Insights on Minnesota Housing Policy Developments and Outcomes
Explore the latest updates on Minnesota's housing inventory, home prices, rental trends, and the impact of housing shortages on renters. Learn how new data confirms that increased housing supply can lower costs and how rent growth correlates with housing additions in various jurisdictions.
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Housing Policy Developments & Outcomes Housing Policy Developments & Outcomes Presentation for Minnesota Senate Housing and Homelessness Prevention Committee January 28, 2025
Minnesotas Housing Inventory 30% Lower Than 2018 Level 30,000 25,000 20,473 20,000 15,000 13,907 10,000 5,000 - 12/1/2018 12/1/2019 12/1/2020 12/1/2021 12/1/2022 12/1/2023 12/1/2024 All MN MSAs Minneapolis, MN Duluth, MN Rochester, MN St. Cloud, MN Source: Zillow Data
Minnesotas Home Prices Up 38% Since End of 2018 $400,000 $350,000 $330,487 $300,000 $250,000 $238,902 $200,000 $150,000 $100,000 $50,000 $- 12/1/2018 12/1/2019 12/1/2020 12/1/2021 12/1/2022 12/1/2023 12/1/2024 Minnesota Minneapolis, MN Duluth, MN Rochester, MN St. Cloud, MN Source: Zillow Data
Rents Rise Quickly When Shortages Occur Source: Data from Apartment List
Housing Shortage Burdens Minnesota Renters 49% of Minnesota renters are spending more than 30% of their income on rent (2022) 26% of Minnesota renters are spending more than 50% of their income on rent (2022) In 2019, figures were 42% and 21% Restrictive zoning also pushes up transportation costs, vehicle miles traveled
Most households have 1 Most households have 1- -2 people; large majority of homes are single 2 people; large majority of homes are single- -detached detached Share of US Households by Household Size 100% 63% 80% 60% 28% 40% 9% 20% 0% 1-2 People 3-4 People 5+ People Share of US Homes 100% 68% 80% 60% 23% 40% 10% 20% 0% Townhouse or Duplex Multifamily Single Detached
Rent Growth Is Low Where Housing Has Been Added 35% 30% 30% 25% 23% The four local jurisdictions shown added proportionally more households than the U.S. overall from 2017-21 indicating low demand was not the cause of their slow rent growth. 20% 15% 12% 10% 8% 7% 5% 5% 3% 2% 1% 0% 0% Minneapolis, MN New Rochelle, NY Portland, OR Tysons, VA United States overall Increase in homes, 2017-21 Rent growth, 2017-23 Source: Pew s analysis of Apartment List rent estimate data (Jan. 2017-Jan. 2023) and U.S. Census data on housing units (2017-2021)
Allowing More Housing Reduces Displacement Percentage change in Black and Hispanic populations by city, 2000-21 40% Houston added 33% to its housing stock since 2000, vs. avg. of 14% in NYC, LA, & Chicago. 17% 10% 5% 4% -6% -19% -25% Source: ACS Census Bureau data
Housing Shortage Hurts Low- and Moderate-Income Households Most National Average Rent Change by Zip Code Income Quartile 70.0% 61.9% 60.0% 54.0% 51.5% 50.0% 43.9% 40.0% 30.0% 20.0% 10.0% 0.0% Lowest-Income Quartile 2nd Quartile 3rd Quartile Highest-Income Quartile Source: Pew s analysis of Zillow rent estimate data (Sep. 2017-Sep. 2024) and IRS Income by ZIP Code data (2017)
Supply Boost Has Driven Down Rents in Lower Supply Boost Has Driven Down Rents in Lower- -Cost Apartments Cost Apartments Source: chart and rent data from RealPage
How Housing Costs Drive Homelessness Levels How Housing Costs Drive Homelessness Levels
Homelessness Increased in Areas Where Rents Soared Percent change in homelessness per 10,000 residents, 2017-2022 Rent Growth Homelessness Rate Growth Sources: HUD, Census ACS, Apartment List; Homelessness data for CoC level (often county)
With More Homes, Minneapolis Saw Low Rent Growth, Lower Homelessness With More Homes, Minneapolis Saw Low Rent Growth, Lower Homelessness Income needed to afford median apartment rent dropped from 87% of area median to 72% from 2017- 2022 Sources: Department of Housing and Urban Development, Apartment List, Census
Zoning Reforms Seeing Increased State Adoption Zoning Reforms Seeing Increased State Adoption
States Adopting Reforms to Allow More Housing Types Efforts seek to curb harms of restrictive zoning Enabling accessory dwelling units (ADUs) Legalizing multifamily in commercial areas Streamlining permit approval processes Allowing use of manufactured housing Limiting parking mandates Legalizing micro-units/co-living & house sharing
State Laws to Enable More Homes Becoming Much More Common Average number adopted by states per year: 2012-2016: 1 2017-2022: 18 2023-2024: 48
2023 Pew Survey: Share of Americans Favoring Each Policy Source: https://www.pewtrusts.org/en/research- and-analysis/articles/2024/05/29/strong- support-across-partisan-lines-for-policies- that-boost-housing
Alex Horowitz Alex Horowitz ahorowitz@pewtrusts.org The Pew Charitable Trusts Pewtrusts.org/housingpolicy
