Gov. Dayton’s Housing Affordability Task Force Nears Completion

After five months of work, Gov. Mark Dayton’s Task Force on Housing has begun the process of drafting its report and recommendations.

The task force, announced in December 2017, has been meeting monthly to discuss how Minnesota can address its housing affordability challenges. As the topic of increased affordability encompasses the entire housing market, the task force has broken into three distinct work groups to examine specific areas of interest: homeownership, rental housing and housing stability.

The 28-member task force is predominately made up of elected officials and groups that provide some type of housing assistance. One REALTOR, Richelle Taylor of RE/MAX and one home builder, Mike Paradise of Rochester, were appointed to the task force.

Housing Group Submits Proposal

Housing First Minnesota responded to the task force’s call for ideas in March by submitting a report titled Solutions to The High Cost of Housing in Minnesota: The report outlines two barriers to housing affordability in Minnesota:
• An increasing regulatory burden
• The industry-wide labor crisis, both of which are adding to the state’s housing supply issues.

As a solution to rising regulatory costs, Housing First Minnesota pointed to HF 3044/SF 2567, a bill which would allow legislative review of housing regulations that cost homeowners $1,000 or more.

To aid publicly-funded affordable housing projects, Housing First Minnesota proposed allowing cities to exempt these projects from local fees. As for the industry-wide labor crisis, Housing First Minnesota said funding for Project Build Minnesota’s efforts would help attract more workers.

The Minnesota Association of REALTORS also responded, recommending the state strengthen the First-Time Homebuyer’s Savings Account the Legislature created last year as well as increasing homeownership tax incentives.

The REALTORS also presented at a meeting of the Homeownership Work Group and stressed the importance of regulatory reform in addition to strengthening the First-Time Homebuyer’s Savings Account.

Final Report Being Prepared
The Homeownership Work Group reviewed its draft recommendations for the task force’s final report at its May 9 meeting. The ideas the work group will propose are centered around seven categories, which includes expanding existing homebuyer programs and identifying ways to reduce construction costs. The specific suggestions are to general too increase affordability in Minnesota, says Housing First Minnesota’s Nick Erickson.

“As far as the Homeownership Work Group goes, their recommendations seem quite broad and will have little to no effect on the state’s housing affordability challenges,” said Erickson, who has monitored the task force for Housing First Minnesota.

Housing First Minnesota isn’t alone in believing the task force’s recommendations may fall short. During a presentation at the task force’s April full group meeting, guest speaker David Smith told the task force that, based on his conversation with task force members, its recommendations do little to address the cause of Minnesota’s housing affordability problem: the lack of supply. Smith, who has worked globally on affordable housing policy, stressed the importance of focusing on recommendations that increase housing supply across Minnesota.

He also cautioned against recommending rent control as a solution, saying that while it will keep rent low, the policy has proven to decrease the quality of rental units. The final report is scheduled to be released in July 2018. Learn more at MNHousingtaskforce.com.