.
“We’ve seen an increase in development activity, particularly at the high end of the market, this is a good thing for our region, as it increases the overall inventory of the rental market, which allows for future filtering,” said Bernadette Hornig, Hornig Companies and the Minnesota Multi Housing Association. “High development costs make it impossible to build anything but apartments at the high end.”
The legislative panel featured Rep. Jim Nash, Rep. Peter Fischer, Sen. Kari Dziedzic, and Sen. Rich Draheim. This group of elected officials from all four caucuses represent a diverse geographic area and perspective. Each have a background in housing policy and sit on key housing-related legislative committees.
“When we look at housing it is so intertwined, the issue with homelessness, multi-family housing, and single-family homes,” said Sen. Rich Draheim. “I applaud the people in this room for working on one of the key factors, the cost of housing. We need to work together, and we need to make housing a priority.”
“I look at this like a quadratic equation and there’s a lot of different integers in order for this to get solved,” said Rep. Jim Nash. “This is not about one singular issue that we are addressing, sometimes we are talking about fees or different things, what we’re talking about is that equation that has to get solved and you have to show your work and do it right.”
All four-panelists agreed that everything must be laid on the table this legislative session in order to fix the region’s housing affordability problem.
“Each community is unique and doesn’t like to be told what they can and cannot do, the problem is collectively we have to figure out the problem,” said Rep Peter Fischer. “There are communities that are working with developers to say what can we do to help you get a little more density in here, to make it more affordable, but it’s because they are empowered by their city council, and their city council’s been empowered by the people to be able to do that to be a little more creative, and that’s what it eventually comes down to is there’s the NIMBY’s that say we don’t want it in our backyard.”
“I think we need to have everything on the table, and the legislature needs to have a very open discussion on what works,” said Sen. Kari Dziedzic. “I want to find a way to help stabilize people and get them in homes.”
View photos and video from the event available here >>
Download the full market report here >>