If you live in a three bedroom apartment that rents for $1,400 per month or less, consider yourself lucky. That’s affordable housing, whether it’s subsidized or not, and it’s running out, according to a new report.

The report from the Metropolitan Council, the metro’s regional planning agency, finds that the seven-county metro likely lost more affordable housing than it added since 2011, despite efforts to the contrary.

The report, “At a Loss: Affordable Housing Production in 2017,” states the metro added nearly 9,000 new affordable homes since 2011.

That’s far below the goal of 51,000 new affordable units between 2011 and 2020 to keep pace with demand.

Meanwhile, the report states that the metro lost upwards of 1,300 affordable units annually since 2011 — and possibly many more than that. That’s a net loss of at least 1,251 affordable units.

“Our affordable housing production has really kind of been flat over these last several years, while market-rate units are starting to get back to some of the levels we had seen before the Great Recession,” said the Met Council’s Community Development Director Lisa Barajas.

New market-rate development hit a high point with 14,683 housing units added in 2017. Overall, one in every eight new units added to the metro region in 2017 was considered affordable.

‘HOUSING COST BURDENS’ DROP

On the bright side, the percentage of households considered “housing cost burdened” — or paying more than 30 percent of their income toward housing — fell for the sixth consecutive year, from 35 percent in 2011 to 28 percent in 2017.

There were 19 cities and townships, however, where housing cost burdens worsened or stayed the same.

“Low-income households live in every city and township in the region and the vast majority experience housing cost burden,” states the report, which is updated annually. In fact, more than 3/4ths of the households earning half of area median income or less were “housing cost burdened.”

The Met Council considers low-income households to be at or below 60 percent of area median income, which is calculated annually by the U.S. Department of Housing and Urban Development.

By that definition, a family of four with an income of $51,480 would be considered low-income. The Met Council says housing costs should take up no more than 30 percent of income. To be affordable by that measure, monthly rent for a three-bedroom apartment would have to be $1,410 or less.

Most new affordable units can be found in multi-family apartment buildings. Affordable single-family homes and affordable townhouse production hit a new low in 2017.

LOSING NOAH

The Met Council report draws on a wide variety of data sources, including the U.S. Census, the American Community Survey and the Met Council’s own housing surveys (metrocouncil.org/data).

Tracking losses of unsubsidized affordable housing is an inexact science. Rents sometimes rise gradually, so there’s no building sale, public financing or demolition to monitor. But trends are clear.

Minnesota Housing, the state’s housing finance agency, identified the loss of NOAH units — unsubsidized or “naturally-occurring affordable housing” through the sale and improvement of Class C and Class B multifamily properties, and estimated that the seven-county region has lost roughly 1,300 NOAH units annually since 2010.

“We see that in single-family homes too,” Barajas said. “We see that in remodeling and flipping. The market sees those as good investments. They’re readily affordable to pick up, and renovate, and put back on the market at a higher rent.”

In addition to sales, NOAHs also disappear in ways that are harder to piece together, such as gradual rent creep.

“When we compare that loss to affordable rental-unit production over the same time period, it’s a clear net loss,” states the report. “But this example does not take into account other potential losses of affordable rental housing since 2011, like loss of affordability for NOAH units that weren’t sold or rent growth in the region’s single family home rental market.”

The full report is available online at MetroCouncil.org.