Rising rent costs slow dramatically in Minneapolis; Still, average renter is ‘cost-burdened’
Rising rent costs have slowed dramatically this year in Minneapolis compared to the rest of the country. Even so, after years of inflation, affordability remains an issue.
“We have kept our rent increases to about 1% whereas the rest of the country was looking at 31%,” Mayor Jacob Frey said on Monday, citing data from The Pew Charitable Trusts.
“That’s a drastic difference. And in part, it’s due to the policies that we’ve passed.”
It’s mostly simple supply and demand, according to Mayor Frey. An explosion of housing, made possible by eliminating single-family zoning requirements, has kept prices down. That, and an investment of $320 million over the last seven years into creating more affordable housing units than developers are otherwise required to, he added.
Regional data compiled on the Itasca Project’s Regional Housing Affordability Dashboard showed the Twin Cities are largely more affordable to live in than comparable metros nationwide.
Still, on average, people are spending about 40% of their paychecks on renting a place to live.
“That’s part of the issue that we’re looking to tackle here,” Frey reacted.
“What the data is showing us is here, we are making progress,” added GREATER MSP CEO Peter Frosch.
“We are doing things that are moving us in the right direction. We’re driving change at scale, and so our challenge is keeping that going.”
Overall, the 15-county metro is exceeding its housing production goal, but it’s not keeping up with affordable housing demand, Frosch said, adding, “we absolutely can do better.”
“I can tell you that as soon as affordable housing projects go up, they’re filled,” Frey added.
According to a housing report from the Itasca Project this year, in a smaller seven-county Twin Cities area, 2,121 new affordable housing units have been built since 2021. That leaves a need for another nearly 17,000 units to meet the 2030 goal for the region.
“We’ve been able to do something in market rate, or housing overall, that many other metros have not been able to do, so absolutely. We can figure this out,” Frosch said when asked if the region can ultimately meet the demand for affordable housing.
“The message is we’re not taking our foot off the pedal here. We’re proud of the housing work that we’ve gotten done, but we need to keep going,” Frey concluded.
In his budget address last week, the Mayor recommended $18 million in the city’s budget for 2024 go into new affordable housing and another $5 million in ongoing funding for building and maintaining going forward.
Statewide, the legislature invested more than a billion dollars to the cause. Exactly how far that’ll all go remains to be seen.