Data Tour of Rental Housing

Housing folks know that despite common stereotypes, renters are integral to our social and economic fabric, and that decent, affordable rental options make for vibrant communities. Recent Met Council projections suggest that the need for rental will increase quite a lot by 2040 due to more older adults, more immigrants, and more single-parent families in the Twin Cities area. MHP's been piecing together data in new ways to tell the story of rental in Minnesota to show that affordable rental housing is in short supply and requires investment to meet our needs going forward. Take an MHP graphical data tour of three key points, and let us know what you think in the comments.

 

income_pie_severecb_rentersaffordable_byincome_tcmetrohousingcounts_byami



 

 

Most of our data is for the Twin Cities metro. While choices for Greater MN renters are sometimes even more constrained than in the metro, we focus on the metro due to data availability, and that often metro trends set the trajectory for the state.

Point #1: Rental housing is not affordable, especially to the lowest income folks.

The chart below looks at those who are spending at least half their income on housing and divides them up by their incomes. Over three-quarters have incomes that are 30% or less of the area median, or are "extremely low income" or ELI. State-level statistics are very similar.income_pie_severecb_renters

Our friends at the National Low Income Housing Coalition remind us that in Minnesota, affordable housing is in extremely short supply for those at the lowest end of the income spectrum. Only 40 units are available and affordable for every 100 extremely low income households. Supply improves somewhat as you go up the income ladder.

  Units Affordable & Available per 100 households  
          at or below threshold, Minnesota, 2010

 ELI (30% or less of MMFI)

 40

 VLI (31-50% of MMFI)

 76

 LI (51-80% of MMFI)

 106

 Source: NLIHC Tabulations of 2010 ACS PUMS data

 

Point #2: The supply of low-cost apartments on the private market is shrinking

From 2006 to 2011, the number of units in the Twin Cities renting at $650 or less fell by 53%. marquette_under650

The American Community Survey provides more evidence of the same kind of trend. 52,000 rental units were added from 2005 to 2010, but in net the added units fell at the upper end of the rent spectrum. Some loss in number of cheaper units and growth in more expensive units is to be expected due to inflation, but this does not account for the dramatic swing in this chart.

rental_unit_change_bycost_2005-10Point #3: Newly created subsidized rental housing is not targeted to the lowest income people, even though that's where the greatest need is.

Just how low do rents need to be to serve extremely low-income folks? Finding decent rental housing in the Twin Cities for a whole family at $1,250 is a challenge, but is nearly impossible at $630/month.

affordable_byincome_tcmetro

Yet the affordable housing we are producing, as valuable as it is, often fails to meet the affordability needs of extremely low income families.

housingcounts_byami

We know that funding tools (too few, too little, and not targeted to low enough incomes) are a big part of why we are not meeting the state's needs. We have our work cut out for us! MHP encourages you to use this data when you talk to colleagues, community members, and policy makers.

Contact Leigh Rosenberg at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or 651-925-5543 for more information.

Comments  

 
0 #5 Dan Hylton 2012-04-30 08:40
Leigh, thanks for going above & beyond on youre followup - very affirming of your original assessment. And again, good use of the data!
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0 #4 Leigh Rosenberg 2012-04-26 10:11
Dan, thanks much to HousingLink for making the Housing Counts data available. What you are suggesting makes sense, but the proportion of affordable housing for ownership is fairly small. So it turns out that the chart looks very similar when you take out the ownership units. Check out the new chart I threw together based on your suggestion at http://mhponline.org/images/stories/images/blogs/mhpconnect/2012/housingcounts_byami_rentalonly.png (Let's see if this comment technology will work!)
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0 #3 Leigh Rosenberg 2012-04-26 09:47
Good question, Carlene. I don't know of a single data source on this, but we can infer in a back-of-the-envelope way. From census data, we know that Minnesota's ownership rate fell from about 76% in 2005-6 to 73% in 2010. With a little over 2 million occupied housing units in the state, a 3% change would be on the order of 60,000 households entering the rental market. We also know that from 2006 to 2010 there were about 100,000 foreclosures in MN; some were of rented homes. I think it's safe to say that there's a lot more demand for rental than there was a few years ago.

It's also worth looking at rental supply. In the 5-year period from 2006 to 2010, the number of multi‐family units permitted fell to at least a 50-year low for any 5-year period. Check out the Q1 2011 2x4 Report at http://mhponline.org/images/stories/docs/research/2x4/mhp2x4report_q111_full.pdf for more. This was probably due to bullishness on the ownership market in the early-middle part of the decade, followed by tight credit for would-be developers as the housing market collapsed. Hope this helps!
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0 #2 Dan Hylton 2012-04-26 07:41
An interesting tabulation of the Housing Counts report! I wonder if it might be most helpful to see only rental data reflected in the graph. It looks like the major shift in relative proportion occurs in 2006, which is when ownership data was introduced. Assuming most affordable ownership is not (almost can not!) be targeted to 30% AMI - this might be influencing the change quite a bit.
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0 #1 Carlene Coleman 2012-04-25 20:58
This is good and useful information. Has this or other research MHP has seen touched on how foreclosure have and are affecting the rental housing demand and availability?
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