Twin Cities gentrification continues to displace low-wage workers

More than one in four Minnesota households — nearly 550,000 families — spend more than 30 percent of their income on housing, making it likely that they cut back on necessities like food, education and medicine simply to pay their rent or mortgage.  — Minnesota Housing Partnership

For all of its general income prosperity, especially compared to other places in the country, the Twin Cities region still has a mismatch between the enormous amount of residential property that has been created, and the ability of its people to pay for it.  — Benjamin McDaniel

Not too long ago, the National Low Income Housing Coalition (NLIHC) released its 2018 “Out of Reach Report” in which it notes more than 11 million American households have incomes that are insufficient to meet their rents. In the latest report, the NLIHC ranks Minnesota as the 22nd most expensive out of all 50 states (plus Puerto Rico and the District of Columbia) in terms of its housing costs.

It’s no secret that the lack of affordable housing in Minnesota, and in particular in the Twin Cities, has remained one of our biggest issues in the 21st century. This year does not represent a significant change over recent years, as Minnesota has fluctuated between the 21st and 24th most expensive state for housing since 2012. And, as has been the case for several years running, Minnesota remains the second most costly state (behind Illinois) in the Midwest region.

This consistent position, of course, suggests that while things may have not gotten much worse, they certainly haven’t gotten any better. Today, in order to afford a fair market one-bedroom apartment in Minnesota, an individual would need to earn a wage of at least $14.83.

For a one-bedroom in the Minneapolis-St. Paul metro, the requisite wage would be $16.62. For a two-bedroom, the wage is $20.94, and for a three-bedroom, it is $29.75. These are scant increases over the previous couple of years, but again, the numbers continue to move in the wrong direction as more and more Twin Cities residents struggle to afford suitable housing.

Consider that a minimum wage worker in Minneapolis, St. Paul, or the surrounding suburbs would need to work a total of 57 hours per week just to pay the fair market rent on a studio apartment. A one-bedroom place would require at least 69 hours of work a week.

Moreover, nearly half of all renter households in the metro area are officially classified as cost-burdened, meaning that they spend more than 30 percent of their total income on housing costs. Out of Minnesota’s 87 counties, Ramsey and Hennepin counties respectively rank second and seventh for the largest percentage of cost-burned households.

Things were not always this way, as the Twin Cities was once considered a model of affordable housing development. In the early 1970s, more than 80 percent of housing in the metro area was considered affordable. Yet, in a single decade the share of affordable housing dipped below 60 percent.

To make matters worse, over the last two decades, as cited by the Metropolitan Council, 80 percent of all affordable housing construction has been concentrated in either the developing suburbs or already developed suburbs.

It’s interesting to note, that as of 2017, the estimated population of Minneapolis has risen to more the 422,000 people, a 10 percent spike since the 2010 census. Likewise, St. Paul’s estimated population is now 309,000 which is an 8.5 percent increase during the same period.  For Minneapolis, this is the largest percentage increase since the 1930s, and for St. Paul, the largest since the 1950s.

So, where is this huge influx of people over the last few years (40,000 in Minneapolis, 24,000 in St. Paul) ending up? Could it be in all of these new upscale condos that now dot the landscape? Or perhaps in formerly affordable structures that have existed for years but lately have been transformed into higher rent communities?

We’ve been told that the type of gentrification taking place in the Twin Cities would not be as destructive as it has been in cities such as San Francisco, Seattle, Portland, Washington and Atlanta. However, these newer developments inevitably raise property values and rents wherever they pop up, often displacing those who have set roots in these neighborhoods for generations.

I’m all for development. But the residents of Minneapolis and St. Paul have been neglected for far too long. After all, no one should have to work 57 hours a week just to afford a studio apartment.