Last week, the Post-Bulletin's Editorial Board met with five people — some local, some not — who share the collective goal of making sure Minnesotans have access to affordable housing. Each of these people has a specific area of expertise, and they took turns explaining the magnitude of our region's housing problem and the variety of resources and strategies that must be employed to combat it.
But when we asked this question — "Could developers in Rochester, on their own, profitably build new apartments that would be considered affordable housing?" — all five of our guests responded, almost in unison, with an emphatic "No." In fact, they didn't even let us finish the question.
Susan Strandberg is community development officer for Three Rivers Community Action, a nonprofit that for nearly 50 years has been helping to meet the needs of low-income Minnesota families. She put the matter bluntly: "If you're going to build something without any state investment, that doesn't need any gap funding from the state, then you're going to have to build 80 units in a pretty tight space and charge at least $1,000 per unit."
That's not affordable housing. Not even close. And therein lies the problem.
Minnesota's minimum wage won't reach $9.50 by 2018, but let's consider a full-time worker today who earns $10. Based on the widely accepted premise that housing costs shouldn't exceed 30 percent of household income, that worker can afford monthly rent of $520.
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In Olmsted County, 46 percent of renters are exceeding the 30 percent guideline. In Wabasha County, it's 55 percent.
More disturbingly, 15 percent of households statewide are spending more than half their income on housing. At that point, the impact on nutrition, medical care, transportation and a household's overall stability cannot be overstated. People who spend half their income on housing can't provide their own safety net. If the car breaks down or a wage-earner falls ill for a week or two, they're in dire straits. Eviction and even homelessness are real possibilities — today, 14,000 Minnesotans are homeless, and half of them are younger than 21.
That's why the Minnesota Housing Partnership, through its "Homes for All" campaign, is seeking $100 million in state bonding dollars, an amount that would build or rehabilitate about 5,000 units of low-income housing. Specifically, these dollars would be used to:
• Preserve and restore existing private-sector affordable housing, most notably Section 8 housing in which tenants pay 30 percent of their income for rent, with the balance paid by the federal government.
• Assisting households that are at risk of foreclosure, or acquiring and restoring foreclosed properties to promote neighborhood stability.
• Rehabilitating existing public housing, which serves 36,000 low-income Minnesotans, including 12,000 children. More than half of the state's 21,000 public housing units are more than 35 years old.
The annual debate about the state's capital investment bill often can seem like a cash grab, a tug-of-war that pits community against community, region against region and sometimes stage agency vs. state agency. Such squabbles tend to happen when upwards of $1 billion is up for grabs.
The bonding battle has been no different, but regarding affordable housing, it should be easy to achieve a bipartisan consensus. Sen. Dave Senjem, a Republican from Rochester, is among the lead authors of the Senate bill that would fully fund the Homes for All request, while Gov. Mark Dayton has proposed $50 million — half of what was requested.
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We know that bonding requests always exceed the available dollars, often by a factor of three or four, so it's probably unrealistic to expect the full $100 million for affordable housing. Roads, bridges, higher education, airports, prisons, water-quality projects and a host of other concerns rightfully will lay claim to their share of the state's long-term investment dollars
But we urge our legislators and Gov. Dayton to make affordable housing a priority in the bonding bill. At a time when Minnesota is flush with cash, what better investment can we make than to ensure that families have stable, affordable housing?
