Housing

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 percent of the area median income. 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, 50 percent 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).

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.

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 renters that means there are few, if any, housing units that are affordable. 

The loss of affordable housing units and the changes in household income have resulted in a greater number of cost-burdened households – households in which more than 30 percent of household income goes toward housing. Thirty-seven 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 percent of black households and American Indian households, and over 45 percent Hispanic households in Minneapolis are cost-burdened, whereas one in three white households are cost-burdened.

Racial disparities persist in all aspects of housing. The disparities that Minneapolis residents  experience are intertwined with the city’s development due to racially discriminatory housing practices and federal housing policy. 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, redlining and other loan underwriting guidance from the federal government steered where private investment in housing were made. This practice prevented access to mortgages in areas with Jews, African-Americans and other minorities, 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 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.

The FHA promoted zoning as an effective tool for assuring a “homogenous and harmonious neighborhood.” In the view of the FHA, however, zoning was not enough to accomplish the segregation of the races as a means of protecting property values. The FHA underwriting manual 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 odor 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 policies and regulations left a lasting effect on the physical characteristics of the city and the financial well-being 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, the zoning map in these areas remains largely unchanged from the era of intentional racial segregation. This has shaped the opportunities available to multiple generations of Minneapolis residents and significantly contributed to many of the disparities people of color and indigenous people experienced and continue to experience. 

To address these issues, the City of Minneapolis will expand opportunities to increase the housing supply in a way that meets changing needs and desires. This means allowing more housing options, especially in areas that currently lack housing choice and in areas with access to frequent and fast transit employment, and goods and services. It also means creating and expanding new resources and tools to 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 it identifies and removes barriers to accessing and retaining housing.