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Tim Thompson: Affordable housing takes a hit in the metro
06.12.2010 - Star Tribune

Just as cities were completing plans, the Met Council lowered the bar.

The Metropolitan Council took action recently that got little attention but which has big implications for affordable housing. Unfortunately, the council lowered the bar for housing goals and missed a big opportunity to try to squeeze more affordable units out of our government housing subsidies.

The casual observer might wonder why this is important given falling home prices over the last couple years. After all, isn't there more affordable housing now? The reality, though, is that these falling home prices have also been accompanied by falling incomes. Even more importantly, rents at the mid to lower range for apartments remain substantially out of reach for too many households in the region.

Housing is so costly to build or renovate that governmental subsidies are almost always necessary to make homes and apartments affordable for people like teachers, firefighters and health care workers. But the other critical element in achieving affordability are the policies local governments employ to make the developers' jobs easier or harder. That's why the Legislature enacted two different laws requiring the Met Council to establish affordable-housing goals -- and action plans to meet the goals -- for every local government in the region. As we all know, difficult long-term projects are almost impossible to realize unless we set goals and measure progress on meeting them.

Over the last two years, every city in the region has updated its comprehensive plan for the next decade. As part of that process, the Met Council assigned an affordable-housing goal for each city, for which cities then made plans. The goals were based upon each city's share of the regional need for affordable housing (using a modest definition of the need). But at a point when the ink was barely dry on these new efforts, the council undercut them by establishing new goals under the Livable Communities Act program (LCA) at 65 percent of the goals cities had just finished planning for.

Why would the Met Council do that? The rationale was that many cities had complained that the comprehensive plan goals were unrealistic, given the limited funding available to produce affordable housing. So in developing LCA goals, council staff made a best guess as to the likely government funding for affordable housing in the region over the next decade, and concluded there would be sufficient funding to meet 65 percent of the region's collective goal.

The point of these housing goals laws is to create incentives and direction for cities to adopt the most-effective policies to promote affordable housing. But a goals approach that is simply based on using the available public subsidies accomplishes nothing -- all the public subsidies get used every year anyway. The point of these goals should be to encourage cities to use local tools -- density bonuses, accelerated permitting, other developer incentives -- to squeeze more affordability out of the public resources we're getting. It's reasonable to expect market-rate developers to include some affordable units, for example, if cities provide the financial incentives to make that feasible. Some cities have been quite innovative and successful in using these local tools. But full use of these tools remains very uneven. We should have a goals process based on spreading those innovative practices across the region more effectively. Instead, we've adopted goals that will mean that some cities currently on schedule to meet or exceed current goals will see their future goals drop -- even though their future needs remain large.

There's no point in completely unrealistic goals, but there's also no point in goals that urge nothing more than business as usual. It's true that cities are struggling financially these days, but many of the most-effective policies cities can adopt cost them nothing. If cities lack staff with housing expertise, a modest regional investment in technical support could solve that problem.

The Met Council's action amounts to a message that we can't expect cities to do any better. In every other field we're asking government to do more with the resources it has. Why not housing?

Tim Thompson is president of the Housing Preservation Project, a St. Paul-based nonprofit organization.