Commentary: Big Problems Require Bold, Ambitious Action – Housing Is No Different

by Nick Erickson, Housing Affordability Institute Editor's note:

Housing Industry News publishes a mix of commentaries online and in print.

Across the nation, legislators and governors are thinking big when it comes to housing reform. Massive issues like the housing inventory, affordability and access problems seen in a growing number of states require bold and ambitious action.

Leaders in New York, Virginia, Georgia, Washington, California, Colorado and Montana have turned their attention to the root causes of their state’s housing issues: a lack of housing inventory and regulatory structures and requirements that do not properly balance affordability and access against other concerns. Oftentimes, outdated local policies act as roadblocks to the adequate production of housing to supply for their respective states.

These lawmakers from across the political spectrum understand that to move the needle on housing, policymakers must think big and focus on addressing the causes of their state’s housing challenges. By seeking bold action, these leaders are not allowing themselves to get distracted by the symptoms of their housing crises.

Treating the illness alleviates the symptoms.

In Minnesota, we’ve seen much of the conversation in the housing space over the past few months turn away from the big picture and look to topics on rent stabilization, corporate conversion of single-family homes to rentals and other issues. These issues are symptoms of Minnesota’s broken housing ecosystem, not the causes.

Minnesota’s housing challenges are rooted in the lack of available housing, hindered by the region’s undersupplied market with the highest new, single-family construction costs. This lack of supply is what drove up existing home prices and rents over the past several years and invites companies to convert single-family homes from for-ownership to rental homes.

The solution to both challenges is to build more affordably-priced homes, condos and apartments, with special attention to the communities where new housing is needed most and growth is happening.

This was the conclusion of the 2018 Minnesota Housing Task Force formed by then-Gov. Mark Dayton. This group established a roadmap to solving Minnesota’s housing issues: erase the state’s housing deficit through a dramatic surge in market production of new housing, a focus on preserving the naturally occurring affordable housing (NOAH) in communities across Minnesota and the lifting of roadblocks to the construction of affordably priced new housing.

Unfortunately, the needed surge in production has fallen short. With the median new, single-family cost nearly $100,000 higher than neighboring states, Minnesota clearly has a cost problem that our neighboring states do not. Without addressing the cost side of the equation, which includes outdated zoning laws, Minnesota will never be able to balance its supply and preserve NOAH.

Governors in Colorado, Montana, New York and Virginia understand this, as do legislators in California, Washington and Georgia. Minnesota’s problems, in many respects, are as large or larger than these other states.

California, Oregon and Washington waited until their housing crises boiled over and economic competitiveness was directly threatened. These state’s housing crises are several years ahead of ours. Minnesota has largely observed the problem the past four years and our state cannot afford to wait another five to 10 years to act.

As the Minnesota Legislature dives into housing, legislators should look to other states to see what action is needed here. A commonality in all these bold and ambitious plans exists: Zoning modernization that will enable the needed new housing to be built. Creating new regulatory structures to ensure affordability and access are a part of ensuring that new housing will be affordable.

Across the political spectrum we’ve seen policymakers think big on housing. The scope of their action speaks volumes about the depth of housing’s challenges in their states. They focus on addressing the causes of their housing crisis, not the symptoms.

Bold and ambitious action is needed in Minnesota. Our housing challenges are immense and its action here is long overdue.

Nick Erickson is the executive director of Housing Affordability Institute.