Updated: Aug 16, 2019
If the City is serious about addressing racism and housing, it first needs to protect the housing that families of color need.
Affordable housing, especially housing for the lowest income residents, has become what economists call a “merit good.” A merit good something that the marketplace could produce but doesn’t produce enough of at a cost acceptable to society. The classic example is K-12 education. Parents could pay for a private education for their children, but the cost would be too high for most parents. Because it is to society’s benefit to have educated citizens, society pays to educate all children even though the marketplace could provide K12 education. Affordable housing has become a merit good also. The market fails to produce enough affordable housing because it is simply too expensive to do so. The question is what should government do about it?
Ms. Worthington misses another critical point in freeing developers to demolish single family homes. One out of every five persons in Minneapolis is under the age of 18. (US Census) 80% of children live in single-family homes. (US Census) 70% of new housing is one bedroom or smaller. (HudUser) Virtually all remaining new construction is two bedrooms. Yet families of color are larger on average than white families. 20% of black and Hispanic families have four or more children, twice the rate of white families. Families of color are also twice as likely to be multi-generational, with almost 30% of black families being multi-generational. (US Census) The City is approving new housing too small for families of color and demolishing housing that is large enough for families of color. Yet it is families with children, especially families of color, who are hit hardest by the affordable housing shortage. It is hard to not see this as systemic racism.
In addition, ownership housing is being demolished and replaced with rental. For every ownership unit being built in Minneapolis, 8.5 rental units are being built. (HudUser) In addition, hedge funds like Havenbrook are buying up single family homes and converting them to rental. Minneapolis is now a majority rental city. This is a bad thing. In one year, this represents a transfer of wealth of about $1.6B from citizen primarily to corporations. Handing over 30% - 50% of your rent to corporations just creates a treadmill of poverty. This is, in part, why people of color have fewer assets and are poorer than white people. Minneapolis choosing more rental over more home ownership seems to also be systemic racism.
If the City is serious about addressing racism and housing, it first needs to protect the housing that families of color need. That means reinstating protections for single family homes. It also means prioritizing new ownership development over rental development to build wealth for residents. It means providing bonuses, not just for affordable homes but for three- and four-bedroom units that families need. And it needs to acknowledge that the private marketplace is not going to deliver housing for lower income people even if you demolish single family homes. That is the real issue that the City has to face. And it isn’t going to be cheap or easy. And it won't be fixed by a simple zoning change.
"If the City is serious about addressing racism and housing, it first needs to protect the housing that families of color need."; By Carol Becker; VOX.MN; August 15, 2019