On July 15, 2021, ULI Minnesota released the “Missing Housing for Middle Incomes – Strategies to Reduce Cost and Add Affordability ” report, the culmination of a year of work by real estate industry experts on opportunities to increase production and increase affordability for middle income households.
REPORT EXECUTIVE SUMMARY:
ULI’s new mission commitment to connect, inspire, and lead is the foundation of the work to understand the real estate and community challenges of developing housing for middle incomes absent of public financial investments. ULI Minnesota is fortunate to have active, passionate and diverse members who care deeply about the future of the region, its built environment and providing a full range of housing choices that is essential to community economic prosperity.
In partnership with Prosperity’s Front Door, ULI Minnesota engaged a panel of key member industry expertise in a year long process resulting in the Missing Housing for Middle Incomes report. The report outlines what is getting in the way of success and provides suggested recommendations to break down those barriers in the hopes of increasing production of housing that provide rents and values affordable to those with middle incomes who are a critical population of workers in our region. To deliver on the goal will require key partnerships among the public and private sector to understand the barriers and make modest but multiple changes to the way we develop housing across the state.
Understanding the barriers for being able to deliver this housing and what would need to change to encourage production at a greater scale was one of the key challenges the key industry panelists pondered. With a target of reaching households at 60–80 percent of the area median income, ultimately it came down to tradeoffs in achieving this level of moderate affordability with limited or no public finance investment. In addition, entrepreneurial developers who have built housing for middle incomes indicated that it was too difficult, and they would not venture into another like development unless they received public financial support as the stress and impact on the company was not worth the lower profit margins. The panel indicated that not one strategy alone will have impact but rather many of the recommended shifts and changes would be required to see cost savings necessary to develop limited affordability without some level of public concession on land use regulations or financing investment.