Consensus on the Affordability Crisis

Consensus on the Affordability Crisis

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.

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Legislature Weighs Housing Affordability

Legislature Weighs Housing Affordability

With growing pressure to address the burgeoning housing affordability crisis, the legislature is considering several initiatives, ranging from housing subsidies to the creation of a commission on housing affordability.

Leading the housing policy discussion, HF 1208 (Carlson, A., DFL-Bloomington)/SF 1294 (Draheim, R-Madison Lake) would create a legislative commission to review regulatory costs, housing innovations and homeownership access issues across the housing spectrum.

Modeled after existing legislative commissions covering complex policy issues like pensions and data privacy, the measure would seat eight legislators, two from each caucus, to review and make housing policy recommendations.

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Homeowners Priced Out

Homeowners Priced Out

New Report from the Housing Affordability Institute Reveals Why The Housing Market Fails Too Many Minnesota Families

A new report titled Priced Out: The True Cost of Minnesota’s Broken Housing Market provides a detailed look at the growing regulatory pressures on new homes, which is having a powerful effect on the entire housing ecosystem of our state. The research demonstrates that up to one-third of the price of a new Twin Cities home is due to local, regional and state housing policies.

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Let's Fix It

Let's Fix It

As we transition into the new year, the opportunities and challenges facing the housing industry are remarkable. On the plus side, our economy is strong, employment is steady and demand for housing remains on the upswing. Those positive housing market attributes are balanced with challenges, including a 10-year low in housing affordability, steep regulatory costs placed on new homes and a workforce that is not replenishing at a healthy rate.

The Governor’s Task Force on Housing provided key conclusions in its final report, which was released last August. Key recommendations include building 300,000 homes by 2030, driven primarily by the private market; establishing formal review of regulatory cost drivers; and prioritization of housing as a key building block by policy makers.

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Legislative Preview: Housing Emerges as Top Tier Issue

Legislative Preview: Housing Emerges as Top Tier Issue

When the legislature gavels in to begin a new legislative biennium, many issues are on the docket waiting to be addressed. Housing affordability is poised to be one of the key issues.

As the price of housing, from rentals to single-family homeownership, continues to increase across Minnesota, more families are impacted by the increasing burden of housing affordability and our region’s competitiveness is at risk.

In a stark reminder of the housing market challenges, home affordability in the Twin Cities metro area hit another decade-low in October 2018, according to the Minneapolis Area Association of Realtors’ (MAAR) latest survey released in November 2018. A combination of rising interest rates, rising construction costs, slow wage growth and low inventory has exacerbated the issue.

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2018 Housing Report Card: Good, But Needs Improvement

2018 Housing Report Card: Good, But Needs Improvement

Housing Affordability Issue Continues to Grow

According to the 2018 single-family permit numbers, Minnesota homebuilders had their second-best year in a decade. But, those numbers seem more disappointing coming off 2017, which was the best year for new housing construction since the Great Recession.

Minnesota single-family permits were down 3 percent year-to-date through October, but according to the Minneapolis Area Association of REALTORS (MAAR), new construction pending sales through October were up 7.8 percent.

While some indicators point to the existing housing market shifting from a seller’s to a buyer’s market, the inventory of homes for sale is still at record lows. Therefore, prices continue to rise, homes are selling in less time and sellers are yielding a higher share of their list price.

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Governor’s Task Force Report: More New Housing Needed

The Governor’s Task Force on Housing Affordability released its report titled “More Places to Call Home: Investing in Minnesota’s Future” on Aug. 21. Leading the recommendations included in the report is a call to build 300,000 new homes by 2030, create a regulatory review panel and address the industry- wide labor crisis.

“The Governor’s Task Force on Housing took an important first step in identifying the shortage of new housing production, our need to evaluate regulations, and the construction labor shortage which threatens our ability to solve our housing affordability crisis,” said David Siegel, executive director of Housing First Minnesota. “We are especially pleased with the emphasis to support and strengthen homeownership. “Throughout the Task Force process, Housing First Minnesota advocated for solving our housing supply challenges by increasing affordability across the housing market.

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“We are pleased to see the Task Force embrace the core of this approach, which begins with evaluating regulations and land policies to directly address affordability. “The hard work of addressing the cost drivers impacting housing affordability now enters a new phase. As the leading voice for homebuilding and remodeling, Housing First Minnesota is pleased to see other stakeholders ready to join us in addressing this critical challenge facing all Minnesotans.”

Housing First Minnesota staff attended meetings of the task force and homeownership work group during the first half of the year and sent a letter to the task force in June, saying that addressing Minnesota’s low housing inventory is critical to solving the housing affordability crisis.

New Construction Stormwater Permit Now in Effect

New Construction Stormwater Permit Now in Effect

The Minnesota Pollution Control Agency (MPCA) released the fnal 2018 Construction Stormwater Permit on July 25. The 2018 Permit, which went into effect on Aug. 1, includes changes requested by Housing First Minnesota.

In May, Housing First Minnesota sent a letter to the MPCA seeking changes to five items, including several provisions that would have expanded enforcement actions under the new Permit, with MPCA making each of the requested changes.

One difference between the earlier draft and the final permit, however, concerns industry experts. In April 2017, Housing First Minnesota requested the repair timeframe be increased, a change that was included in the draft version of the permit released in April 2018. Instead of increasing the repair time frame to “BMPs prior to the next anticipated rain event or within three (3) calendar days whichever comes first” as planned, the MPCA reverted to the existing language of “by the end of the next business day after discovery” in the final 2018 Permit.

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Impact Fees Stuck Down by Supreme Court

Impact Fees Stuck Down by Supreme Court

Harstad v. Woodbury: A Landmark Victory For Housing Affordability, Industry

The Minnesota Supreme Court issued a landmark decision that is a major victory for the housing industry and housing affordability. In its much-awaited decision in the Harstad v. Woodbury case, on Aug. 15 the Court upheld 20 years of legal precedent, saying cities have limited authority to tax new housing developments.

In the Court’s ruling, Justice G. Barry Anderson wrote: “Put another way, the pearl of great price here is approval of the subdivision agreement. A developer who fails to make a ‘voluntary’ payment in an amount Woodbury finds acceptable faces the prospect of denial of the subdivision application. The infrastructure charge is thus a requirement and Harstad is correct that there is nothing voluntary about it.”

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Housing First Minnesota PAC Endorses 48 Legislative Candidates

Housing First Minnesota PAC Endorses 48 Legislative Candidates

The Housing First Minnesota’s Political Action Committee (PAC) is proud to endorse a record forty-nine candidates for election and re-election to the Minnesota legislature. Housing First Minnesota’s PAC endorsement reflects each candidate’s commitment to a vibrant housing market that ties together the communities of our great state.

These candidates represent growth in the Housing Caucus, which is comprised of legislative leaders who are committed to our goal of building safe, smart and durable homes at a price that Minnesotans can afford. The Housing First Minnesota PAC endorsement process utilized a candidate questionnaire, analysis of a candidate’s voting record, personal interviews for first-time candidates and proven demonstration for Housing First Minnesota’s policy platform. We look forward to working with these housing champions in the 2019 legislative session.

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Minnesota Supreme Court Ruling A Landmark Victory For Housing Industry

Minnesota Supreme Court Ruling A Landmark Victory For Housing Industry

The Minnesota Supreme Court issued a landmark decision that a major victory for the housing industry and housing affordability. In its much-awaited decision in the Harstad v. Woodbury case on Wednesday, Aug. 15, the Court upheld 20 years of legal precedent, sayings cities have limited authority to tax new housing developments.

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