The social, market and political forces driving out affordable housing

Aeon just won the national ULI’s annual Jack Kemp Award for Excellence in Affordable Housing.  We won for Aeon’s work with Hope Community to complete the last phase of South Quarter IV, The Rose, at the intersection of Franklin and Portland Avenues in Minneapolis. It’s always nice when a group of national experts confirm that you did a good thing.

This morning I personally did a good thing. I voted. I voted, as our entire country tries to make sense of the noise.

We Are Losing Affordable Housing

At Aeon we’re working to make sense out of what I think will be the biggest affordable housing crisis for poor people since the early 1900’s. I think so because of the unfortunate simultaneous convergence of powerful social, real estate market and political forces.

  • Social Forces: There are continuing extremely negative perceptions of poor people in large sections of our communities; significant class warfare language and actions; extremely high feelings of disenfranchisement.  Ferguson. Baltimore. Black Lives Matter. Sanders. Trump.
  • Political Forces: There is the gross dysfunction of the federal government. Since Reagan started chewing at Section 8 housing support, there has been 35+ years of indifference and abandonment at best, and sometimes outright animosity at the federal level.  Not a single administration – Democrat or Republican – has done a damn thing about it. There has been almost zero mention of affordable housing in the current political campaigns. No matter who wins, I do not think there will be any real change of any kind in ANY arena.  Perhaps you don’t agree. But even if someone tries hard and is successful on the affordable housing front, there’s still Congress and massive bureaucratic inertia to fight, which is at least a ten-year battle under the best circumstances. You don’t dig yourself out of a 35 year hole in a couple of years.
  • Market Forces: A Harvard study says the United States is going to lose 2.2 million units of affordable housing in the next handful of years.  I think their estimate is very low. Seattle, one of the richest, most progressive cities in the nation, has totally lost control of their housing problems. They are authorizing tent cities of homeless people, and almost proud to be paying for the porta-potties in them. Seattle is our canary-in-a-coal-mine.

In the Twin Cities, the cost of purchasing older 1970s/1980s three-story-walk-up apartments in the last four years has gone from $50,000 to $90,000 per unit. And we’re happy if we are a successful bidder for one of them.  The Twin Cities has 13,500 homes in mobile home parks. All 13,500 will be gone in 20 years (except for the handful Aeon plans to save). The State of Minnesota has 50,000 mobile homes. All of them in parks are threatened.

Despite Aeon and dozens of others working in the City of Minneapolis over the past few decades, the City doesn’t have any more affordable housing today than it had 25 years ago.

Minnesota has at least 10,000 people homeless.  Seniors are now the fastest growing population of homeless persons. Minnesota has at least 150,000 people below the poverty level in cost-burdened situations, with half of them severely cost-burdened, and many of them living in deplorable conditions.

The state demographer says we’re going to add 500,000 people in the next 15 years.

(PAUSE)

And in Minnesota annually, about 1,000 new affordable units are created (and some of them are not that affordable).

I’m a math guy, and the result of adding up the numbers above will not favor poor people. Maybe I’m wrong. But even if I’m only half-right, we’re in big trouble.

So what is Aeon doing about it?

First of all, as much as is financially and politically feasible, Aeon will work to make homes possible for people with the greatest barriers. That’s where the greatest problems exist. Secondly, we’re working to become even more proficient at what we do. Proficiency to us is the practical combination of quality and efficiency. Third, we’re continuing to build innovative new ways to attract funding to these critical housing projects. All of the forces that I described above are pushing us to become more creative in making home a reality for the thousands of families that need support.

Please stay tuned. Please stick with us on this journey. It’s going to take all of us.


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3 Comments

  • […] On election day, I talked about innovation, the forces that have led us to the greatest affordable housing crisis in more than a century, and Aeon’s commitment to making Home a reality for those with the greatest barriers to safety and stability. […]

  • Jen Kennedy says:

    I find your work inspiring, needed and unfortunately largely ignored or trampled by the desire to have more Millennial Tech-Magnate buildings littering the sky with exorbitant pricing, while scores of families cannot secure a safe home in a safe neighborhood. Capitalism at it’s core, Minneapolis is in the middle of an economic divide that has no fix, no attention and very few people engaged in making a difference over making a dollar.
    I am doing my final college project on the Affordable living crisis in Minneapolis, and have found your Vision and Mission as a company, as one of the most courageous and actively successful businesses that still exists while overcoming the odds within this unbalanced battle.
    Thank You.
    For Everything You Do.
    It is needed, It is important, and thanks to your hard work and dedication, it is becoming a reality.
    No matter what the pace, and I know the hurdles,anything ….is better than ignorance and eating caviar off of the backs of the citizens in your city because you see an opportunity to make profit rather than make a difference.
    I applaud you, I support you, I am thankful for your successes, because they become serenity for others.


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