With Twin Cities housing more affordable than other urban areas, will it stay that way?
The 2020s have thus far been a volatile decade for housing prices in large cities in the United States, with the Twin Cities being no exception. After a steep drop in rental prices due to the Covid-19 pandemic in late 2020, rents in Minneapolis have held fairly steady according to Apartment List, a website that tracks rental data nationwide. Since January, median rent rates in Minneapolis are up 1.6 percent, but down 0.8 percent when compared to April of last year.
In 2021, Minneapolis residents voted to authorize the city council to enact a rent control ordinance. Yet almost two years later, the council has not passed any such ordinance.
While Minneapolis does not have rent control, St. Paul’s rent stabilization policy has been in effect for just over a year. However, an amendment to the ordinance stripped away rate protections for some renters, but the Minnesota Youth Collective (MNYC) says that approximately two-thirds of St. Paul renters are still covered by the ordinance.
Out of the 100 largest cities, Minneapolis had the 87th lowest median rental rates at $1,092 a month, while St. Paul ranked 88th with $1,082 a month. This put the Twin Cities metro area median rent at approximately $300 more expensive than the cheapest of the 100 largest cities (Cleveland, OH, at $796), but almost $2,000 cheaper than the $3,028 median rent rates in Irvine, CA. Minneapolis ranked slightly lower than the average monthly residential rent increase for large U.S. cities at 0.3 percent, while St. Paul matched the national average of 0.5 percent increase.
Both Minneapolis and St. Paul have a lower median rent for one-bedroom apartments than many surrounding suburbs, including St. Louis Park ($1,315), Edina ($1,420), Bloomington ($1,181), Woodbury ($1,591) and others.
Last month, Minneapolis released an analysis recommending against rent stabilization measures, saying the city “should continue supporting, and explore deepening investment, in known effective strategies to relieve renter cost-burden,” referring to households paying more than 30 percent of their income on housing.
However, the Research Department, a startup supporting investigative journalism unit, issued a memo recently calling the city’s report “a reckless disregard for the truth at best—and deceit at worst.” Logan Carroll, the memo’s author, found that city staffers misrepresented the conclusions of multiple sources. University of Minnesota public policy professor Ed Goetz told Carroll that nearly a quarter of the sources used in the city’s report were “problematic” or “deeply flawed.”
Minneapolis Mayor Jacob Frey, who called affordable housing “the top priority in [his] administration,” cited 30 percent area median income (AMI), as his focus for affordable housing production. At a February press conference, Frey said Minneapolis produced six times more affordable housing in 2022, as compared to the average yearly number of units produced between 2011-2018.
Frey says production of affordable units will continue and that Minneapolis has awarded projects to developers for the construction of 2,112 more units of affordable rentals. Of these units, 610, or around 29 percent, will have monthly rental rates affordable for residents making 30 percent of AMI for Minneapolis residential areas.
“Rent stabilization is a critical tool in the toolbox when it comes to guaranteeing St. Paulites can thrive, and has provided an incredible foundation from which to envision safe, stable and affordable housing for all,” MNYC stated in a press release celebrating the one-year anniversary of St. Paul’s rent stabilization policy taking effect.
“HousingLink data tells us that nearly half of all St. Paul renters live in housing that is not affordable to them,” said Meghan Daly, advocacy manager for MNYC, who wants to see additional rental protections get passed in St. Paul. Daly believes there are several approaches St. Paul can take to increase affordability, such as capping the maximum cost of security deposits and increasing the stock of housing available to people making 30 percent or lower than the area median income (AMI).
The City Council may consider a rent stabilization policy through the legislative process. If passed, a rent stabilization ordinance would be added to the ballot for approval by Minneapolis voters.
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Terrible propaganda by Research Department. Rent control put a halt to new housing development in St. Paul. Minneapolis would be insane to follow their lead.
There is no reason that affluent renters should be subsidized with below market rent by their landlords.
The City should directly subsidize poor people’s rent, or better yet encourage better employment opportunities and wage growth.