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Can Minneapolis’s radical rezoning be a national model?

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Here’s what a plan to tackle climate change, density, and affordability looks like

The Minneapolis 2040 plan positions the city as one of the few in the U.S. proposing—and likely passing—a large-scale plan to tackle the pressing problems facing American cities.

Calling the Minneapolis 2040 plan ambitious is an understatement.

The plan, which is expected to pass City Council scrutiny early next month, is the furthest-reaching such proposal from a U.S. municipality, and comes after nearly a year of heated debate. The updated policy would upzone nearly the entire city, which will allow taller buildings with more units to be built in areas that previously only contained single-family homes (at present, more than 75 percent of city residents live in areas that only allow single-family residences or small multifamily housing).

Like the rest of the nation, Minneapolis faces an affordable housing crisis that is expected to get worse. More than half of the city’s residents rent, and half of those renters are cost-burdened. The city has added 83,000 households since 2010, while building just 64,000 new homes, and is expected to welcome another 233,000 households by 2040, according to its Metropolitan Council. With Minneapolis 2040, officials hope to head off the housing shortage, all while showing how land-use policy can address critical climate challenges and the city’s history of racial inequality.

Combined with a proposed $40 million investment in programs that support renters and combat homelessness planned for by recently elected Mayor Jacob Frey, the Minneapolis 2040 plan positions the city as one of the few in the U.S. proposing—and likely passing—a large-scale plan to tackle the pressing problems facing American cities.

“Affordable housing is a right,” Frey has tweeted. “Addressing our housing supply—and shortage—is going to be a key part of realizing that right.”

“Freyplexes” and the future of Minneapolis

The Minneapolis 2040 plan was introduced to the public earlier this year, and aims to attack the city’s housing shortage by increasing density and constructing new housing.

Updated zoning guidelines proposed in the plan would allow triplexes to be built across much of the city—and allow even denser developments in transit zones. The proposal has been dialed down since it was announced earlier this year; initially, the plan called for allowing fourplexes, or what opponents have called “freyplexes,” everywhere.

Perhaps predictably, the plan has been subject to fierce debate. At dozens of open forums about Minneapolis 2040, neighbors have complained that the upzoning would ruin the character of their neighborhoods. Others say the plan is a giveaway to developers and won’t really lower the cost of producing affordable housing. Some activists and YIMBYs feel it doesn’t go far enough in upzoning. The planning office has received more than 11,000 comments.

What all sides of the debate can agree on is the need to tackle the city’s increasing affordable-housing crisis. The problems facing Minneapolis—a rapid increase in the number of new households that hasn’t been met with new housing construction; a 2.2 percent apartment vacancy rate; and a corresponding rise in homelessness—have exacerbated racial and income inequality.

”I’m only a few rent hikes away from being priced out of the neighborhood that I was elected to serve,” Blue Delliquanti, a renter and representative of the city’s South Uptown Neighborhood Association, told Minnesota Public Radio. “We’re facing [a] housing and environmental crisis in Minneapolis, and it’s no longer appropriate to fuss over a neighborhood’s character when new residents aren’t able to stick around long enough to build their own character.”

They are problems nearly every city in the United States currently faces. Austin, Texas, and Portland, Oregon, have also examined large-scale upzoning proposals, while in housing-poor California, a widely heralded bill to mandate transit-oriented development statewide was defeated in the state legislature.

Can Minneapolis be a model for how to break through traditional gridlock when it comes to local limits on the housing supply?

More than 75 percent of Minneapolis residents live in areas zoned for single-family homes.

How Minneapolis 2040 will, or won’t, work

The city’s shortage of affordable units isn’t due to a dry spell for the city’s builders. According to Minnesota Public Radio, the city has issued $5 billion in construction permits over the last five years. But much of that has been for luxury developments. Since 2000, the city has actually lost 15,000 affordable units; while 7,000 such units were added over the last two years, overall rents have increased 15 percent.

Minneapolis 2040 believes the solution is simply more: more construction, more high-rises, and more triplexes. The comprehensive plan update would create new zoning categories across the city. In addition to allowing triplexes, the new rules would allow developers in most residential areas to build four stories high. It would also eliminate off-street parking requirements, which add to the cost of a new project without increasing density.

This update didn’t come out of nowhere; city planners update it every decade. According to Minneapolis’s long-range planning director, Heather Worthington, this year’s update just happens to be more ambitious, seeking to tackle big goals, like climate change, housing choice and affordability, and racial equity.

“We know Minneapolis is facing some of the deepest and most challenging disparities in the nation,” Worthington said during a recent episode of the Streets.MN podcast. “Today’s zoning is built on those old redlining maps.”

In many ways, it’s a market-oriented answer to artificial scarcity: More supply meets demand, brings down housing costs, and allows more workers to live close to jobs and other opportunities.

The updated plan would allow for more construction for the future, while Frey’s plans to invest $40 million in programs to help those suffering from the impact of high housing costs would help expand the safety net today. Initiatives like Stable Homes, Stable Schools, which would support homeless children and teens in Minneapolis Public Schools; a fund to help upgrade existing affordable housing; a tripling of the $6.5 million Affordable Housing Trust Fund; and money for tenant legal advocacy would provide immediate assistance as the changes envisioned by Minneapolis 2040 begin to take shape.

View from an apartment in Minneapolis’s North Loop.

A major change, or just a “meh sandwich”?

While the plan may be a big leap forward compared to what other cities are proposing, many think it doesn’t go far enough, saying that it’s a “meh sandwich” that lacks the ambition to match the scope of the problem. According to advocates from Neighbors for More Neighbors, a YIMBY group pushing for greater density, watering down the upzoning proposal was a step in the wrong direction.

“The much-discussed fourplex proposal was a small step toward ending exclusionary zoning, but even then was a compromise that only went part way toward ending the historical inequities enshrined in the zoning code,” wrote Matt Lewis, a group volunteer.

“If Minneapolis is serious about achieving its climate goals, then enabling more people to live along transit corridors, near daily destinations, in places where living without a car is a realistic choice, is an obvious first step.”

Others have attacked the plan for its “open the market for more density, and affordability will come” mindset. Greater density will replace starter homes with boutique housing, or will simply give developers more opportunity to build high-cost units without truly adding to the supply of affordable housing, they argue. At a community forum about the plan, former city planner Tim Keane said the plan is “a radical social engineering experiment without a shred of empirical data to support its shifting goals.”

The balancing act of better zoning

As the plan nears a final vote in early December—members of the city council will debate and suggest final adjustments to the proposed planning update beginning this week—the feeling that its proponents have of being attacked from all sides will likely get worse. Many council members have discussed introducing changes to further increase density, support transit, mitigate climate change, and reduce racial disparities, including adding an inclusionary zoning policy, which would mandate that every multifamily project include a certain percentage of affordable units.

While these changes may bolster the original goals of the plan update, they may further strain support. Those fearing how upzoning will change neighborhood character, the traditional NIMBY argument, will be further alienated. Environmentalists supportive of density and transit-oriented development are wary changes may alleviate some sprawl, but at the cost of urban parks and green spaces. Local builders have said they would push back against inclusionary zoning, since it may make many planned affordable projects financially impossible. Developer Kelly Doran said the inclusionary zoning proposal would drive up rental costs at his under-construction Expo project by $100 a month.

Changing the direction of a city is, naturally, a balancing act. Minneapolis’s planning department will not meet all its goals with this overhaul, and will likely create additional issues to settle in the future.

But at least the city, unlike many of its peers, is having a substantive debate about density, affordability, and—especially in the wake of the National Climate Assessment last week—the environment.

“We are heading toward the greatest housing problems for low-income people since the Great Depression,” said Alan Arthur, CEO of nonprofit Minneapolis developer Aeon. “It will cost billions in private and public dollars. We just can’t argue policy tweaks.”