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Although our weather can be cold and downright inhospitable, we pride ourselves on Minnesota Nice, shorthand for a culture marked by courtesy, kindness, and friendly smiles. Overall, Minnesotans are warm, generous, and giving people. Yet historically, Minnesota has not been welcoming to everyone. Even today, we struggle with the legacy of racism and prejudice toward groups that are not part of the majority. As we celebrate Homeownership Month and LGBTQ+ Pride Month in June, it’s good to look at the progress we’ve made and explore the ways we’re working to make Minnesota a livable, affordable, and inclusive community for all.

What happened to all the affordable homes?
For most people, homeownership is the gateway to the middle class, and the foundation for building multigenerational wealth and security. But for all too many Minnesotans, buying that first home is out of reach, particularly for African Americans and other communities of color. More broadly, the lack of affordable homes impacts our very large population of millennials across all demographic groups. To see the way forward, it’s helpful to understand how we got here.

After the financial crisis of 2008, the historic post-World War II house-building boom finally ended. For the last fifteen years home construction in Minnesota has dramatically declined. At the same time, millennials entered their mid-thirties and began competing for the scarce supply of affordable homes. In the past, the construction industry would have responded by building the kind of starter homes that used to carpet the suburbs. But because of rising labor and material costs, and increasingly stringent local zoning laws and regulations, those homes weren’t built. Instead, developers focused on bigger, higher-end homes on larger lots. Many first-time homebuyers, especially those from communities of color, were frozen out. The home-buying boom before and during the pandemic blossomed into today’s affordability crisis.

Helping first generations buy a home

Our research has shown that the single biggest obstacle for first-generation homebuyers is getting enough money for a downpayment. So, partnering with organizations like the Minnesota Homeownership Center, and Twin Cities Habitat for Humanity, Minnesota Realtors® (MNR) advocated at the Capitol for a statewide First-Generation Homebuyers Downpayment Assistance Fund. Although there are already several downpayment assistance (DPA) programs, the legislation we’re supporting at the Capitol differs in two significant ways:

1. It provides up to 10% of the purchase price—capped at $32,000. It’s a very generous amount that can go beyond the downpayment and cover closing costs, and even some principal reduction.
2. If the buyer stays in the home for just five years, the loan is completely forgiven. By contrast, few if any other DPA loans are forgiven in anything under 20 years.

Make it easier to build affordable homes

On the housing supply side, MNR’s lobbying team is working to support bills in the Legislature that will create more flexible zoning laws and reduce regulations that increase the cost of building homes. We’re also looking at government incentives that encourage builders to produce larger numbers of homes. Additionally, we’re advocating for federal incentives to help build and renovate more affordable dwellings including townhomes and rental housing. For many thousands of Minnesotans, rental units provide the stability they need to house their families, build their careers, and prepare for the ultimate step of homeownership. When they’re ready, programs like the First-Generation Homebuyers DPA Fund, and a larger supply of newly built homes will make it easier for them to fulfill their dreams.

Helping all Minnesotans feel at home

Of course, getting into a home is only half of feeling at home in Minnesota. To achieve that, we must ensure that everyone who lives here is part of the community, no matter their racial, ethnic or religious background, or their gender or sexual orientation. My own diverse family includes two African American children, one child of bi-racial heritage, and one immigrant from Kenya. Additionally, one of my children is transgender. And beyond my immediate nuclear family, I am part of a much larger racially diverse family of relatives and friends. So, I am deeply aware of both the progress that has been made and the disparities that continue to hold people back.

As an industry, we have embraced Fair Housing, and committed to upholding standards of equality, equity, and fair treatment in NAR’s Code of ethics. As individual Realtors®, we can expand our awareness of previously unseen cultural and personal biases by earning an At Home with Diversity (AHWD) designation. Most of all, we must take the time to listen to people who are different from ourselves. Introduce yourself and find out a little something about others’ lives and perspectives. These are small things that can make a big difference over time.

About 20 years ago, when I was still raising my family, my daughter, who herself is of mixed heritage, walked to my real estate office with a group of her school friends. One girl was from the Philippines, and another from Guyana, and another was African American. Together, they were a rainbow of the beautiful human family. It gave me hope for the future, and it still gives me hope today.

There’s a place for all of us here. When we listen to each other, and get to know each other, we can find ways to work together and build homes together—both materially and culturally—and fulfill the true promise of Minnesota Nice.

Pat Paulson
Treasurer
EXIT Realty Metro
Minneapolis, MN