MINNEAPOLIS -- Rural Minnesota faces an affordable housing shortage that can only be eliminated with higher-paying jobs or lower-cost homes and rental units, a housing expert said.
There could be an estimated 10,600 fewer affordable housing units outside the Twin Cities area than will be needed by 2010, and that is in addition to thousands of privately developed and non-profit-backed projects, Warren Hanson said Friday during a University of Minnesota forum.
Without economic changes or an influx of housing project investment, "It just means that we have that amount of units that are not going to be addressed," said Hanson, president of the Greater Minnesota Housing Fund. The estimate was first identified in a 2004 housing research study and holds firm three years later, he said.
The crux of the problem is that many homes are too expensive for Minnesota workers, Hanson said. The average cost for a new home outside the seven-county Twin Cities area is at least $155,000. The median new home cost in Detroit Lakes is more than $130,000, and in Duluth its nearly $160,000.
"They have a huge amount of distance to travel in terms of savings before they can ultimately own a home," Hanson said of residents who don't make enough money to afford a mortgage.
ADVERTISEMENT
There are benefits to providing affordable and potentially long-term housing for working families, Hanson said, noting that companies have helped to fund projects. Benefits include economic and family stability, improved child development and better neighborhoods.
Most new affordable housing projects include single-family homes or townhouses, though apartment buildings are still developed in some cities, including Duluth, and in small towns where old civic buildings are modified.
Gov. Tim Pawlenty's proposal to increase state aid for affordable housing initiatives would help the situation, Hanson said during a seminar sponsored by the University's Center for Urban and Regional Affairs.
That proposal includes more than $35 million in new funding for affordable housing projects and programs to curb homelessness, Minnesota Housing Finance Agency Commissioner Tim Marx wrote to lawmakers in a two-year budget proposal.
In the coming weeks, a coalition of finance agencies could urge state lawmakers to fund affordable housing initiatives at a rate higher than Pawlenty has proposed. That plan would be vetted by legislators on economic development committees, including one led by Sen. David Tomassoni, DFL-Chisholm.
Since it was formed in 1996, the Greater Minnesota Housing Fund has helped to finance 283 affordable housing projects outside the Twin Cities area. That includes more than 6,000 units, such as homes and townhouses, and $85 million in financing mostly from the McKnight and Blandin foundations.
Projects are spread throughout the state, including in Bemidji, Marshall, Grand Rapids and Duluth.
Scott Wente works for Forum Communications Co., which owns the Bemidji Pioneer.
