The Housing Problem Is In The Math We Aren’t Doing

The re-election of Minneapolis Mayor Jacob Frey and St Paul’s election of mayoral candidate Kaohly Her may have come as a relief for many housing providers, neither’s position on rent control negates the two cities need for more affordable housing.

While studying HousingLink‘s September report, I was inspired to do some basic math. The report said the income required to rent a one bedroom apartment in St Paul is $2998, and in Minneapolis, it’s $3056. That figure is based on the common screening criteria that an applicant must earn 2.5 times the rent in monthly income.

I took the monthly income and divided it by the minimum wage in both cities: $15.97 an hour. In St Paul, a tenant earning minimum wage must work 187.7 hours per month, or 46.93 hours per week to be able to pay the rent on a 1 bedroom apartment under that screening criteria. Of course, that hourly wage is a gross figure; before withholdings, so the hours are likely even higher. In Minneapolis, that number rises to 47.98 hours a week.

Things are slightly better in a 2 bedroom unit; if you have a roommate. Minneapolis’ two bedroom median rent of $3803 would necessitate each roommate working 30.3 hours a week to pay rent. In St Paul, in slips slightly to 29.8.

Minneapolis’ median 3 bedroom rent of $1999, which is 4% higher than one year ago, requires two minimum wage earners to work 40 hours a week to earn enough for rent. St Paul’s median rent of $1900 means two people must work at least 37.2 hours a week to afford rent.

Rent control currently isn’t the answer.

St Paul, which has rent control, saw a 9% year-over-year increase in median rent on 1BR units, a 1% increase on 2 bedroom rents, and a 3% decline for 3 bedroom units.

Meanwhile, Minneapolis, which does not have a rent control policy, saw a 2% year over year decrease in median rents for 1br units, a 2% decrease on 2 bedroom units, and a 4% increase in the median rent on 3 bedroom units.

The majority of units in St Paul’s 4% vacancy rate were found in apartment buildings, at 82% of the total. Houses stood at 6% of the 4%, and condo’s , duplexes and townhouses contributed 12%.

Minneapolis posted a 5% vacancy rate for the month. Here too the majority, or 74%, were found in apartment buildings. Houses were responsible for 10%, and condos, duplexes and townhouses added 16%.

Vacancy rates of 4 and 5% are relatively low. If they were higher, housing providers would need to do more to incentivize prospective tenants to apply. And the only way they rise is if supply exceeds demand. After all, even if wages went up so more people could afford rent, the units would have to exist in the first place.