Met Council: We Still Need More Housing

Researchers at the Metropolitan Council have produced a slide show titled “We still need more housing.” The numbers come from permit data collected across the 7-county Minneapolis-St. Paul region. Below are some of the slides, capturing the scale of our regional housing shortage. View the whole thing here.

The region added 17,127 homes in 2018. This exceeds the average of 15,327 over the period between 1970-2017.

When you factor the number of homes lost to demolition, the region added 16,492 homes in 2018.

Between 2010-2018, the region added new residents (8.5%) faster than it added new homes (5.3%).

This means the region is 38% behind where it would need to be just to keep up with the growing population. This places us towards the bottom compared to peer regions.

5% is considered the lower end of a healthy vacancy rate. “Healthy” means that rent increases aren’t accelerated by competition for scarce empty apartments. In this chart, you see rents diverge from inflation as the vacancy rate dips below 5% in 2014-2015. “Average asking rent is $175 higher than if rents had risen with inflation.”

The region is short by 15,200 homes — the number required to achieve a minimal healthy vacancy rate of 5%.

“For units that tend to be less expensive, not many are being added.” This is a reference to what’s known as “missing middle,” including duplex/triplex/fourplex and small apartment buildings. (Minneapolis has enacted reforms that have recently started to encourage these “missing middle” types of housing.)

The further you get from city centers the more likely apartment buildings are to be restricted to older adults and inaccessible to the general population. 53% of urban and suburban multifamily buildings are built for the general population. This drops to 44% for “suburban edge” and “emerging suburban edge.”

Regional growth is spread unevenly, with many census tracts not adding any new housing at all — including in many parts of Minneapolis which has focused growth around Uptown, Downtown, and the University area.