Minnesota is grappling with a deepening housing shortage, a critical issue examined in a recent panel discussion hosted by the Sensible Land Use Coalition (SLUC). The event brought together industry leaders and experts to discuss the state’s growing need for housing units of all types and explore potential solutions to this ongoing crisis.
SLUC, a network of land planning, development, and regulatory professionals from both public and private sectors, convenes regularly to address key challenges in Minnesota’s housing market.
This latest session, moderated by real estate attorney Bradley Schaeppi, focused on the state’s housing deficit and strategies to overcome it.
The panel featured Nick Erickson, Senior Director of Housing Policy for Housing First Minnesota; Evan Roberts, Assistant Professor at the University of Minnesota; and Cecil Smith, President and CEO of the Minnesota Multi Housing Association. Their discussion began by outlining the scope of the housing shortfall in the state.
According to Erickson, housing production in Minnesota has never fully recovered from the Great Recession and has been declining steadily since peaking early in the COVID-19 pandemic, leaving the state short by 106,000 units. This number, derived from data by Up for Growth, is four times the current rate of housing production in 2023. As a result, the limited available homes have become increasingly unaffordable.
“To return to pre-pandemic affordability, home prices would need to drop by 30%, household incomes would have to rise by 60%, or the average 30-year mortgage rate would need to fall by 450 basis points,” Erickson explained.
One potential solution discussed was zoning reform at the state level, which advocates believe could provide more housing options and improve affordability for both buyers and renters. Roberts emphasized the importance of diverse housing types, noting, “The type of housing we’re allowing to be built is crucial. It’s part of a broader conversation about the kind of state we want to be.”
Erickson also highlighted the role of local governments in contributing to the housing supply crisis. “Since 2018, the state has deferred to local governments on housing matters, and during that time, the housing deficit has doubled,” he said. However, local entities have also been instrumental in addressing the problem.
Last year, a coalition of housing industry members, community partners, and elected officials formed to advocate for state-level zoning reform. This diverse group, including some local government leaders, aims to ease restrictions and increase housing production.
“Our coalition is one of the most broad-based and diverse in the country,” Erickson noted, adding that some local leaders were among the key supporters of the effort.
The coalition is expected to continue pushing for reforms during the 2025 legislative session, as Minnesota’s housing crisis remains an urgent concern.
