The History of Homeownership in Minnesota

Knowing our homeownership history could build a better future for homeownership in Minnesota.

Obstacles and roadblocks threaten homeownership opportunities for many Minnesotans. A look at our history shows ow affordability has slowly eroded, and how the growth roadblocks has kept homeownership out of reach for too many Minnesotans.

Minnesota’s housing market has a complicated history. Although our housing market serves many Minnesotans and meets the regulatory goals of government agencies and cities, it fails to reach the goal of homeownership for everyone, everywhere.

1888: Minnesota is growing rapidly, and Minneapolis and St. Paul are becoming major U.S. cities. The first platting of land and permitting of homes is recorded by cities in Minnesota.

1910: Racial covenants emerge as tools used by cities and real estate developers to prevent people of color and certain faith or ethnicities from buying or occupying property.

1930s: The Great Depression and World War II strained the housing market. The homeownership rate dipped to 43% by 1940.

1945-1960: Homeownership surges across the U.S. with a 50% increase in homeownership rate – to 62%. Median home price: $31,500.

1953: The Minnesota Legislature prohibits the use of racially restrictive housing covenants.

1970s: Housing booms – 19.7 million housing units are constructed in the 1970s, a 29% growth in housing supply despite three recessions in the same decade. Demand soared, driven by the first wave of baby boomers – the housing market delivered.

1971-1991: The Minnesota Legislature creates several key resource protection laws: the first state building code, authorization for cities to require land dedications for parks and trails, establishment the Metropolitan Land Planning Act for infrastructure and land use, the state's first energy code, and the Wetlands Conservation Act.

While these new areas of law were broadly supported by the public for their contribution to resource protection throughout the state, they also brought with them unintended consequences. These changes regrettably tipped the delicate balance between affordability and resource protection. Rapidly growing regulatory cost impacts for homeowners building a new home became the norm.

The voice of affordability was either drowned out or absent in these discussions, as was the common-sense balance of resource protection and housing affordability.

1980: Homeownership falls nationally for the first time since the 1930s. Development regulations surge, including park dedication requirements, tree preservation plans, and homeowner funded infrastructure.

Median home price: $105,100

1992: Twin Cities growing suburbs begin using zoning rules to implement growth management plans, often requiring large-home, large-lot developments. These local government mandates widen the homeownership gap. The homeownership rate is 74.6%, and the homeownership gap representing the difference between homeownership rates for non-Hispanic white householders and householders of color is at 35.1%.

2000: New environmental protections for stormwater water management and lead paint removal are introduced. The goals of these regulations are widely supported by Minnesotans, but the execution and management of these regulations further drive housing costs.

Median home price: $200,000

2010s: Minnesota's homeownership rate once again grows, reaching 73%, but not for all. For minority communities the homeownership rate stands at 36%.

Median home price: $150,000

2020s: Minnesota has been underbuilding for over a decade which has led to a shortage of homes for sale. Zoning rules and unnecessary fees have limited builders’ abilities to construct homes at all price points.

Minnesota’s homeownership rate grows to 75.6%. Minnesota’s homeownership gap between white households and households of color sits at 33%. The gap between white and Black homeownership rates rises to 52% — the worst in the country.

The simplest part of the solution is to build more houses in Minnesota — and not just any type of home. We need more affordably priced starter homes that are accessible to Minnesotans currently left out of the housing market.