If you’re a property owner or landlord in Minnesota, the recent wave of closures among affordable housing providers should raise some serious red flags—and offer some valuable lessons.

A recent MinnPost article highlights how rising operational costs are forcing even experienced housing nonprofits to shut down buildings. Alliance Housing, for example, had to close a 27-unit transitional property in Minneapolis because annual losses ballooned to $250,000 by 2024. Despite having a long track record of success, the organization simply couldn’t keep up with skyrocketing insurance, maintenance, and staffing costs.

This scenario is becoming increasingly common across the state. According to the Distressed Property Data Project, over 26,000 affordable units in Minnesota experienced a combined cash flow decline of nearly $50 million between 2018 and 2023. For many landlords—especially those with older buildings or serving lower-income tenants—these losses are unsustainable.

Why This Matters to You

Even if you’re not in the affordable housing business, these trends affect your bottom line:

• Increased Pressure on Market-Rate Rentals: As affordable units disappear, demand for market-rate units may rise—but so will tenant instability and default risk.

• Policy Shifts Are Coming: Lawmakers are exploring interventions, including new funding programs and stricter regulations. Being informed helps you stay ahead of compliance and investment opportunities.

• Potential Support on the Horizon: New legislation could offer relief through preservation funding, insurance reform, or tax incentives—but landlords must be engaged in the conversation to benefit.

Takeaway for Minnesota Landlords

Now is the time to assess the long-term sustainability of your properties. Whether you manage affordable units or not, understanding the forces at play—rising costs, policy shifts, and tenant instability—can help you adapt and thrive.

Stay informed, stay involved, and don’t overlook the potential to partner with public programs or nonprofits to make your properties more resilient.

Read the full article: Minnesota housing providers struggle to keep up with costs, forcing closure of some buildings – MinnPost