One of Minnesota’s biggest barriers to affordable homeownership has tumbled. The state’s now $9-plus billion surplus means we have money to make wise investments. Democrats and Republicans in the Minnesota House and Senate agree, and so does the Walz-Flanagan administration, that now is the time to address one of the worst racial homeownership disparities in the nation.
It is difficult to understate the need. Black homeownership rates were higher in 1950 than they are today, and they are moving in the wrong direction.
The racial homeownership gap is compounded by Minnesota’s affordable housing crisis, which has been in the making for more than 20 years.
Here is background on how we got to this point where families across the entire state can’t find an affordable home to buy:
- State allocations for affordable housing have stayed flat for more than two decades even as costs and needs have increased exponentially.
- Home builders strive for a return on their investment. To make money, builders focus on higher-priced homes.
- To build entry-level homes — homes that our teachers, police and firefighters can afford — our state needs to help pay part of the cost. Currently, the amount of state investment produces just 100 affordable ownership units annually.
- Estimates show there is a need for 60,000 additional rental units to serve Minnesota’s lowest-income residents. Yet at the same time, 27,000 households who have sufficient income to afford to buy a home live in existing units that could be rented by our lowest-income neighbors.
Plain and simple, the failure to invest in affordable ownership is just bad policy.
We know what works, let’s do more of it.
With hundreds of combined years of experience building affordable homes, the Homeownership Minnesota (HOM) Coalition has members who work in every county in the state. HOM has practical recommendations that will create more affordable homes. We all agree the ideas below work for all Minnesotans. State investment is essential to:
- Build affordable houses around the state. Provide ongoing base funding for the Workforce Homeownership Program and continue to leverage low-interest rates to issue housing infrastructure bonds. The workforce program and bonding are efficient ways to develop affordable homes.
- Prepare homebuyers to be successful. Expand services that help families learn about all aspects of ownership. Educate, coach, counsel and train first-time homeowners so they have long-term plans to ensure success.
- Help current homeowners keep their homes. COVID-19 obliterated many family finances. People fell behind …….