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Rising rents and declining wages making Minnesota housing unaffordable

WORTHINGTON — A recent report from the Minnesota Housing Partnership found that over the last 15 years, rent has risen across the state while income has fallen, which means more than one in four Minnesotans pay more for rent than they can afford.

The State of the State Housing 2017 report, released March 13, found that from 2000 to 2015, rent has seen a 9 percent increase, while income has seen an 11 percent decline statewide.

In southwest Minnesota, 39 percent of residents are cost-burdened, meaning they pay more than 30 percent of their income on housing.

A major issue in the region is the most popular jobs simply don’t pay enough to match rising rents. In 2015, the top five in-demand jobs in the region were nursing assistants, heavy truck drivers, cashiers, personal care aides and food preparation workers.

Based on median income, only truck drivers out of that group can afford the average two-bedroom apartment, or realistically become homeowners.

Big Stone, the region’s most northwestern county, has seen the biggest divergence since the new millennium. Median rent increased from $318 to $508, while wages dropped off from $21,614 to $16,083.

Cottonwood County had the second-largest increase in rent statewide at 43 percent.

The southwest region has the highest proportion of aging owner-occupied homes, with 34 percent in the region built prior to 1960. The study argues not only is rent too expensive; there also aren’t enough rental units being built.

“Despite the clear need for single-family development in the Southwest region, only 311 new single family homes were permitted in 2015, accounting for just 3 percent of all single-family homes permitted statewide,” the study says.

In the entire 18-county region, 50 multi-family units were permitted for development in 2015, accounting for less than 1 percent of all multi-family development in the state.

The study also points out racial disparity in the region.

“While 80 percent of white households own their home, only 43 percent of households of color own their home,” the study says. “While the region has a slightly lower homeownership gap than the state, the homeownership rate for households of color declined by 17 percent from 2010 to 2015, while the homeownership rate for white households fell by less than 3 percent.”

Chip Halbach, executive director of the Minnesota Housing Partnership, said Minnesota has long been a leader in housing, but hasn’t done enough to address the issue. The MHP reports that only 0.3 percent of the state budget addresses housing challenges.

“From racial disparities to cost burden, many housing trends are going in the wrong direction,” Halbach said. “If policymakers want strong, equitable communities, they cannot ignore the central role of adequate, affordable housing.

The full study can be found at