Local candidates neglect

Todd Milbourn

There’s little disagreement between Minnesota candidates running for state and federal office that the Twin Cities, like many metropolitan areas across the nation, are in the midst of a housing crisis.
However, with campaign rhetoric focusing on health care and education, little attention has been paid to the issue that has left more than 40 percent of Minnesota renters paying more than a third of their income for a roof over their heads.
“It’s been a challenge to get housing into discussions,” said Chip Halbach of the Minnesota Housing Partnership, a nonprofit advocacy group. “The candidates have planks (on the housing issue) but no indication of priority.”
In the Twin Cities, the lack of affordable housing is particularly acute.
About 2 percent of rental units in Minneapolis are vacant. The national rate is about 9 percent and housing experts say a 5 percent vacancy is a healthy market.
In campus neighborhoods, the market is even tighter.
The squeeze has pushed the average rent for increasingly dilapidated one-bedroom, campus-area apartments to $590 a month.
Most candidates acknowledge the severity of the crisis and its impact on economic development, family stability and school performance, but there is debate about who should be held responsible.
“We need federal intervention. The state and city can help, but don’t have enough resources,” said state Sen. Larry Pogemiller.
In Minnesota, the federal government provides about 75 percent of the money used for affordable housing.
U.S. Senate candidate Mark Dayton supports increasing federal aid for housing.
Incumbent Republican U.S. Sen. Rod Grams supports making housing more affordable by cutting taxes to free up money for renters and homeowners to spend on housing.
James Gibson, Independence Party candidate, favors increasing wages to ease the housing burden.
Republican presidential candidate George W. Bush supports tax credits to encourage construction of affordable homes in distressed communities. His opponent, Democratic candidate Al Gore, supports increasing the federal budget for housing vouchers which subsidize the rents of low-income renters.
The federal budget for affordable housing has steadily declined in recent years.
In 1975, the federal government allotted $54 billion for affordable housing. By 1999, that figure had decreased to $26 billion.
The spending cuts, as well as tax law changes which made affordable housing construction less attractive for potential developers, have been major contributors to the crunch.
The most significant local barrier to affordable housing is high property taxes on rental properties, according to the Affordable Rental Housing Task Force report, written by a consortium of state housing experts.
Rental apartment owners pay 2.4 times more on taxes than homestead owners for an equally valued property.
The code makes affordable housing construction a risky investment for potential developers.
Given the low rents collected on such properties, “your bottom line doesn’t work out when taxes are so high,” said Micah Kinder, of UM Properties LLC, a Southeast realty company.
Pogemiller said he supports reforming the property tax code and lowering the threshold for renters to receive rent rebates known as a circuit breaker.
“We need a combination of increased units, beefed up circuit breaker subsidies and further adjustment of property taxes,” he said.
Republican candidate for the state House Ben Bowman said he supports cutting property taxes and increasing housing construction near the University.
“(Property taxes) are a barrier. Students end up paying for that,” he said.
Other barriers noted in the report include the perception that affordable housing will bring “the wrong types of people” to a neighborhood, zoning restrictions, excessive governmental fees and a burdensome approval process.
Demolition has also played a major role.
The state increased general fund appropriations for housing to $120 million for the 2000-01 biennium, an increase of $45 million. But that figure remains about half of what housing advocates say should be spent.
Halbach said, “in relation to other states, Minnesota has invested well in affordable housing:
“But the problem is growing much faster than the resources.”
Todd Milbourn welcomes comments at [email protected] He can also be reached at (612) 627-4070 x3234