CITY OF MINNEAPOLIS Housing City Council Study Session April 26, 2018 1
Agenda 1. Key trends around affordability, stability and quality 2. Levers to impact housing 1. Lever Focus 1: Financing 2. Lever Focus 2: Regulating 2
Housing trends summary 1. The City is growing faster than it has since 1950, and the population of color is growing faster than the population as a whole 2. Minneapolis is now a majority renter population; most people of color are renters while white residents are more likely to own instead of rent 3. Minneapolis renters are facing increasing housing costs with decreasing incomes 4. Minneapolis has less affordable housing than it did 15 years ago, and production is not keeping pace with loss 5. The majority of cost-burdened households have income <50% of AMI 6. Cost-burdened households are disproportionately communities of color 7. The energy cost burden is also disproportionately high for low-income and households of color 8. Housing stability is a major concern for communities of color, as evictions disproportionately impact these neighborhoods 9. Historic discriminatory housing policies have had a lasting impact on development patterns 10. Challenged rental housing stock subjects residents to worse housing conditions and management practices 11. Disparities in housing quality have serious health impacts for residents – especially for children 3
The City is growing faster than it has since 1950, and the population of color is growing faster than the population as a whole In 1990, around 2 in 10 residents indicated a race other than White, non-Hispanic. As of 2010 this • number had increased to 4 in 10, and is projected to grow Total Population for Minneapolis, 1920-2010; Total Population and Population of Color, Minneapolis Projected Population for Minneapolis, 2020-2040 2000 - 2010 600,000 382,618 521,718 382,578 500,000 459,200 Historical High 368,383 400,000 300,000 143,538 200,000 151,928 Total population 100,000 82,974 Of Color 0 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 1990 2000 2010 4 Source: U.S. Census Bureau, Decennial Census, Metropolitan Council
Minneapolis is now a majority renter population; most people of color are renters while white residents are more likely to own instead of rent Renter occupied units have had the larger share since 2010, and renter households are growing faster • than owner households White households are the only households in which the majority are owner-occupied • There are more than 85,000 renter households in Minneapolis – nearly 40,000 are headed by a person of • Color Tenure (Owner/Renter Status) for Minneapolis, Owner/Renter Status by Racial Group for Minneapolis, 2000-2014 2010-2014 52.3% 88,529 40.7% 82,579 83,408 68.9% 71.8% 75.7% 79.3% 79.5% 78,944 80,777 59.3% 47.4% 31.1% 28.2% 24.3% 20.7% 20.5% 74,047 2000 2007 2014 Owner HH Renter HH % of racial group who rent % of racial group who own 5 Source: U.S. Census Bureau, American Community Survey 1-year estimates
Minneapolis renters are facing increasing housing costs with decreasing incomes Owner households as a group are largely better off than in 2000, with increasing incomes and stabilized • housing costs Compared with those who were renting in 2000, today’s renters face reduced incomes and increasing • rents % Change in Median Income and Median Housing Costs by Owner/Renter Status, Minneapolis, 2000 - 2014 11% 11% 0% Income Housing Costs -14% Owner Renter 6 Source: U.S. Census Bureau, American Community Survey 1-year estimates
Minneapolis has less affordable housing than it did 15 years ago, and production is not keeping pace with loss Share of Housing Stock (Owner & Renter) Affordable at 50% of AMI 50% of AMI for a Unaffordable at About 168,700 total housing units About 171,660 total housing units family of four was 50% of AMI $45,300 in 2015 Affordable at 50% 62% 50% of AMI Decreased 50% 38% affordability 2000 2009-2013 Despite the City producing or preserving 8,900 housing units affordable at 50% of AMI, units affordable at • that income level have decreased dramatically In 2015, the City of Minneapolis had about 15,000 fewer housing units affordable at 50% of AMI or below • than it did in 2000 The City has about 9,500 fewer affordable rental units than it did in 2000. More than 6 in 10 of previously • affordable units in Minneapolis were rentals 7 Source: U.S. Census Bureau/HUD; Comprehensive Housing Affordability Strategy 2009-2013 5-year estimates, Metropolitan Council Housing Affordability Estimates, 2014
The majority of cost-burdened households have income <50% of AMI Number of cost burdened households by income group by owner renter status Minneapolis, 2009-2013 24,100 • A household is: Owner • Cost burdened if 30% or more Renter of household income is spent 10,065 on housing 5,300 4,990 4,935 3,660 2,950 • Severely cost burdened if 50% 445 or more of household income is < 30% of HAMFI 30% < 50% of 80% < 100% of >100% of spent on housing HAMFI HAMFI HAMFI • Renters represent about 3 out of 4 Share of income group that is cost burdened by owner renter status cost burdened and severely cost Minneapolis, 2009-2013 82% burdened households 77% 71% 69% • Home ownership reduces the 49% likelihood of cost burden for most Owner groups Renter 27% 10% 3% < 30% of HAMFI 30% < 50% of 80% < 100% of >100% of HAMFI HAMFI HAMFI 8 *Housing Urban Development Area Median Family Income Source: 2009-2013 HUD Comprehensive Housing Affordability Strategy estimates
Cost-burdened households are disproportionately communities of color • 45% of Black owners are cost burdened compared with 27% of White owners • About 1 in 2 American Indian households are cost burdened regardless of tenure Share of racial group that is cost burdened by owner renter status Minneapolis, 2009-2013 59% 52% 48% 48% 48% 47% 45% 40% 33% 32% 31% 27% Black or African- American Indian or other (including Hispanic Asian White American Alaska Native multiple races) Owner Renter 9 Source: 2009-2013 HUD Comprehensive Housing Affordability Strategy estimates
The energy cost burden is also disproportionately high for low-income and households of color Median Energy Costs by Household Type Low-Income Households, 5.11% African-American Households, 4.14% Latino Households, 3.14% Median Household, 2.32% Median Household Low-Income Households African-American Latino Households Households 10 Source: American Council for an Energy-Efficient Economy
Housing stability is a major concern for communities of color, as evictions disproportionately impact these neighborhoods Nearly half of renter households in • North Minneapolis experienced a filing in the past 3 years 2/3 of cases end with tenant • displacement 11
Historic discriminatory housing policies have had a lasting impact on development patterns Racial Covenants in Minneapolis Examples of discriminatory housing policies • include: FHA underwriting procedures • Racially restrictive covenants use in • Minneapolis from 1910 to 1968 Redlining, discriminatory lending practices • Zoning restrictions • Limited access to GI bill • I-94 construction and displacement • These development patterns continue to have • lasting effects Areas of historic racial covenants are still • primarily white today Neighborhoods with more than 70% of • housing units are single family Areas where current zoning allows for • multifamily Racially restrictive covenants found No racially restrictive 12 covenants found
These effects are present in housing tiers – challenged rental housing stock subjects residents to worse housing conditions and management practices Tier 2 & 3 Rental Licensed Properties by Ward Nearly half of Tier 2 and Tier 3 Tier Description properties are located in Wards 4 and 5. Well-maintained, managed, Tier 1 meet minimum housing code, use very few City services Maintained to minimum Tier 2 housing code and use some City services 41% of Tier 2 and Poorly maintained or Tier 3 units are located in Wards Tier 3 managed and require 3, 9 and 10. excessive City services 13 Source: Minneapolis Regulatory Services Department
Housing disparities have serious health impacts for residents – especially for children Minneapolis City Blocks where Children under Six Years Old were Poisoned by Lead, 1999-2014 1 child 2-4 children 5-9 children 10-19 children 20-29 children 30+ children 14 Source: Minneapolis Health Department
Agenda 1. Key trends around affordability, stability and quality 2. Levers to impact housing 1. Lever Focus 1: Financing 2. Lever Focus 2: Regulating 15
Fair Housing Overview Affirmatively Further Fair Housing - The duty to Affirmatively Further Fair Housing: “taking meaningful actions, in addition to combating discrimination, that overcome patterns of segregation and foster inclusive communities free from barriers that restrict access to opportunity based on protected characteristics” This means actions that: • Address disparities in housing need and access to opportunity • Replace segregated living patterns with integrated and balanced living patterns • Improve access to opportunity in areas of concentrated poverty where a majority of residents are people of color • Foster and maintain compliance with civil rights and fair housing laws 16
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