We all recognize that there are a number of factors which contribute to these problems. And members of the Builders Association of the Twin Cities (BATC) are committed to participate in finding solutions that work for our region and our citizens. The fact of the matter is, our region will continue to grow. According to the Metropolitan Council, the Minneapolis/St. Paul area is expected to add 471,000 new households in the next two decades and two-thirds of this demand is home grown — households being formed by our own children and others already here. It is the housing industry that is charged with creating the new housing stock to accommodate these additional households, to the tune of 16,000 to 18,000 new homes annually.

The Problem

The median selling price of housing (currently at $215,900) is rising three times faster than median income, and this affects buyers of both new and existing homes at all price levels. Economists estimate that every $1,000 increase in home prices cuts 3,400 families out of the market in the Twin Cities. The problem is not only that the American dream of home ownership is being pushed beyond the reach of those with modest means. It’s the disappearance of the entire “middle market” of housing for families earning $50,000 to $75,000 and eager to “move up” from their starter homes.

A serious lack of developable land supply (i.e. land that has or is ready to accept infrastructure in the form of roads, sewer and water supply) in the places people want to live is one factor that has had a dramatic impact on the cost of housing. In the Twin Cities, land makes up about one-fourth of the sales price of a new home. So, for example, as the cost of a lot increases from $30,000 to $60,000 to $90,000, the sales price of the home may increase from $120,000 to $240,000 to $360,000. And, as the shortage of developable land drives up new homes prices, it creates a domino effect raising prices for resale houses as well.

BATC members are working hard to keep the cost of new housing down. We’re fighting to change policies that aggravate high land prices. We’re working to ensure fees and subdivision requirements from cities are fair and reasonable to encourage the kind of development that makes sense for today and for our future. And we’re supporting the efforts of citizen groups, local governments and the Metropolitan Council as they respond to the following development issues:

• Preserving natural resources. We support completing a natural resources inventory to identify, protect, and preserve open space and natural areas.

• Maximizing development and redevelopment. We encourage local governments to allow increased housing density (the number of homes allowed per acre of land). And we encourage redevelopment within our core cities and inner ring suburbs to reach its maximum potential. We will work with the Metropolitan Council and local municipalities as they seek adequate tools and the elimination of barriers to meet this goal.

• Securing a balanced regional transportation system. We will work with the region to encourage a functioning and balanced transportation system.

• Developing urban-styled neighborhoods. We support development including more urban-styled neighborhoods in the locations where families want them. That includes more compact neighborhoods with a variety of housing types, styles and price points, and neighborhoods that incorporate housing into mixed-use developments served by a combination of neighborhood amenities, shopping, services, and businesses as well as narrower streets designed to accommodate pedestrians, bicycles, and parking.


Useful BATC^sm links:

Cost Study Summary

Land Study Summary

Available Lot Listing