New report: Market rate affordable housing is varied. We need varied solutions to preserve it.
The sale of Crossroads at Penn in Richfield impacted 700 households, capturing the attention of policymakers and the public, and motivating communities to find solutions to preserve naturally occurring affordable housing (NOAH). However, a new report by Minnesota Housing Partnership reveals that the geography and make-up of NOAH properties is not uniform. Sales of large buildings like Crossroads have a major impact. And as policymakers develop solutions, it’s important they’re aware that smaller properties comprise a significant portion of NOAH in the Twin Cities region – and that different properties impact different populations.
Across the Twin Cities, the growing ranks of renter households are facing an increasingly challenging housing market with rising rents and declining vacancy rates. While developers are leveraging public and private resources to create new affordable units, current owners of unsubsidized rental properties have few tools to preserve and improve aging properties to maintain homes for current and future tenants.
In March of 2018, Minnesota Housing Partnership launched a new research series tracking key trends in the unsubsidized multifamily rental markets across the 7-County Metro. “Market Watch: Twin Cities,” published in November 2018, analyzes data from 210,915 unsubsidized rental units in properties with four or more units in the 7-county metro from the CoStar database.
Key findings include:
- Preserving NOAH impacts communities of color. While 43% of White renter households are cost burdened, 57% and 62% of Native and Black renters are forced to pay more than they can afford for housing. Families served by NOAH are particularly impacted by cost burden.
- Small NOAH buildings are concentrated in Minneapolis and St. Paul with 91% of properties located in Hennepin and Ramsey counties. For Hennepin and Ramsey, small NOAH comprises a sizable portion of all NOAH buildings at 45% and 43%, respectively.
- Medium NOAH buildings are prevalent in the core cities and the first ring suburbs. Anoka and Scott counties see the largest percentage of their NOAH properties in medium buildings at 38% and 43%, respectively.
- Large NOAH buildings are more widely distributed with more concentration in the suburbs. While large NOAH comprise the smallest percentage of NOAH properties in Hennepin and Ramsey counties they make up 60% of NOAH buildings in Dakota County and nearly half (46%) in Scott County.
- Small and Medium NOAH buildings are concentrated in lower income and communities of color. The majority of small and medium NOAH buildings are in cities with more than 30% people of color. Of the 79 cities in the seven-county metro area, 11 have more than 34% people of color, including Brooklyn Center, Brooklyn Park, Saint Paul, Minneapolis, Richfield, and Hopkins.
- Property transactions are most prevalent in smaller properties. Of the total 1,576 sales transactions in Class C properties, 74% were small buildings, with just 10% occurring in large buildings with more than 50 units. Not surprisingly, however, of the total 44,305 units impacted by property sales in Class C buildings, 58% of units were sold in large buildings, followed by 25% (11,115) in small buildings.
Data analysis, writing and mapping for this report was conducted by Gabriela Norton, Research Officer at Minnesota Housing Partnership, with editing and design by Carolyn Szczepanski, MHP Director of Research and Communications.
Questions about data? Contact Gabriela Norton at gabriela.norton(at)mhponline.org or 651-925-5557.
Media inquiries? Contact Anne Mavity at anne.mavity(at)mhponline.org or 651-925-5547.