For Renters, Savings are Nearly Impossible

by Camille Galles on 15 November 2014

The difference between renters and homeowners runs deeper than most might think. It’s more than just the differences between an apartment and a house — physical living spaces, and how they are paid for, can manifest themselves in nearly every aspects of a person’s life. Homeowners experience numerous assets that remain quietly unavailable to renters. Programs need to be established so that paying rent doesn’t mean a loss in benefits.

One of largest unspoken benefits of owning a home is the ability to save money and accumulate wealth. Mortgage payments ensure a kind of “forced savings.” Every time a homeowner makes a monthly payment to their lender, a portion of that payment builds equity in the home, which belongs to the homeowner. This is significant — in 2010, home equity made up over 60 percent of African American and Latino households’ net worth. But renters have no easy, built-in savings plan. As the Center for American Progress explains in a recent policy brief: once a rent payment is made, it is never seen again.

The very process of paying rent makes it impossible to accumulate wealth automatically like homeowners do. The Harvard Joint Center for Housing Studies estimates that homeowners have savings cushions 10 times larger than that of renters, and a net worth almost 35 times larger. Besides the lack of an automatic savings plan, many renters are severely cost-burdened in the first place. Half of renters pay more than 30 percent of their income on rent. Paying rent often takes precedence over other needs, such as food, healthcare, and clothing. Renters don’t have as the flexibility of homeowners to make investments to reduce utility or laundry bills, either. The nature of rental units means that in the case of expensive laundry, poor insulation or faulty appliances, renters face a constant cost increase. These financial barriers prevent many renters from entering the middle-class status that many homeowners enjoy.

Minnesota doesn’t have an explicit renter savings program, but the Minnesota Renter’s Credit provides a statewide tax refund to low- and moderate-income families whose property taxes are disproportionately high compared to their incomes. Rent is another factor that families don’t have much control over. In 2012, more than 305,000 Minnesotans received credits averaging around $581.

The problem is that many renters, including HOMEline’s clients, end up spending that Renter’s Credit on desperately needed food or medicine instead of saving or investing it. So this isn’t a very effective savings tool. The Center for American progress advocates for automatic, user-friendly, matching-savings programs, and these standards are absolutely necessary to begin growing renters’ wealth.  But savings don’t do renters much good if they can’t afford to buy food.

In order to give renters the benefits that homeowners automatically receive, both short-term and long-term financial needs must be accounted for. This will require creative, flexible and multi-approach policy solutions. For example, Minnesota Renter’s Credit could still provide rebate dollars along with modifications or an option for a savings plan. In order to build the middle class, policymakers must focus on making sure renters receive homeowner benefits. Those benefits are structurally impossible for renters to acquire, and will remain so unless action is taken.


How do you know who to vote for?

by Tracey Goodrich on 23 October 2014

There are a number of debates and candidate forums around the state. If rental housing and landlord-tenant law is an issue for you, consider writing in to candidates’ campaign offices or ask a housing question at a candidate forum in your area. In the final weeks leading up to the election, there is a lot happening to assist voters in figuring out who to vote for. Nick Cotta, another one of HOME Line’s amazing intern staff members, compiled a list of up and coming forums around the state. The list is in order by city. Be sure to check back for updates, or feel free to comment if you would like to add to the list!

To find out what district you currently live in, or who is representing you, visit the Minnesota District Finder.

Candidate Forums Around the State







  • Secretary of State Debate taping on Saturday, October 25, 2014 – KSTP Studios. The debate is scheduled to appear on KSTC45, the KSTP digital channels and online at Check local listings and the KSTP website for the schedule.


  • School Board-at-large Candidate Forum, October 29th at 4:30PM at Waite House 2323 11th Ave S Minneapolis, MN 55404. Participating candidates include Iris Altamirano, Rebecca Gagnon, Ira Jourdain, and Don Samuels.
  • Secretary of State Candidate Forum,  October 28, 2014 from 7:00PM-9:00PM at Augsburg College (Foss Center)2211 Riverside Ave, Minneapolis, MN, 55454.  Hosted by the League of Women Voters Council, featuring candidates Bob Helland (I), Bob Odden (L), Dan Severson (R) and Steve Simon (DFL)


Northfield City Hall, City Council Chambers, 801 Washington Street, Northfield, MN 55057

Thursday, October 23rd 

  • City Council At Large, 6:00 PM, candidates Dale Gehring & Rhonda Pownell
  • City Council Ward 1, 7:15 PM , candidates Joe Gasior & Suzie Nakasian

Saturday, October 25th

  • 9:00 amSchool Board
  • Fritz Bogott, Margaret Colangelo, Julie Pritchard & Jeff Quinnell
  • 10:30 amRice County Attorney
  • Paul Beaumaster & John Fossum
  • 12:30 pm2nd Congressional District
  • Michael Obermueller & Paula Overby



  • The Legislative Action Coalition for Robbinsdale Area Schools is hosting a candidate forum for those running for seats in the Minnesota House and Senate that represent any part of the Robbinsdale Area Schools. 



  • Minnesota House Districts 14-A and 14-B,  October 29, 2014 from 7:00PM-8:30PM, at City of St. Cloud City Chambers  





Review of October 6th Candidate Forums:


Including Renters Brings Stability, Not Transience

October 22, 2014

When Ross Joy, lead organizer of the Corcoran Neighborhood Organization, first began doorknocking apartments, nobody knew who he was. The renters he spoke to had no idea that such a group existed. Many didn’t even recognize “Corcoran” as the name of their neighborhood. Despite making up nearly 50 percent of the Minneapolis population, renters remain […]

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Equal Funding Doesn’t Mean Equal Results: A Critical Look at MHFA’s Affordable Housing Plan

September 9, 2014

This August, the Minnesota Housing Finance Agency (MHFA) released a draft of its 2015 Affordable Housing Plan, which outlines MHFA’s spending goals, projections, and strategies for the upcoming year.  MHFA is one of the largest and most important agencies working to finance affordable housing for low and moderate-income Minnesotans—its $947 million budget is projected to […]

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Rise of the Renter Part 3: What’s Next for Federal Housing Policy

August 22, 2014

Housing policy currently favors high-income homeowners, but recent initiatives have begun to recognize the needs of the growing renter population. One of the biggest problems facing the affordable housing community is the lack of available funding. In the next two blog posts, we’ll discuss promising ideas regarding increasing funding (federal policy) and distributing those funds […]

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The Rise of the Renter: Part 2

August 6, 2014

In Minnesota, and throughout the United States, the renter population continues to rise. .  For an increasing number of families, “home” is found in a rental or low-income-housing unit instead of a traditional, mortgage-financed house.  But housing policy in the United States continues to disproportionately favor homeownership.  Renters make up more than a third of […]

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The Rise of the Renter: Part 1

July 27, 2014

This week kicks off a three part blog series examining the rise of the renter–not only throughout Minnesota, but across the nation.  Why are so many people seeking rental housing, and why does it matter?  What has (or hasn’t!) the government done to aid renters?  And lastly, how do we move forward?  What is the […]

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The Livability of Minnesota’s New Minimum Wage

July 20, 2014

  On April 15th 2014, Minnesota Governor Mark Dayton signed a bill that officially increases the state’s minimum wage.  Although the wage increase is a government mandate, workers will not see their paychecks grow overnight.  Rather than automatically spiking, the wage increase will be slowly phased in.  Gradual increases over two years will result in a […]

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$100 Million for Affordable Housing: Where It Comes From, Where It Goes

July 6, 2014

Welcome back to Homeline’s Public Policy blog!  Check back often as we begin to cover important Minnesota housing bills that were passed during the 2014 legislative session.  We’ll start by breaking down the “Homes for All” bonding bill, which sets aside  $100 million for affordable housing projects. Where does this money come from?  The term […]

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Whose business is housing?

September 25, 2013

Created by OnlineMBA  recently shared this video contrasting how businesses and governments operate and interact with people they serve. Please take a moment to view the video—and return to read how this discussion relates to housing, and in particular, the dynamics of tenant/landlord interactions. If you look at MHP’s most recent 2 x 4 […]

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