30+ ideas to fix housing shortage in Minnesota

Whoever wins November’s election for Minnesota governor will enter office with a list of proposals to address the state’s deepening housing shortage.Gov. Mark Dayton on Tuesday joined members of his Task Force on Housing to release more than 30 recommendations to improve access, stability and affordability in Minnesota’s housing market. The task force, established in December, is calling for new public-private partnerships, incentive programs, and a new dedicated funding source to stimulate residential construction and preservation across the state.

“The magnitude of the [housing] problem, I confess, has always overwhelmed my thinking about what would we really do statewide,” Dayton said at a news conference in St. Paul. “This is really going to have an impact.”

More than 554,000 Minnesotans spend 30 percent or more of their income on housing, a 58 percent increase since 2000, the task force found. The Great Recession severely restricted the construction of new housing, and Minnesota has yet to make up a gap of 50,000 new homes. Statewide, 300,000 new homes will be needed by 2030, according to the report, “More Places to Call Home: Investing in Minnesota’s Future.”

Task force members toured the state and heard from employers such as Hormel in Austin and CentraCare in St. Cloud who said a lack of housing is the primary restriction on growth, Minnesota Housing Commissioner May Tingerthal said.

“There’s sometimes, in these communities that are thriving, no housing at all,” she said at Tuesday’s press conference. “That’s not just for [private] workers, but it’s for teachers and policemen and firemen.”

Existing housing is also often at risk, Tingerthal said, citing examples such as the 2015 mass displacement of residents from the Crossroads at Penn apartments in Richfield, now called Concierge. The report recommends “cities and communities explore possible incentives for owners that are willing to buy [affordable] properties when they come on the market and try to keep a lid on the rents,” she said.

The report includes a number of recommendations for the construction industry, including growing Minnesota’s talent pool in the building trades through new education programs and making the state a leader in construction technology and innovation. One example noted in the report is from Sweden, where 84 percent of new homes now incorporate factory-built elements to cut down construction costs.

“Our construction industries have really not kept pace with the technology that’s being deployed in other areas,” Tingerthal said.

Task force members addressed housing as a quality of life issue, but emphasized it has economic implications as well. Co-chair Jeanne Crain, CEO of Bremer Bank, hopes the report helps activate the private business community to find solutions to housing shortages that restrict their access to workers. Bremer has partnered with Twin Cities Habitat for Humanity to help low-income families afford homeownership.

“For many privately held businesses, it’s really [about] understanding … what the impact is of not paying attention to this issue in a timely manner,” Crain said.

A dedicated state revenue source was a common request the task force heard, Tingerthal said. The report does not recommend a specific model but discusses possibilities such as tax credit incentives for developers or a model similar to Minnesota’s constitutionally protected transportation funding. Asked how much money such a revenue source would command, Tingerthal said that’s yet to be determined.

“The work now begins to talk not only with this governor but the incoming administration,” she said.

At the same time, Tingerthal and Dayton emphasized that the task force’s recommendations go beyond proposals for government action.

“The supply of housing stock is an important private sector function and responsibility,” Dayton said. “They need to tell us what they need in terms of incentives to meet that need.”

The report recommends creating a nonpartisan body to review, among other things, government regulations that increase the cost of housing. Tingerthal said conversations about the State Building Code and other state and local mandates are on the table.

“This is not a plan that simply calls for government spending,” she said. “It is a very broad-based plan that calls for looking at private sector involvement, problem solving, and private sector investment, and looking at ways we can work together to solve some of the barriers that may be permitting that investment.”

More:

Task force report: “More Places to Call Home: Investing in Minnesota’s Future”

Panel: Affordable housing is vanishing in Twin Cities