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Stronger economy helping Minnesota homeowners, but not renters or homeless

lofts
MinnPost photo by Corey Anderson
In Minnesota, according to the MHP’s report about the last three months of 2012, “[T]he slowly improving economy bolstered homeowners and the housing industry, but not renters or the homeless.”

With emergency shelters swamped last fall, an advocate for the homeless suggested to me the lack of affordable housing in our community could get so bad the homeless might be left to pitch tents.

I took the comment as part hyperbole, but definitely thought-provoking and disturbing and duly reported it.

I’m not saying I believe Minnesotans would let this happen, but I also can’t shake off that thought after reading the quarterly “2x4” Report released this week by the Minnesota Housing Partnership, an organization with a mission of creating and preserving affordable housing for people of low and moderate income.

After all, homelessness has come down to tents elsewhere. I’d turned away in shock to see tents pitched in London parks in 1991 during those low economic times following the first Persian Gulf War and read of them during the Great Recession when tent cities sprang up in the United States.

Only this month, in fact, a tentative agreement was reached between local government and 80 homeless persons who had pitched tents in woods near the Jersey Shore in Lakewood, N.J., some of them living on public land there for several years. The issue: “a dispute about local governments’ responsibility to care for the poor.’’  

The upshot: local government will find those New Jersey folks safe indoor shelter.

In Minnesota, according to the MHP’s report about the last three months of 2012, “[T]he slowly improving economy bolstered homeowners and the housing industry, but not renters or the homeless.”

“Between high and rising rents, renter wages which have fallen over the decade and limited job prospects, those struggling to find good jobs, including many people of color have been hit hard,” according to the report.

Twin Cities rents and vacancy rates

chart of rents
Courtesy of Minnesota Housing Partnership
Even as renter wages have fallen, average rents in the Twin Cities have steadily risen.

Though Minnesota’s unemployment rate has come down to 5.5 percent from a recession high of 8.5 percent, not all are benefiting, the report notes. A preliminary Wilder Research report this month showed homelessness up about 6 percent since 2009.

Key findings

Among the high points of the MHP tally, which comes as the Legislature considers increased funding proposed by the Homes for All Coalition — to which MHP belongs — are:     

  • Unemployment is higher for people of color, with Minnesota ranking 14th for white workers for unemployment, but 37 for African-Americans, according to the Economic Policy Institute. That report shows the unemployed ranks of this mostly white state as 5 percent white but 13.1 percent African-American.
  • The JOBS NOW Coalition reported 39 percent of job openings in the fourth quarter were part-time spots paying a median wage of $9.41 an hour and job-searchers outnumbering full-time jobs four to one. JOBS NOW suggests a family of four needs both parents working full-time and earning $14.03 an hour to meet basic needs.
  • The 2013 Out of Reach report labels Minnesota as having the least affordable housing for minimum wage workers in the Midwest.

The rental market continues to be tight with only a 2.9 percent vacancy rate overall and a 2.5 percent vacancy rate for “lower-end” apartments.

Rents have increased, as have “past due” rents in “non-luxury” apartments.

On the bright side, mortgage delinquency rates, pre-foreclosure notices and foreclosures are “trending downwards.”

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