Industry groups say Minnesota is short more than 100,000 affordable-housing units to meet demand, and project leaders have said the Trump administration's escalating trade war creates more uncertainty in addressing the critical need.

This week, the National Association of Home Builders warned the Trump administration's aggressiveness on tariffs could increase the cost of building a home by more than $9,000.

Cecil Smith of the Minnesota Multi Housing Association said it depends on the situation for each project but acknowledged it is possible. He pointed out it adds to the other market forces affordable housing developers are already dealing with.

"We have a lot of uncertainty in the economy right now," Smith observed. "Tariffs are one factor that's making business very nervous."

Minnesota has invested money to accelerate affordable housing but Smith noted momentum is slow because of higher interest rates and regulatory issues. Lawmakers are trying to fix some of the problems this session.

Local unions said they, too, are monitoring tariffs, noting rising costs could scale back available work. The White House insists its approach will pay off for the economy, while acknowledging short-term challenges.

Leah Midgarden, president of the Southeast Area Labor Council of the AFL-CIO in Rochester, said if tariff effects take hold, losing ground on affordable housing would be a problem for the construction trades. She added when a big project comes together, a range of skilled workers contribute, including in the fields of iron, drywall and plumbing.

"All of these trades provide a really important source of income, not just for their workers but more importantly, these are folks that, again, are living in these communities," Midgarden emphasized. "They are spending those resources in those communities."

She warned if a project is canceled, a worker either has to deal with lost income or bolt to another region where there are construction needs, disrupting their personal life.

Kenneth Bush, CEO of Bush Companies, a development company in Rochester, said if tariff pressure does not ease, it could negatively affect a project he's involved with, aiming to create affordable units for middle-class workers.

"The back-and-forth (of tariff threats), the pulling and tugging, is really not going to work for the people," Bush contended.

North Dakota housing assistance offices helping with rent vouchers and discrimination cases are having to do more with less as federal changes take shape, and they warned additional headwinds are possible.

In recent months, the Trump administration has implemented a flurry of moves dealing with the Department of Housing and Urban Development, including staff reductions in field offices.

Dave Klein, executive director of the Great Plains Housing Authority, said it makes it hard to seek guidance when working with clients on HUD-backed initiatives.

"It does have an impact of when you're trying to do certain things," Klein pointed out. "We can't come up with an answer or get the resources for the landlord and the tenant in a timely fashion, or in a fashion that we used to be able to."

House Republicans and the White House want to cut rental aid, saying money should be shifted to states to reshape their programs. Klein countered it would take time and legislative work, as many people still struggle with rising housing costs. He added some plans could reduce administrative burdens, depending on how they are crafted. The HUD Secretary said existing programs are too "bloated and bureaucratic."

The Trump administration already cut HUD grants to help prevent housing discrimination based on an applicant's sexual orientation or gender identity.

Michelle Rydz, executive director of the High Plains Fair Housing Center, said without the funding, they are in a bind educating LGBTQ+ populations about their rights, including informing them about subtle forms of unfair practices.

"They say discrimination is with a smile and a handshake, so they might get delayed in getting responded to, not shown as many apartments," Rydz explained.

Like Klein, Rydz worries about the long-term future of rental aid, with the White House proposal including a nearly 40% reduction.

"The administration said as they were coming into office that they were going to address the high cost of living," Rydz observed. "But really, looking at the proposals, it looks to me like it's going to only increase housing instability."


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Minnesota's legislative session is hovering around its endpoint and lawmakers found extra room in the budget to expand affordable housing.

Those assisting renters and aspiring homeowners said it helps but the resource gap remains wide. The housing finance bill sent to the governor includes an extra $15 million to support programs keeping people in their homes amid rising costs or create pathways to secure housing. The Legislature was looking to trim spending this session.

Libby Murphy, director of policy for the Minnesota Housing Partnership, was happy to see bipartisanship prevent taking a big step backward.

"One in every four households is getting some type of federal or state rental assistance," Murphy pointed out. "That speaks to the volume of the need. So, we're grateful for these investments. We're grateful that housing did see an increase in spending."

Still, she noted it is disappointing a $75 million increase was whittled down. A March report from the partnership said the state has a housing shortage of nearly 100,000 units. It showed wages have failed to keep pace with housing costs, including for the state's most in-demand workers, such as registered nurses. A program benefiting from new spending focuses on homeownership opportunities for those workers.

Murphy acknowledged this year's investment pales in comparison to the historic $1.3 billion housing package from the 2023 session but added it was an outlier and initiatives from the aid package are still coming together, as expected.

"Things like Bring It Home Rental Assistance, which is a more permanent rental assistance program, that is still getting up and running," Murphy explained. "Other brick and mortar programs, it often takes those resources a few years to get out the door."

Other assistance groups said higher interest rates are getting in the way of some affordable housing projects taking off. Another new investment this year includes boosting grants for rural communities to get started on housing infrastructure, making their communities more attractive to developers.


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Rents in Los Angeles were already high before the firestorm earlier this year, but now a coalition of housing groups is suing six landlords for price gouging.

In California, it is generally illegal to raise rents more than 10% following an emergency declaration, but the nonprofit Strategic Actions for a Just Economy has found many units where advertised rates jumped 25% to almost 50%.

Heeyoung Linda Park, an attorney with the Legal Aid Foundation of Los Angeles, a co-counsel for the plaintiffs, has been watching the activity.

"When they tracked these rental prices, they found hundreds of properties illegally gouging rents, and so there were so many that they eventually had to recruit volunteers to help them track the listings and identify the worst offenders," Park said.

Attempts to reach the defendants for comment were unsuccessful. The first court appearance is scheduled for later this summer. The City of Los Angeles is seeking $62 million in damages in a separate lawsuit against different landlords.

Rodney Leggett, an attorney with the Housing Rights Center, is also a co-counsel for the plaintiffs alongside the Western Center on Law & Poverty and the California Center for Movement Legal Services.

"We find it very exploitive to sort of take advantage of people when they're most desperate, including people who have been displaced as a result of the wildfires," he said.

More than 16,000 structures were destroyed by the Palisades and Eaton fires, adding more pressure to an already-stretched rental market.


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