Creating an inclusionary housing policy could help the city of Rochester and Olmsted County encourage affordable housing development in the region, but both local government bodies are hesitant to move forward before further studying the effects of such a policy.
The Rochester City Council, Olmsted County Board of Commissioners, staffs of each agency and outside experts gathered in a joint session Monday to discuss the need for affordable housing and the progress of local efforts to meet that need.
The latest reports indicate Rochester has already fallen behind in the fight to curb affordable housing need. To incentivize private developers to create about 4,500 units of affordable housing in the next 5 years, Rochester would need to capture a huge portion of funding from outside agencies, including the state of Minnesota and the Greater Minnesota Housing Fund.
“In essence, in order to meet 100 percent of the need, you would need more money than what is available,” said John Errigo, a syndication officer with the housing fund.
To meet even a portion of the forecast need for affordable housing, the city and county would need to address several issues, Errigo said:
• Average market rent for housing units is unaffordable for about 60 percent of area renters.
• Vacancy rates are extremely low at about 1 percent.
• The vast majority — about 89 percent — of all new units entering the housing market are market rate, above affordable housing standards.