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Met Council Policies Threaten Dream of Home Ownership

The Twin Cities face a chronic shortage of affordable housing. But not the kind activists like to talk up. There’s nowhere near enough affordable new starter homes for middle class buyers on the market, according to an MPR report.

Real estate developer Paul Heuer wants to build houses that regular people can afford. But he says increases in land, labor and lumber costs — in addition to regulatory costs — have made building a new starter home virtually impossible.

“Definitely on the first-time home buyer, there’s a substantial market that’s not being met,” Heuer said. “In the mid- to upper ranges, we’re doing alright. But on the lower ends we’re definitely not satisfying the needs.”

It’s the most sought-after segment of the housing market in the Twin Cities. But new single-family starter homes in the metro area cost north of $300,000, out of reach of the family budget for many first-time home buyers.

In fact, the median cost of a starter home here has increased $30,000 over the last ten years. Some 25 percent of the cost can be attributed to burdensome regulations, often imposed by local governments. At the same time,  the supply of lower priced existing starter homes continues to shrink.

Yet the Met Council may be the biggest villain in restraining the supply and increasing the cost of starter homes. The unelected regional government’s policies effectively limit the availability of land for building and thus the supply.

Heuer said he thinks the way to build more affordable homes is to build further out from the Twin Cities urban core. That’s been a successful strategy for developers for decades. People drive to affordability, builders say.

But that kind of development is restricted by the Metropolitan Council, which decides where it will supply critical infrastructure, like sewer lines, to homes. The Met Council establishes what are called growth boundaries, and Heuer thinks they should extend those boundaries to allow developers like him build farther out.

But Lisa Barajas, the director of community development at the Met Council, said the region can’t afford to extend sewer lines and other infrastructure farther than what they’ve already planned for. In addition, she said, the region doesn’t need more single-family homes.

In reality, regional planners don’t want to encourage you to buy into the American dream of owning a single family home. Here’s how Lisa Barajas puts it:

“We probably have enough single-family homes on the ground today to meet our total demand going through 2040,” Barajas said. “The issue is not the amount of single family homes, it’s who wants to have those homes and who’s still living in them.”

Nor do you need to read between the lines to conclude Ms. Barajas also sees a future for you in the urban core that revolves around bikes, light rail and walking.

…looking ahead, she predicts that the Twin Cities will need a different type of housing in the future.

“We would say overall there is a demand to live in more connected, walkable areas. That’s not just true for millennials, that’s true across generations,” Barajas said.

Who elected Lisa Barajas and her colleagues behind implementing these far-reaching policies?  No one. It’s the Met Council.

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