By JOHN RASK
Housing First Minnesota
2019 is off to a steady start for the first few months of home construction activity. Given our adventures with the weather, steady may be acceptable for now, though we know we need to be building more homes. This isn’t just the homebuilder wanting to build more homes, a growing consensus of public and private institutions have come to this same conclusion: our housing market is broken and we need a surge in new, affordably priced homes.
The Housing Affordability Institute provided a remarkable look at one of the reasons our housing market is suffering, our homes are simply too expensive for many Minnesotans. In Priced Out: The True Cost of Minnesota’s Broken Housing Market, we get to see what impacts the cost of new homes and the challenges this presents for many Minnesota families.
One of the most interesting elements of the study was the conclusion that construction materials, business overhead and profit were largely comparable across the states studied. However, the regulatory costs in the Minnesota market were as much as double those of comparable homes built in Wisconsin and Illinois.
A comprehensive look at the factors contributing to the cost of new homes is necessary as we begin a deeper discussion about affordability. Thankfully, a growing consensus of stakeholders have come to similar conclusions. The Metropolitan Council, the Minneapolis Federal Reserve Bank and the Governor’s Task Force on Housing have issued public findings that stress the urgency of our housing supply and addressing our affordability crisis. In terms of housing supply, these groups have concluded that we need to build more homes at all price points.
Consensus on identifying the problem is a critical step, but we need to keep moving. Housing First Minnesota has proposed the creation of a Commission on Housing Affordability. We believe that the complexities require a broad-based, holistic approach with oversight from a bipartisan group of legislators. The legislation to create the Commission on Housing Affordability is currently under consideration.
I hope you will join the growing movement to fix our housing market.