Report: Housing market gains hurting homeless

Tents set up in downtown St. Paul
Tents were set up near the Dorothy Day Center in downtown St. Paul nightly during the summer months, Sept. 9, 2014.
Hart VanDenburg / MPR News file

Improvements in Minnesota's metro housing markets could be making it harder for homeless people to find permanent housing, according to a report released Tuesday.

A dip in Twin Cities rental vacancies and statewide eviction filings have caused a rise in rental rates, according to the Minnesota Housing Partnership's semiannual report. Average rents in the Twin Cities hit $1,007 in the third quarter of 2014, according to the report.

Facing steep rents and a lack of high-paying full-time jobs, homeless people can struggle to find permanent housing, said Leigh Rosenberg, director of research and communications for the housing partnership, which advocates for more housing for middle- and low-income people.

"We've got a situation where it's extremely expensive to rent in the Twin Cities," she said.

The report notes median home sale prices remained flat or increased in Duluth, Rochester, St. Cloud and the Twin Cities over last year. It also says the statewide mortgage delinquency rate — the rate of people who fall behind on their mortgage payments — has steadily declined since 2010.

But an average of 372 homeless families turned to Hennepin County shelters for housing each month from last July to September, according to the report. Aside from an uptick in 2013, that's the highest quarterly average since 2000.

The report also found 3,982 homeless children across four school districts — Minneapolis, St. Paul, Duluth and Rosemount-Apple Valley-Eagan — over the same period of time, the highest since the partnership began collecting that data in 2008.

Improvements in the housing economy typically take time to filter down to those at the lowest income levels, Rosenberg said, which could have contributed to the rise in homelessness. She also pointed out the lack of full-time jobs exacerbates the issue.

"At the median level, we definitely see a big gap in terms of what people can earn and what they'd be able to afford given those earnings," Rosenberg said.

People of color are also more likely to be unemployed than their white peers, according to the report. Unemployment for African Americans averaged 11.2 percent for the 12 months ending in November, compared with 3.5 percent for the state's white workers.

That's part of the reason why homelessness disproportionately affects people of color in Minnesota, Rosenberg said.

The housing partnership and more than 100 other groups, operating as Homes for All, plan to ask state lawmakers for $39 million at the upcoming legislative session. That funding would increase the supply of affordable housing statewide, preserve what's already there and make it easier for homeless families to access resources, Rosenberg said.

This year the Minnesota Legislature designated $100 million in bond funds for affordable housing.

The report used statewide data when available but relied mostly on indicators from Minnesota's major metro areas. The group has heard anecdotal evidence of "severe" rental property shortages in greater Minnesota as well, Rosenberg said.

MPR News volunteer Sam Radwany contributed to this report.

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