Is inflation lower in the Twin Cities because fewer people want to live here?
For a few months now, a common theme in the local media is that the inflation rate in the Twin Cities is lower than in comparable metropolitan areas. In October,…
We have a new ad running on 93X concerning high housing costs in the Twin Cities. You can only say so much in 30 seconds, so below are the facts we use in the ad and where they come from.
“Twin Cities homes cost more than in any other major metro, outside of coastal cities”
In April 2017, the Pioneer Press wrote
Outside coastal states like New York and California, the Twin Cities was No. 1 in housing costs among the nation’s 20 largest metro areas, according to 2014 U.S. Census data. And they have remained at or near the top of other cost-comparison surveys since then. Statewide, Twin Citians pay an average of 26 percent more than neighboring states. That price gap explodes when compared with southern states like Texas.
Source: Pioneer Press
“Minnesota’s excessive fees and regulations…add up to 30% to the cost of a house here”
Early this year, according to the Star Tribune,
…a new report commissioned by a builders group pointed at municipal fees and regulations in the Twin Cities, which it argues are pushing up prices of new homes more sharply here than in other communities, making it nearly impossible to build a single-family house for less than $375,000.
Such fees account for up to one-third the cost of a new house here and are to blame for the area’s affordable housing crisis, according the new report backed by Housing First Minnesota, which represents more than 1,200 builders, remodelers, developers and industry suppliers throughout the state.
The price of a new home “far exceeds what buyers paid years ago, even adjusting for inflation,” David Siegel, the group’s executive director said in a statement. “This disappearance of affordable new homes is not due to a change in buyer or builder preferences, but to homebuilders simply being unable to build at a price that many buyers in the region can afford.”
Minnesota’s affordable housing shortage is the result of government imposing excessive fees and regulations. It will not be solved by more fees and regulations, like rent control. It will only be solved by getting rid of a good number of these excessive, unnecessary costs.
John Phelan is an economist at the Center of the American Experiment.
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The legislature appropriates more money, the unions grab it for salaries, the school board cuts middle school band, and everyone blames the legislature for underfunding. Rinse and repeat.