Welcome to today’s roundup of real estate news, where we delve into the pressing issues and transformative policies shaping the housing landscape across the nation. From Governor Tim Walz’s impactful housing initiatives in Minnesota, which have notably kept rents low, to the broader economic challenges of rising housing costs and inflation, our coverage spans a spectrum of topics that touch every American. Whether it’s exploring innovative city planning in Minneapolis, analyzing market trends, or highlighting community efforts to provide affordable housing, our articles provide insightful commentary on the dynamics that are redefining the real estate sector. Dive into our stories to understand how these developments might affect you and your community.
Tim Walz is a YIMBY. He’s supported a ton of new housing that’s kept rents down in Minnesota. – Business Insider India
The state of the economy and the cost of living are top of mind for most American voters this year. Chief among these issues is the cost of housing. As home prices and rent have soared over the last several years, more Americans than ever are homeless or spending unsustainable amounts on shelter.
President Joe Biden and Vice President Kamala Harris have rolled out a slew of policies and new funding designed to boost the supply of homes and subsidize affordable housing.
Pro-housing advocates argue the administration hasn’t done nearly enough. But some are encouraged by Harris’ selection of Minnesota Gov. Tim Walz as her vice presidential running mate. Walz has overseen a significant push for new housing, including reducing regulatory barriers to construction, and supported progressive efforts to support low-income tenants and homebuyers.
As Minnesota’s governor, Walz has put serious money behind housing initiatives. In May 2023, he signed a $1 billion housing omnibus law, which included funding for programs ranging from downpayment assistance to workforce housing. In December 2023, he provided an additional $350 million for affordable housing initiatives.
Walz also signed legislation expanding tenants’ rights, including requiring landlords to give tenants two weeks’ notice of an eviction filing and expunging evictions from Minnesotans’ records after three years at most.
Walz has also supported efforts to cut red tape around both housing and infrastructure construction. Earlier this year, he signed into law reforms to speed up the permitting processes for clean energy projects.
“We also have permitting that takes too long and prohibits, or makes more expensive, doing renewable energy projects,” Walz told New York Times columnist Ezra Klein recently. “That same thing applies on housing, that we put up barriers to make it more affordable.”
National political leaders and housing advocates have taken notice. In June, Treasury Secretary Janet Yellen traveled to Minnesota to celebrate the city’s housing reforms and unveil new federal programs to boost housing production and affordability. “Programs in Minneapolis serve as an example of federal, state, and local efforts working in concert to increase housing supply and lower its cost,” Yellen said in a message on X.
A slew of housing advocates and self-described YIMBYs, or supporters of the pro-development “Yes In My Backyard” approach, have hailed Walz’s selection this week.
“The building code modernization wing of the Democratic party is celebrating today,” Jenny Schuetz, a housing policy expert at the Brookings Institute, wrote on X, sharing a news article about Walz’s action on building code reform in Minnesota. “Can a push to legalize single-stair buildings nationwide be far behind?”
“First YIMBY VP nom?” Daryl Fairweather, Redfin’s chief economist, asked in a post on X.
Minnesota’s biggest city — Minneapolis — has long been a national leader on pro-housing policy.
In 2009, the city began reforming its land-use laws — including getting rid of parking requirements and shrinking home lot sizes — to boost the supply of housing.
In 2018, Minneapolis became the first in the country to end single-family zoning citywide — part of a comprehensive city plan designed to reduce inequities, including racial segregation. The policy — passed by the city council in a 12-1 vote — allows duplexes and triplexes on all lots that used to be reserved only for single-family houses, paving the way for smaller and more affordable homes. It also opened up multifamily housing development on commercial corridors and near mass transit.
A lawsuit in 2022 paused the policy’s implementation until the Minnesota state legislature passed a law — signed by Walz — in May allowing the plan to go forward.
Over the last decade, Minneapolis has constructed a ton of new and dense housing, which has significantly improved affordability. Between 2017 and 2022, the city grew its housing stock by 12%, while rents rose just 1% — far lower than the 31% in rent growth across the US during the same period. The city’s housing policies have been credited with dramatically slowing rent growth and thereby keeping inflation down. Last year, the Twin Cities became the first major metro area to keep inflation below the Fed’s target of 2%.
Claudia Myers column: Duluth’s got a hold on me – Duluth News Tribune | News, weather, and sports from Duluth, Minnesota
When I was 17 in 1957, my parents and I moved to Minnesota from Upstate New York. It was a tough time in my life to move to a new place and to say that my teenage friends that I had known since first grade felt sorry for me is an understatement.
They were pretty much horrified. One of the things that concerned them most was: “But, I heard they don’t even have TV out there yet. You’re going to miss ‘American Bandstand!'”. Put a big whine on that last quote and you have the general interpretation.
We were moving to Rochester, Minnesota, which as the medical capital of the world certainly had television in 1957, but that widely held perception of Minnesota as a northwoods wasteland has always put Duluth, my adopted hometown, at the very top of the list of places you wouldn’t want to live, or even visit.
Until you’ve been here. Then you do pretty much everything you can to visit regularly or move here. We try to keep it a secret, but once you’ve come over Thompson Hill and seen the lake and the city spread out before you, what else can you do?
I have always said that the two best things I have done in my life are marry Tom and move to Duluth. The kids come in a very close third.
We came to Duluth for the first time in 1962, one baby in tow, so Tom could do his internship at St. Mary’s Hospital. The 11 interns’ families, all of us, lived in the Shoreview apartments, right across the street from St. Mary’s, so our world was pretty small. Interns were forever on call so we didn’t go far from the hospital.
We knew where the closest grocery store was and Joe Huie’s, down on Lake Avenue, was the place we’d go for a big night out on the town. Occasionally, we’d drive out to the gravel pit on Jean Duluth Road to do a little target shooting and tramping around in the woods, but downtown was pretty dismal with lots of empty storefronts and big, old hotels and turn-of-the-century buildings withering away.
No Highway 35 yet, so no Rose Garden, no Grandma’s or other Canal Park attractions, no Miller Hill Mall, no Target, no Spirit Mountain and the Depot was still a train station. We had no clue there were nice residential areas all around us, east and west.
However, one time, all of us intern couples were invited to a lovely buffet dinner at a Duluth Clinic physician’s house out in the Congdon area. It was all very nice, in a beautiful, old home, until one of the guys tripped and dumped his plateful of food on the brand-new carpeting, resulting in an early end to the lovely buffet dinner.
The big thing that happened while we were here was the opening of the wonder of wonders, Goldfine’s by the Bridge, where you could buy anything from a package of lunch meat to brake pads for your Chevy or a three-piece living room suite with sofa, two chairs, footstool and a coffee table. Another place to go. Yay!
There were things you could afford to buy when you got there! The thing that made it possible was the replacement of the scary old swing toll bridge, which for so many years was one of only two ways to drive to Superior, Wisconsin. With the construction of the new ”High Bridge,” renamed the “Blatnik Bridge” later on, suddenly you could get to Superior much easier.
Now, we could go to Louis’ Cafe for its Greek food and pancake breakfasts.
An internship only lasts one year so, in July 1963, we left Duluth, saying to each other, “Well, we won’t be coming back here again, anyway.” Only because the point is, we did come back and have been very happy we did.
Fast-forward to 1969, whizzing through two years of living in Germany, two more babies, three years of residency at Mayo and our first house: a little English Tudor south of Lake Harriet in Minneapolis. This was what we’d planned to do, through all those years of training: Move to the beautiful city of Minneapolis so we wouldn’t have to drive 90 miles from Rochester to go to the museums, the theater, the zoo, all the festivals and amenities.
We tried to make our plans work — we did. But, there were too many people; things were too expensive; there was too much driving. It just wasn’t working.
Dang it. We just moved here! Dang it. We just bought a house! Dang it. Dang it! Tom had joined the clinic in Golden Valley! And, we had found babysitters! Triple-dog dang it. What do we do, now? We have to find the right place! Preferably before all the kids start school.
Our solution was to pile the kids in the station wagon and drive to places that sounded appealing, had job openings and where we had friends to stay with.
So, how on earth did we wind up in a place where unemployment was high, where we didn’t know anybody, and, last time we saw it, looked like it was about to close down? I’ll tell you next time, but here’s a spoiler: The lake did it.
Inflation continues to cool, but housing prices aren’t helping
U.S. inflation dipped below 3% in July for the first time since 2021, though stubborn housing costs have kept price increases higher than monetary policymakers would like.
Consumer Price Index (CPI) data released Wednesday showed a 0.2% inflation bump between June and July, in line with economists’ predictions, and a 2.9% uptick year over year. But after moderating slightly in June, shelter costs rose 0.4% and accounted for nearly 90% of the overall month-to-month increase.
In the Twin Cities metro, overall inflation rose 1.3% in the past two months and 3.5% year over year, outpacing the national trajectory. The shelter index increased 1% in the latest two-month period and 5.9% over the year.
Part of the problem is interest rates — which Federal Reserve officials are holding at a 22-year high to temper consumer spending and bring inflation down — have strained the housing market by dissuading buyers and stalling much-needed new construction. The median home price in the Twin Cities region was $390,000 in June, up 1.8% year-over-year, according to Minneapolis Area Realtors (MAR). Average monthly rents in the metro reached $1,500 in the second quarter, Marquette Advisors reported, as demand outstrips supply.
Nationwide, new home sales fell more than 11% between May and June, according to a MAR report of U.S. Census Bureau data. Between July 2023 and June 2024, pending home sales in the Twin Cities were down 2.2%. Meanwhile, Housing First Minnesota reported in July builders in the metro pulled 452 permits for new single-family homes, a 1% year-over-year increase, and permits for 150 multifamily units, a whopping 303% decline.
“The macroeconomic forces that have influenced demand — and they have, interest rates have moved a segment of demand to the sidelines — that’s happening concurrently with a 15-plus-year undersupply of housing,” said Housing First CEO James Vagle. ”To understand the housing market and to understand how housing prices continue to outpace other market segments in an inflation environment, you have to look at the undersupply. We simply don’t have enough homes.”
The year-over-year inflation picture is rosier. The shelter index rose 5.1% from last year, the lowest since March 2022, and overall year-over-year inflation is within reach of the Fed’s 2% target. Though the personal consumption expenditures (PCE) price index is the central bank’s preferred inflation gauge, policymakers take a variety of measures into consideration.
“The trend continues to make its way down, so we’ll see what comes next,” said Erick Garcia Luna, regional outreach director at the Minneapolis Fed. “That’s great, given how the year started.”
The shelter index is largely based on rental prices, with the cost of homeownership represented as “owners’ equivalent rent.” It also includes lodging away from home and rental and household insurance. Because it takes time for rental costs to change as leases run their course, economists expect about a yearlong lag before shelter inflation shows up in the data, though that has yet to happen.
“It’s been a really strange environment. Usually, when the Fed changes monetary policy, the housing market is the first sector to get hit,” said Scott Anderson, chief U.S. economist and managing director at BMO Capital Markets. “We haven’t necessarily seen that yet because I think the rates went up so quickly on mortgages, and people had bought a lot of houses during the pandemic, locked in those low mortgage rates, and they’re very reluctant to give those up.”
The 5.25% to 5.5% federal funds rate has driven the 30-year fixed mortgage rate up from less than 3% in 2020 and 2021 to roughly 7%. Fed officials are widely expected to make a rate cut in September, though, from their perspective, the benefits of a slow housing market in the fight against inflation likely outweigh the squeeze that high rates have put on new construction, said Tyler Schipper, an associate economics professor at the University of St. Thomas.
“It is kind of two steps forward, one step back,” he said. “But I don’t think, from the Federal Reserve’s perspective, they would see lowering interest rates as a way to solve housing inflation.”
Government policy changes allowing a greater array of housing to be built are a more likely solution, Vagle said. He pointed to recent reforms in Minneapolis, including eliminating parking minimums for new construction and allowing duplexes and triplexes on all residential lots.
Mayor Jacob Frey on Wednesday proposed a 2025 budget that includes money for building affordable housing. On Tuesday, St. Paul Mayor Melvin Carter floated a $7.4 million housing plan as part of his budget address and asked the City Council to scale back the city’s rent control law to spur housing construction.
Also Tuesday, the U.S. Department of Housing and Urban Development (HUD) announced $100 million in local grant funding aimed at spurring housing construction nationwide.
“When we build at scale, when we do a surge of building to overcome the undersupply, we see a direct response in price point moderation,” Vagle said, “which is great for consumers.”
Staff writer Jim Buchta contributed to this report.
Emma Nelson is a reporter and editor at the Star Tribune.
Landlords turn to concessions to lure renters in increasingly competitive market
More landlords are offering concessions to lure tenants with more apartments hitting the market. Rental market supply and demand appear to be coming into better balance, as more multifamily units were completed in June than in any month in nearly 50 years, according to a new Zillow report.
A third of property managers are now offering concessions – perks that could include free weeks of rent or free parking. That’s up from about 25% last year. The typical rent is now $2,070, up 3.4% compared to last year. The typical asking rent for a single-family home is $2,294, according to Zillow. The typical asking rent for a multifamily unit is $1,916.
Since the beginning of the pandemic, rents nationally have increased by about 33%. But the rate of rent increases has cooled considerably from its peak. Rents grew between around 5% and 15% on an annual basis every month for a roughly two-year period that ended early last year.
Zillow says renters need to earn about $82,000 to afford the typical rent. Wages have grown 3.6% over the last year, slightly outpacing the current annual rate of rent growth.
“As with broader inflation, the biggest part of pain is probably behind us,” Bankrate Senior Economic Analyst Mark Hamrick said Tuesday. “But that doesn’t mean that you’re going to be relieved of the burden of high rent cost, broadly speaking.”
Hamrick noted that landlords can only raise rents so much before they’re pricing would-be tenants out of the market. So, the increase in concessions is probably a way to ease some of that pain.
“And let’s remember also that those concessions can be one-time-only events,” Hamrick said.
A previous Zillow report found that the nation’s housing deficit is deepening. The housing shortage grew to 4.5 million homes in 2022, up from 4.3 million the year before, according to Zillow. There were about 8.09 million “missing households” that year, Zillow said. Those are people, including families, living with nonrelatives. At the same time, there were just 3.55 million housing units available for rent or for sale. Families increased by 1.8 million, but only 1.4 million housing units were built, Zillow said.
Zillow said the housing deficit is the root cause of the housing affordability “crisis.”
Home construction slowed after the Great Recession. New home construction bottomed out in 2011, with only around 585,000 completions that year. Home construction has inched up every year since, but we’re still far short of the 1.6 million to 1.9 million homes that were being built each year in the early 2000s. And the deficit grew with seven straight years of fewer than a million completions.
A lot of folks have been forced to rent over the last few years as they’ve been priced out of the homebuying market. The typical home price is up about 4% from last year, up 16% in the last three years, and up 50% in the last five years. The median existing-home sales price is now $426,900, according to the National Association of Realtors.
But mortgage rates just fell to their lowest level in over a year, now 6.47% on a typical 30-year fixed-rate mortgage. So, that could entice more renters to enter the buying market.
While the Zillow report showed the typical U.S. rent at $2,070, there are obviously wide variations from city to city. Someone living in Kansas City, for example, needs to earn about $60,000 a year to comfortably afford the typical rent. Someone in Los Angeles needs to earn twice as much to also afford the typical rent.
“It’s important to remember that these numbers are in the aggregate nationally, and there is a lot of validity to the idea that real estate and housing dynamics do tend to be local,” Hamrick said.
Joyful Spirit Methodist Church to host open house for new building – Wadena Pioneer Journal | News, weather, sports from Wadena Minnesota
If you build it, they will come — at least that was the hope the congregation of Joyful Spirit Methodist Church had when it built a new church building in Wadena. And it seems to be paying off with new members joining the church since its construction at 61847 Minnesota Highway 29 where once nothing stood, according to the Rev. Ricardo Alcoser.
Wadena United Methodist Church and Deer Creek United Methodist Church merged to become Joyful Spirit Methodist Church effective starting in 2018. And with it, the idea of a new location and new building for Joyful Spirit was born.
The Otter Tail County church will hold an open house from 10 a.m. to 4 p.m. Saturday, Aug. 10, that will include door prizes, a silent auction, children’s games and free food.
“The purpose of the open house is to let the community be aware that our church is complete,” he said. “We’re now fully functional. … And we have had people from the community who already have stopped to visit, and we have had others who already joined the church.”
Alcoser said in his three years as the pastor of Joyful Spirit Methodist Church more than 30 people new to the congregation now attend the 11 a.m. Sunday services at Joyful Spirit Methodist Church.
“It was 5 acres of nothing here,” Alcoser said of the site of Joyful Spirit Methodist Church near Black’s Grove Park. “When I became their pastor, it was basically flat land. … And part of the reason we left our old building was it was not handicap-accessibly or kid-friendly.”
The congregation met at United Church of Christ Church in Wadena for a time during the transition and then worshipped out in the open at the new location off Minnesota Highway 29 before construction of the new building was mostly finished.
“I became their pastor, and we immediately started building three years ago,” Alcoser said. “It’s still not completely finished, but we finished the structure in 2020. … We did a lot of the interior work ourselves, painting the ceiling. We did a lot of putting in the insulation – sweat equity.”
JR Construction out of Verndale was hired and the project was kept local with local materials from Merickel Lumber.
The church raised 75% of the more than $1 million construction cost and has a loan to construct the 7,500-square-foot building with a 2,500-square-foot basement.
“And we’re hoping now that by doing this open house more people will say, ‘Yes, that church is growing, that church is doing well,’ and will stop and give us a try,” Alcoser said.
FRANK LEE is the features writer for the Wadena Pioneer Journal. He may be reached at 218-631-6470 or at [email protected].
Habitat to receive affordable housing funds from Brainerd – Brainerd Dispatch | News, weather, sports from Brainerd and Baxter
Habitat for Humanity will get funds from Brainerd to build three new homes for families in need. Another local housing nonprofit will not receive funds requested from the city.
While housing is a hot topic in Brainerd on the heels of a council decision to enact an ordinance that bans camping— including homeless encampments — in public places throughout the city, the council also voted 5-2 Monday, Aug. 5, to allocate Statewide Affordable Housing Aid dollars to Habitat for Humanity while passing over a request from My Neighbor To Love Coalition.
The money came from the state in December 2023 and was given to counties, tribal governments, and Greater Minnesota local governments to help develop and preserve affordable housing options. Brainerd received $96,242 in both 2023 and is set to receive the same amount in 2024, with half allocated in July and half in December.
Habitat for Humanity proposed using the funds for three houses on Pine Street, B Street, and near Rice Lake in northeast Brainerd. The Pine Street house is for a single mother with two children and will include adaptations for a daughter with special needs, while families are yet to be determined for the other two homes.
On a vote of 5-2, with Terry and council member Tiffany Stenglein opposed, the council awarded $88,000 to Habitat for Humanity.
The Statewide Affordable Housing Aid funds must be used by Dec. 31 of the fourth year after they are awarded to the city.
THERESA BOURKE may be reached at [email protected] or 218-855-5860. Follow her on Twitter at www.twitter.com/DispatchTheresa.