Land Supply
Despite being situated in the middle of the United States with no natural boundaries like oceans or mountains, the largest housing market in Minnesota, the Twin Cities region, has a shortage of available land. This is connected to land use policies aimed at avoiding sprawl. In actuality, it restricts land to the point where raw land costs are the highest in the Midwest.
Opening up land in a smart, reasonable way will protect natural resources and moderate land prices to open up the market for affordably priced starter homes.
Excerpt from Priced Out: The True Cost of Minnesota’s Broken Housing Market.
A review of recent land transactions provided by several land developers shows, quite clearly, developable land for homebuilding outside the Metropolitan Urban Services Area (MUSA) line is far more affordable than similar land within the MUSA.
The per-acre cost of undeveloped residential land inside MUSA can be as much as 13 times more than comparable land outside of MUSA. For example, in Anoka County on the northern border of the MUSA line, consider the communities of Ham Lake (outside of the MUSA) and Blaine (inside of the MUSA). Undeveloped residential land in Ham Lake, based off recent sales, costs $6,250 per acre. Similar land in Blaine, only miles away, can run up to $80,000 per acre, nearly 13 times more.
The Issues
