Report Makes Affordable Housing Crisis Clear

HousingLink just released their Minneapolis & St Paul Housing Brief for the month of April.

It reports based on the standard screening requirement of a tenant applicant needing to earn 2.5 times the amount of rent for a unit in order to qualify.

In April, the median rent for a one bedroom apartment in Minneapolis and St Paul was $1101; up 2% over last year. That means to qualify to rent it, an applicant must earn $2753 per month. Minnesota’s minimum wage is $11.13 per hour. Dividing the required gross income by minimum wage, someone must work 61.8 hours per week to qualify.

A two bedroom unit averaged $1525 in April, which was actually a drop of 4% from one year ago. Nonetheless, a tenant must earn $3811 per month to qualify. That means two people earning minimum wage must work 42.8 hours per week to qualify.

Rent for a 3 bedroom apartment dropped year over year by 1% to $1875. Applicants must earn $4688 per month to qualify.

I bring these numbers up because they help illustrate the magnitude of the lack of affordable housing in the Twin Cities and nationwide.

This shortage, like every other shortage, is caused by a lack of supply. In this case that’s housing. We need more of it. And yet, between the second quarter of last year and first of 05, there were just 574 units in new construction multifamily buildings permitted. To put this in context, in the same stretch in 2022 there were 4,780 units in the pipeline.

This drop is likely due to increased construction costs, including interest rates and the cost of tariffed supplies like lumber.

Given the relative silence from government entities around a comprehensive plan for housing, for now anyway, we can expect more of the same going forward.