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Minneapolis’ housing plan rewards developers, punishes working people

Every year for the last five years, City Hall has issued over $1 billion in construction permits, with new luxury developments consistently named in the top five most expensive projects.

Every year for the last five years, City Hall has issued over $1 billion in construction permits, with new luxury developments consistently named in the top five most expensive projects. Wikimedia

Working people in Minneapolis face a housing crisis we didn’t create. Rents are going up, and it’s harder and harder to find an apartment. It’s even worse for women and communities of color.

Fifty-six percent of black or African-American renting households in Minneapolis are cost-burdened (paying more than 30 percent of their income), as are 51 percent of American Indian, Hispanic and Asian renters.

The Minneapolis 2040 Comprehensive Plan won’t solve the crisis. In reality, it simply double’s down on a neoliberal, “let the market handle it” approach that most in City Hall had accepted long ago.

The underlying assumption is that antiquated zoning regulations are blocking developers from solving the problem. By this logic, building more luxury or “market rate” units will prevent displacement, assuming those that can afford high rent will occupy the high-priced units and free up the “naturally occurring affordable housing” for middle, working and low-income tenants.

In reality, building luxury units only invites new investors and wealthy tenants who can afford to pay, but doesn’t address the lack of affordable housing overall.

If this was true, the housing crisis should not be this bad in the first place. Every year for the last five years, City Hall has issued over $1 billion in construction permits, with new luxury developments consistently named in the top five most expensive projects. Yet since 2000, Minneapolis has lost roughly 15,000 affordable housing units. Minneapolis has added 7,000 units in the last two years, yet rents have increased 15 percent, while the vacancy rate dropped from 5 percent to 2.6 percent since 2009.

It’s clear more housing is being built but only for the rich, while the rest of us have to wait for trickle-down affordability.

We’ve already seen what happens when developers are given the keys to the city (they’ve had them all along). The architects of our current housing crisis cannot be relied upon to provide the affordable housing we need simply by rezoning for high density. In reality, zoning policy is a reflection of what’s most profitable for developers. What is currently known as exclusionary zoning was created and pushed forward by developers and investors for profit, not fueled by individuals who wanted to be homeowners.

Our current exclusionary zoning is the culmination of a long legacy of legal and de facto segregation policies, like redlining, that were immensely profitable to corporate developers and real estate investors in the past. Developers and real estate interests consciously confined people of color to specific neighborhoods within the city, generally those with the oldest and most dilapidated housing stock.

Meanwhile, the outskirts of Minneapolis were turned into huge swaths of single-family homes exclusively for white people, a process that eventually reached deeper into the suburbs.

By 1948, 40 percent of all new development in Minneapolis explicitly barred communities of color and Jewish people from purchasing property. At that time, real-estate interests and developers defended exclusionary zoning and segregation because it artificially inflated housing prices and protected the value of their investment. In response to this trend, people organized to demand more investment in non-segregated housing. They were opposed by groups like the Minneapolis Board of Realtors, who defended segregation as the only viable (i.e. profitable) way to build more housing.

Just as profits were made off segregationist housing policies in the past, today’s real estate investors and developers have a lucrative future invested in the shaping of the Comp Plan. We should be sober that they will fight hard, using all their resources, to defend against tenants and communities organizing for rent control, demands to tax developers and build affordable housing, or for a tenants bill of rights. Last fall’s elections showed this, when for-profit developers flooded hundreds of thousands of dollars behind candidates who won’t challenge their influence on City Hall.

The Minneapolis Comp Plan reflects what developers want while giving lip service to renters’ rights. Most of the progress that has been made is the result of grassroots organizing by tenants, under strong opposition from groups that are excited by the Comp Plan, like the Multifamily Housing Association. The Comprehensive Plan offers nothing concrete in the way of protections for tenants in Stephen Frenz and Mahmoud Kahn’s buildings, slumlords with long histories of violations whose names only came to light after renters organized to change things.

Renters’ rights only get vague references in the plan because the assumption is that slumlords exist because renters lack the freedom to move, not lax enforcement, stagnant wages, discriminatory practices, etc. Without renter protections, landlords have all the power to encourage renters to move along by neglecting repairs, threatening rent increases, or evicting people for any number of reasons that could permanently tarnish a rental record. Rent control and public housing are viewed with hostility, since they discourage investment.

The city’s logic amounts to punishing working people by awarding handouts to developers, incentivized by the city to build the housing most profitable for the developers and their investors, while energetically attempting to privatize rather than repair what little public housing still exists (like the Glendale Townhome residents fighting to stay in Prospect Park, many of whom are skeptical of accepting Section 8 vouchers and promises they’ll be able to rebuild community in the suburbs).

The housing crisis also affects homeowners. Most working and middle-class homeowners, especially from communities of color decimated by the subprime mortgage crisis, cannot afford to ‘upzone’ their home into multi-unit buildings. Developers will use the new zoning ordinances to pressure homeowners to sell their properties so they can be ‘flipped’ into multi-unit buildings with higher rents. Instead of more working people in the neighborhood, there will be less, as increasing rental costs will drive up property taxes giving working and middle-class homeowners no choice but to sell. During the 2016 upzoning of East New York, even political establishment figures such as Mayor Bill De Blasio were forced to admit “We don’t have as good a model to protect homeowners that might be the subject of speculation.”

Part of the Comprehensive Plan rightfully focuses on the need for expansion in mass transit, including a “minimum level of development near Metro stations to ensure that land is used efficiently near major transit investments.” But the question becomes from whom and for whom? In Boston, another city with a housing crisis, increased density along transit lines has not meant more affordability. In fact, a 2010 study by Dukakis Center for Urban and Regional Policy at Northeastern University found that 60 percent of neighborhoods with new transit stations saw average income increase and 70 percent of those neighborhoods saw an increase in rent inflation.

The biggest mistake the 2040 Comprehensive Plan makes is further embedding the same free-market principles that created the housing crisis in the first place. First and foremost, we need rent control. Working people can’t wait until 2040 to stabilize skyrocketing rents today.

We also need real protections for tenants. We need tenants unions in every building and a Tenants Bill of Rights that includes policies like sixth-month notifications for any major rent increase, caps on deposits and move-in fees, just-cause eviction and other significant protections for working people. We need a public option to the housing crisis: thousands of high quality, city-owned affordable units paid for by taxing the big developers and super-rich.

Big developers and real estate investors spent lots of money last year to make sure their interests are reflected in City Hall. Their interests are clearly reflected in the current draft of the Minneapolis 2040 Comprehensive Plan, while working people are left with vague assurances.

We can learn from last year, where a movement of working people, led by a coalition of community, faith, and workers’ rights organizations brought enormous pressure on City Hall to raise the minimum wage to $15 an hour. We can put forward a fundamentally different vision for Minneapolis far beyond 2040, based on the needs of ordinary people, not the profit margins of the real-estate market, but we’ll need to get organized to achieve it.

Ginger Jentzen was a 2017 Socialist Alternative candidate for Ward 3 on the Minneapolis City Council and the former executive director of 15 Now Minnesota.