On May 22, “Mpls. offering incentives to build houses on vacant lots” highlighted a new program to support the development of housing on 400 city-owned lots, most of which are in north Minneapolis. While I understand the overall goals, I am not convinced this initiative aspires to be more than a “please just come” form of community development that places an overreliance on the private real estate market to advance the public good.
Not everything about the initiative is bad, but it follows in a long history of ceding public resources to the private market in the hope that it will place people over profits or community over capital.
The U.S. has a long history of explicitly racist planning and housing policy that strips communities of color of adequate housing. That’s why it’s essential to note how the city came to own so many vacant lots in the first place.
In north Minneapolis, predatory lending and subprime loans, coupled with the economic downturn, led to one of the highest foreclosure rates in the state, displacing families and stripping away the wealth of thousands of households between 2006 and 2012. The tornado that ripped through north Minneapolis neighborhoods in 2011 further destabilized families and properties. All of this is built on a history of institutional and structural racism that began with the practice of redlining communities of color in the 1930s.
As a side note, the developer in the Star Tribune article who articulates that the foreclosure crisis was the “best thing” to have happened to north Minneapolis obviously hasn’t met any of the families that lost their homes during this time period. But we will leave that for another day.
In nearly every other industrialized nation in the world, governments understand that purely private land markets will not meet the needs of the low- and moderate-income households in their cities. In the U.S., relying on the private market to revitalize a neighborhood is standard practice across the country. Of course, low-wealth communities that have been systematically disinvested from deserve investment, but under our current land use system, upgrading a neighborhood almost always leads to displacement.
Which is why it takes more bold and creative leadership to advance truly equitable neighborhood revitalization in Minneapolis.
At a time when progressive cities across the country are passing ballot measures to significantly increase resources available to fund housing development, Minneapolis seems satisfied with status-quo solutions. Oakland authorized a $600 million general obligation bond to finance infrastructure improvements and affordable housing programs. That city also passed a number of renter protections to ease gentrification pressures. Portland, Ore., authorized a $258 million general obligation bond to finance affordable-housing programs. Eleven cities in Massachusetts established dedicated funds for housing, open space and historic preservation through small tax increases. Baltimore may allocate $40 million toward a community land trust model.
We should be allocating more city dollars to develop housing affordable to low- and moderate-income residents on city-owned vacant lots, and targeting these resources to developers with a demonstrated commitment to delivering strong racial and economic equity outcomes. City dollars should not be used to subsidize private developers who are agnostic about who benefits, either from the jobs created or the housing produced. City dollars should be used to support those traditionally left behind from market-oriented realities.
I know, I know: “We don’t have enough money.” Please. Every day we put city dollars into the things we deem important, like stadiums, bike lanes and downtown development. We need to address the value gap that continues to leave low-wealth communities of color on the margins.
Where would this money come from? If the city of Minneapolis wanted to, it could borrow at historically low rates. The debt would be easily serviced by the money saved from not having to maintain the empty lots ($3,600 per lot per year), plus the increase in property taxes from newly developed parcels. This increase in resources would allow us to produce many more units at an affordable rate, more quickly than the current amount allocated. Also, in order to ensure affordability for low- and moderate-income residents of Minneapolis, the programs should use income restrictions and be indexed to neighborhood median income vs. regional area median income (which is much higher) to ensure that the housing produced would benefit existing residents of these communities.
The work of PRG Inc. is an example of what is possible by putting more resources toward more community-minded developers. In the past few years, PRG has built 48 affordable homes in north Minneapolis with city subsidies, with the median household income of buyers being roughly $50,000. Additionally, 67 percent of the homes were sold to households of color, and 92 percent of the construction contracts went to contractors of color. PRG’s infill development strategy achieved numerous racial-, social- and economic-justice outcomes.
The truth is, we know what works. The question is whether we have the political courage and leadership to actually do it. We should demand more from our leaders, especially City Council members representing north Minneapolis. The path to a just and equitable city is not by using the trickle-down model of equity currently being put forward. Instead, we need leadership willing to uproot injustice where it begins by working to address a history of institutional and systemic racism, rather than simply doing more of the same.
Neeraj Mehta, of north Minneapolis, is director of community programs at the Center for Urban and Regional Affairs at the University of Minnesota.