Do we really have a massive housing shortage?

[paiste13]

The twin cities in Minnesota have one of the lowest growth rates over the past 10 years according to the census.

We often hear that we need 80,000 housing units by various sources such as the met Council, MLS, and other trade groups. I have yet to see this somewhere reliable other than just quoted in an article, but let's assume it's accurate.

This great need wasn't as publicly discussed prior to the pandemic, and are population has not grown at all, so where do/did these people live before? Where are they living now?

[Trademark]

12.4% growth from 2010-2020 in Minneapolis
9.3% growth from 2010-2020 in St Paul

Minneapolis growth numbers by percent have outpaced Portland, Phoenix, Miami, Houston, Vegas and Boston. For Stpaul it's higher percent growth then Dallas, San Fran, San Antonio.

This is not the one of the lowest growth rates over the last 10 years by any means.

Already many people are underhoused as in living either farther out then they wish, getting a room for rent with a slumlord, or living with their family for longer then they wish. Not to mention the unhoused people many of them are invisible due to living in their cars, or crashing on couches.

People love to talk about how people are leaving the Metro, the core cities, and even the state itself. All of this is not true.

[twincitizen]

IMO the "80,000 units in the next 5 years" is probably somewhat building & construction trades propaganda, not a scientific number. It is true that there's been a bit of stagnation in the metro area's population since 2020, as more households than ever before are able to decouple their jobs from a need to live in the metro area, which has boosted the year-round population living in "cabin country" parts of the state. Despite those work-from-anywhere shifts, of course we can expect the metro area population to continue to grow, though keeping up the 2010-2020 pace of growth is unlikely. One major factor supporting more construction is the average household size continues to decline, as more people live alone than at any point in human history. I don't expect that trend to change. On that fact alone, there will of course need to be more studios and 1BR units built throughout the metro area.

I think it's a fair question if the metro area actually needs to continue building additional single-family stock. There have been studies that said, in the longer term, we already have enough of that housing type. However, those studies are pre-pandemic and wouldn't account for the increased interest in larger homes with space for office(s), so maybe there is a real need for additional large suburban homes. It seems like we're currently in an overlap period in which the large baby boomer generation mostly still live in the houses they raised their children in, even though they've been empty nesters for 10-20 years, and the similarly large millennial generation are now competing for those same homes. What happens when the baby boomers largely do not live in single family homes because of advanced age / declining numbers? The gen z cohort coming up behind millennials are slightly smaller in number. I'm not sure how much of a dent that makes in demand looking ahead to 10 or 20 years from now. Without a jobs boom in the TC or climate crisis driving in-migration, where does the demand come from?

I'm rambling here, but I'm glad I came back around to the jobs aspect. When we talk about growing the population and household numbers in the metro, that obviously requires growth in the number of jobs. I feel like we urbanists / demographics nerds often forget to include that in our thinking. I'm certainly guilty of obsessing over population growth and housing unit numbers without thinking too much about what drives those numbers up in the first place. I read that ideally you'd want to see new one housing unit built for every two jobs added in the metro. Most metros have fallen far short of that mark, whether looking at metros that have added very little new housing (SF) or those that have added a lot (NYC).

[Mdcastle]

Every new single family home that gets built gets sold, so I'm not sure we have "enough" of them.

It's true that there's a lot of people living alone or with one other person in single family homes. I live in one with my sister, a elderly lady across the street lives in one alone, Kitty corner is a four bedroom house with the parents and one kid still living there, the other two having moved out. But I don't think there's any reason to expect Gen-Xers and Millenials are going to run out and trade in their family houses for condos as soon as their kids move out. Having a private back yard and not having to share a common wall is still desirable if you don't have kids.

The thing we have a huge shortage of are "starter" houses that are modest but fully detached houses like the Richfield rambler. The lack of supply is driving up prices to the point a lot of people are either having to put up with living in condos and townhouses or else are spending the extra money to get an Elko McMansion since the cost isn't much more, the supply is greater, and you have a brand new house with no latent issues. I bought my Bloomington ranch house during the post 2008 market crash but I'd never be able to afford it now.

[amiller92]

The lack of supply is driving up prices to the point a lot of people are either having to put up with living in condos and townhouses

Especially in the city, we are very short on townhomes, which lots of people like to live in because they don't want to be responsible for maintenance.

[Nick]

I always thought that giving seniors the option to age into small apartment buildings in the neighborhoods they've lived in for 40 or 50 years was a really good argument in favor of allowing small apartment buildings in outlying neighborhoods around the city, and you don't really hear it played up much. I believe AARP or some organization like that supported Minneapolis 2040. Anecdotally I've known some older people who've wanted to do that and it's not really an option in a lot of areas.

Somewhat relatedly, the general scenario of "person in paid off house retires at 65, effectively runs out of money at 72, house starts to deteriorate, ultimately has to move when the maintenance problems get too severe, sells house for way less than they could have at 68 when it was still in good shape, moves to assisted living in Eagan" is something I feel like I see in Minneapolis a lot.

[Trademark]

IMO the "80,000 units in the next 5 years" is probably somewhat building & construction trades propaganda, not a scientific number. It is true that there's been a bit of stagnation in the metro area's population since 2020, as more households than ever before are able to decouple their jobs from a need to live in the metro area, which has boosted the year-round population living in "cabin country" parts of the state. Despite those work-from-anywhere shifts, of course we can expect the metro area population to continue to grow, though keeping up the 2010-2020 pace of growth is unlikely. One major factor supporting more construction is the average household size continues to decline, as more people live alone than at any point in human history. I don't expect that trend to change. On that fact alone, there will of course need to be more studios and 1BR units built throughout the metro area.

I think it's a fair question if the metro area actually needs to continue building additional single-family stock. There have been studies that said, in the longer term, we already have enough of that housing type. However, those studies are pre-pandemic and wouldn't account for the increased interest in larger homes with space for office(s), so maybe there is a real need for additional large suburban homes. It seems like we're currently in an overlap period in which the large baby boomer generation mostly still live in the houses they raised their children in, even though they've been empty nesters for 10-20 years, and the similarly large millennial generation are now competing for those same homes. What happens when the baby boomers largely do not live in single family homes because of advanced age / declining numbers? The gen z cohort coming up behind millennials are slightly smaller in number. I'm not sure how much of a dent that makes in demand looking ahead to 10 or 20 years from now. Without a jobs boom in the TC or climate crisis driving in-migration, where does the demand come from?

I'm rambling here, but I'm glad I came back around to the jobs aspect. When we talk about growing the population and household numbers in the metro, that obviously requires growth in the number of jobs. I feel like we urbanists / demographics nerds often forget to include that in our thinking. I'm certainly guilty of obsessing over population growth and housing unit numbers without thinking too much about what drives those numbers up in the first place. I read that ideally you'd want to see new one housing unit built for every two jobs added in the metro. Most metros have fallen far short of that mark, whether looking at metros that have added very little new housing (SF) or those that have added a lot (NYC).

I wouldn't necessarily trust the estimates that come out in between census of population stagnating. IIRC those estimates undershot the actual population that the census gave us.

[Tiller]

Relatively affordable housing (and thus cost of living) can be a draw for people and businesses alike. The further we can drive down prices and build more housing, the better imo!! We should be trying to push the limits of what can be built in terms of infill without subsidizing it with garbage like TIF.