3. Affordable and accessible housing: In 2040, all Minneapolis residents will be able to afford and access quality housing throughout the city.
Minneapolis is a magnet city attracting more residents and businesses each year. As a city Minneapolis is facing challenges as it grows, including a shortage of housing units that residents can afford, a rise in the number and percentage of cost-burdened households – especially among renters, and the presence of zoning regulations that have favored single-family housing at the expense of housing access since the era of segregation.
Housing Residents Can Afford
Minneapolis is growing faster than it has since 1950. The Metropolitan Council estimates that between 2010 and 2016 the city added over 12,000 housing units and more than 37,000 residents. With this growth comes increased demand for housing and an associated increase in housing costs and rents. As a result, housing units that were once affordable no longer are, and less housing is available for low-income residents of Minneapolis.
Since 2000, Minneapolis has lost roughly 15,000 housing units that are considered affordable for those earning 50% of the area median income ($31,650 for one person/ $45,000 for a family of four). These units generally still exist, but they cost more to own or rent, making them unaffordable to this demographic.
In 2017, for the 13-county metropolitan region, the U.S. Department of Housing and Urban Development (HUD) calculated a median family income of $90,400. Based on this figure, 50% of the area median income for a single-person household is $31,650 annually (or an hourly wage of $15.22 for a standard workweek and year), and for a family of four it’s $45,200 annually (or a household hourly wage of $21.73 for a standard workweek and year).
The majority of Minneapolis residents are renters and renter households are growing at a faster rate than owner households. When broken down by number of households, the two largest groups of residents in the city are renters earning less than 30% of AMI, ($28,300 per year) and homeowners earning more than 100% of AMI ($94,300 per year). Most people of color in the city are renters while the majority of the city’s white residents are homeowners.
Also since 2000, overall household incomes in Minneapolis have slightly decreased – but not equally across racial groups. White non-Hispanic and Asian households have seen increases in household income since 2000, while black households have experienced an approximately 40 percent decrease in income.
Since 2000 a growing number of residents, especially residents of color and indigenous people, have seen a decrease in household income preventing them from keeping up with rising housing costs. A decrease in the number of affordable housing units coupled with decreasing incomes greatly limits the ability of residents to find the housing they need throughout the city.
For a growing number of residents, especially residents of color, incomes are not keeping up with rising housing costs. This results in fewer housing units in fewer neighborhoods that are affordable to renters. For households of color that are renting this means there are few, if any, housing units that are affordable.
These trends Throughout this document there are many references to Affordable Housing. Affordable Housing is rental housing with rent and income restrictions (typically 60% of Area Median Income or below) or housing for homeownership with income restrictions (typically less than 80% of Area Median Income) as governed by local, state, and federal housing assistance programs. In comparison to Housing Affordability, which is access to homeownership or rental options based on housing price relative to household income. The loss of affordable housing units and changes in household income have resulted in a greater number of cost-burdened households – households in which more than 30% of household income goes toward housing mortgage or rental payments. Forty-nine percent of all households in Minneapolis are cost-burdened, but, similar to the change in household incomes, this is not equal across racial groups. Over 50% of black and American Indian households, and over 45% of American Indian and Hispanic households in Minneapolis are cost-burdened, whereas 1 in 3 white households are cost-burdened.
Impact of Zoning
Racial disparities persist in all aspects of housing. Until the 1960s, zoning regulations, racially discriminatory housing practices, and federal housing policies worked together to determine who could live in single-family houses in “desirable” neighborhoods. These determinations were based on race and have shaped the opportunities granted to multiple generations of Minneapolis residents.
In addition to the lack of sufficient affordable housing, many areas of Minneapolis lack diversity in housing type and size. This specifically limits the opportunity for multifamily housing, which impacts the availability of both affordable and life-cycle housing options – options that allow for aging in one’s community and staying connected to social support networks. This further restricts access to single family homes for households with growing families that desire that housing type and would prefer to stay in the city.
Areas of our city that lack housing choice today were built that way intentionally. In the first half of the 20th century, zoning regulations and racist federal housing policies worked together to determine who could live where and in what type of housing. This shaped the opportunities available to multiple generations of Minneapolis residents.
Following the Great Depression in 1934, redlining and other loan underwriting guidance from the federal government steered where the direction of private investment in housing could occur, this direction was called redlining. This practice prevented denied access to mortgages in areas with where Jews, African-Americans, and other minorities lived, as well as in the more densely populated and mixed-use parts of the city. Related guidance in Federal Housing Administration (FHA) underwriting manuals encouraged the segregation of land uses, also known as zoning, in order to reduce the financial risk of backing single family home loans near land uses deemed undesirable, such as factories and even multifamily housing. This guidance, from 1934, reinforced the approach that Minneapolis and other cities in the United States began years earlier through the introduction of zoning ordinances.
While the The FHA promoted zoning as an effective tool for assuring a “homogenous and harmonious neighborhood,.” In the view of the FHA, however, the FHA did not think zoning was not enough to accomplish the segregation of the races as a means of protecting property values. The FHA underwriting manual also made the case for racially restrictive covenants, using language that described people of color as undesirable neighbors in the same vein as nuisances such as odors and high traffic: “The more important among the adverse influential factors are the ingress of undesirable racial or nationality groups; infiltration of business or commercial uses of properties; the presence of smoke, odors, fog, heavy trafficked streets and railroads.” These practices allowed banks to deny mortgages and property owners to prevent the sale of a home based on race. As a result, areas of Minneapolis with higher densities and a mix of land uses experienced disinvestment, in part because banks did not lend in those areas.
These policies and regulations left a lasting effect on shaped the physical characteristics of the city Minneapolis and the financial well-being status of its residents. Areas of Minneapolis with higher densities and a mix of land uses experienced disinvestment, in part because banks did not lend in those areas. On the outskirts of the city, a post-Depression development pattern emerged with little variation in housing types and density and with few areas for commercial development. Today, Although racially segregated housing is no longer enforced in these “desirable” neighborhoods the zoning map in these areas remains largely unchanged from the an era of intentional racial segregation in which discrimination was legal, and still contributes to disparities communities of color and indigenous people experience today such as, access to commercial goods and services, quality housing, and public transportation. The City wishes to reverse the effects of these historical policies and create a more diverse, equitable and affordable housing supply for all residents, including residents of color and indigenous residents.
To achieve the goal of residents affordable and accessible housing To address these issues, the City of Minneapolis will expand opportunities to increase the housing supply in a way that meets to meet changing needs and desires. This means allowing more housing options, especially in areas that lack choice and areas with access to frequent and fast transit, employment, and goods and services. It also means creating and expanding new resources and tools to create and preserve affordable housing and produce and preserve affordable housing, to minimize the displacement of existing residents, and to ensure housing is maintained to promote health and safety. The City will also need to invest in its residents, especially residents of color and indigenous residents, to ensure that barriers to housing are identified and removed it identifies and removes barriers to accessing and retaining housing.
19 Policies relate to this goal. Click on a policy below to learn more about it.
Access to Housing
POLICY 1 REVISED
Affordable Housing Production and Preservation
POLICY 33 REVISED
Affordable Housing Preservation
POLICY 34 REVISED
Innovative Housing Types
POLICY 35 REVISED
Innovative Housing Strategies & Data-Driven Decisions
POLICY 36 REVISED
Mixed Income Housing
POLICY 37 REVISED
Affordable Housing near Transit and Job Centers
POLICY 38 REVISED
Development Near METRO Stations
POLICY 80 REVISED
POLICY 39 REVISED
POLICY 40 REVISED
POLICY 41 REVISED
POLICY 42 REVISED
POLICY 43 REVISED
POLICY 44 REVISED
Coordinated Development Strategy
POLICY 23 REVISED
Leverage Housing Programs to Benefit Community
POLICY 45 REVISED
POLICY 46 REVISED
POLICY 47 REVISED
POLICY 48 REVISED