- A Citizen's Guide to Affordable Housing Policy in the Twin Cities
Dimensions of the Metropolitan Area's Affordable Housing Needs

When the St. Paul Public Housing Agency opened its Section 8 voucher waiting list in April 2007 for the first time since 2002, nearly 11,000 low income households submitted applications.  This flood of applications emphasizes the troubling picture in the metropolitan area when it comes to affordable housing needs.  Recent studies by the BBC and Metropolitan Council taken together show that there were approximately 170,000 cost-burdened lower income households at the start of the current decade, and an additional 22,000 new low income households expected to be added during this decade, and yet another 28,000 - 31,000 low income households added during the next decade, for whom their will not be affordable housing available.

The affordable housing shortage contributes to Twin Cities regional disparities of race, class and place. [1]   Though the poor remain concentrated in the two central cities, a disproportionate share of less skilled jobs available to them are now located in the suburbs. [2]  Thus, the focus on suburban affordable housing production becomes critical.  Suburban areas simply have far more potential sites available for production of new housing opportunities and developing affordable housing on these sites provides greater housing choice to low income households as well as access to jobs and schools.

At the same time, the Metropolitan area is witnessing several phenomena that have a significant impact on existing affordable housing and the production of sufficient new housing to meet the need: 

  • Redevelopment projects which eliminate existing affordable housing;
  • The development of large parcels of vacant land with potential to create new affordable housing opportunities, often with no consideration of the need for affordable housing;
  • "Not In My Back Yard" (NIMBY) rejections of proposed affordable and high density housing; and
  • Limited prospect of increases in public subsidies for affordable housing production.
  • Affordable Housing Needs in 2000

    HUD data indicate that at the 2000 census, there were over 139,000 households whose incomes were at or below 50% of the area median income, or AMI, (adjusted for household size) who were paying more than 30% of their incomes for housing, or living in housing that was overcrowded or without basic facilities.  These households were 67.9% of all households with incomes at or below 50% of AMI.  In contrast, only 9% of households with incomes greater than 80% of AMI had similar problems.  A 2003 study, "The Next Decade of Housing in Minnesota"[3] found 171,062 metropolitan area households whose incomes were at or below 60% of AMI (without adjustment for household size) paying more than 30% of income for housing. 

    New Affordable Housing Needs from 2000 to 2010

    The Next Decade of Housing in Minnesota study estimated new lower income households to be added to the metropolitan area population during the decade 2000-2010.  Based on assumptions about how much of that new need could be addressed by the market and how much could be addressed by the existing level of housing subsidy programs, BBC estimated that over 22,000 of these new households who would be unable to find suitable affordable housing:










    New Low Income Households










    Unmet Need















    Additional Affordable Housing Needs 2011-2020

    The Metropolitan Council then used a similar methodology to project affordable housing needs to accommodate new lower income households projected for the decade 2011 to 2020. See, "Determining Affordable Housing Need in the Twin Cities 2011-2020." The Council projects 64,100 new households needing affordable units for 2011-2020.  It also projects that 20,300 of that demand will be met by existing units on the private market without subsidy.  That leaves 43,800 new affordable units needed.  The Council added 7,200 units to that number to reflect the need for 5% vacancies (2,200 units) and 5,000 units to meet existing need for homeless households for a total of 51,000 units.

    The Council has apportioned this 51,000 unit need among cities as the number of new units for which each city must plan as part of their comprehensive plan rewrites in 2008. During the last round of comprehensive plans, the Council instructed cities to base their affordable housing efforts not on how much housing was needed, but on the much more modest Livable Communities Act (LCA) goals cities had negotiated with the Council in 1995.  Now the Council will issue its new instructions basing housing planning obligations on its projections of actual need rather than negotiated goals which were based on past performance.  This is a significant advance, even though the projections focus solely on projected new need and ignore the massive number of households who are already inadequately housed.

    But this advance is tempered by a host of problems which the Metropolitan Council has not attempted to address.  First is a shortage of needed financial resources.  The Council did project 5,600 new units produced by the market to be affordable, leaving additional funding needed for 45,400 units.  The Next Decade of Housing in Minnesota study found that currently available sources of subsidy were likely to provide only 38% of this decade's affordable housing need not met by the market: approximately 14,000 units.  In the current funding environment, it is unreasonable to expect significantly more subsidy to be available in the next decade.  Thus the Council's projections suggest no identifiable source for approximately 28,000 units (if subsidy is available for 38% of the need) to 31,000 units (if subsidy is available for approximately 14,000 units, as in the current decade). 

    These shortfall figures are probably a serious underestimate.  They relies on faith that the private market will somehow accommodate a substantial portion of the new need.  They do not take into consideration any of the thousands of affordable units likely to be lost through redevelopment during the coming decade.  Most importantly, the Council's projected need includes only the projected need based on growth of low income households; it does not include addressing those low income households who are currently living in the metro area and in need of affordable housing, except for 5,000 households who are actually homeless.  Nor does it include those new households which the Next Decade of Housing projected would not find affordable housing during the current decade. It is certainly not necessary to build all new units in order to address the needs of already existing seriously underhoused households.  But by simply ignoring this huge need, the Council has seriously understated the dimensions of the problem and the need for action at the local level to address the problem. 

    Balanced regional growth, particularly growth that addresses disparities of race, class and place, hinges in large measure on the capacity and willingness of our region, its government and communities to effectively address affordable housing need.  If we are to achieve this balanced growth and its benefits, we must be able to expand the resources available, use those resources more efficiently, and find ways to make more housing affordable with less reliance on public resources.

    [1]  "Mind the Gap:  Reducing Disparities to Improve Regional Competitiveness in the Twin Cities," Brookings Institution (2005).

    [2]  Id at 23.

    [3]  Prepared by BBC Research and Consulting for the Family Housing Fund, Minnesota Housing Finance Agency and the Greater Minnesota Housing Fund.


    Housing Preservation Project, 2007
    Project Sponsors
    Housing Justice Center Hubert H. Humphrey Institute of Public Affairs
    Institute on Race & Poverty The McKnight Foundation