Minneapolis’ contentious housing policy continues to draw national attention

CATHY WURZER: We're going to talk about Minneapolis housing policy right now. It's drawn national attention even as it sits in limbo. A recent study by the Pew Charitable Trusts found that zoning changes over the last 15 years helped the city keep up with demand for housing and keep rent down, at least compared to other cities.

Those zoning changes include what's known as the 2040 Plan, which made the city the first in the nation to end single family zoning. That is until a judge put the plan on hold last fall. We're going to hear more about that court case in just a moment. First, Alex Horowitz is on the line. He's a project director with Pew's Housing Policy Initiative who worked on the study. Welcome, Alex.

ALEX HOROWITZ: Hey, thanks. Glad to be here.

CATHY WURZER: Thanks for being here. So your report indicates that overly restrictive housing zoning codes leads to housing shortages and higher costs for consumers. Minneapolis rethought its land use policies. And your report mentions four housing policies that have allowed Minneapolis to expand the amount of housing. Now, we don't have time to go through all four in depth, but which have been the bigger game changers?

ALEX HOROWITZ: Sure. The policy that got the most attention was allowing two and three units per lot. But we see that the two policies which made the biggest difference in unlocking housing in Minneapolis were eliminating parking minimums and encouraging apartments on commercial corridors and near transit. That made them easier to build. And with all the new supply, affordability improved.

CATHY WURZER: Limiting parking requirements. Interesting. Why that?

ALEX HOROWITZ: Parking is expensive. Each below grade spot costs around $50,000 typically. And parking requirements often limit how many apartments a builder can build. That's even though some households don't have cars and some would rather park somewhere else that costs less.

CATHY WURZER: So what's been the impact on rents and the rates of homelessness?

ALEX HOROWITZ: So we see that Minneapolis has sharply improved housing affordability by allowing new apartments. So during the five year time period that we looked at, 2017 to 2022, rents went up about 30% in the US. They went up 14% in Minnesota. But they only went up 1% in Minneapolis.

CATHY WURZER: So I wonder, if the 2040 Plan ends up being repealed or delayed further, any ideas as to what could be the effect on housing availability and rents in Minneapolis in the future?

ALEX HOROWITZ: So the 2040 Plan made it easier to build homes. And builders responded. So it clearly improved housing affordability by enabling more apartments. If those homes can't come online, then we would expect to see housing affordability get worse in Minneapolis.

CATHY WURZER: And we should say Minneapolis was the first American city to end single family zoning with the passage of the 2040 Plan. So when you look at the plan and what's happening in Minneapolis, it looks like a success story, right? Any other cities enacting similar policies?

ALEX HOROWITZ: Yeah. Many cities are starting to realize the success that Minneapolis has had. And so we do see other cities doing some of the same-- enacting some of the same reforms. So we're seeing Cities like Austin, Texas and Charlotte, North Carolina allow three homes per lot. We're seeing cities start to eliminate parking minimums the way that Minneapolis has and make other changes to make it easier to build housing, especially apartments near commerce and near transit.

CATHY WURZER: What do you hope that officials do with this report?

ALEX HOROWITZ: So officials around the country are looking to see how to improve housing affordability, how to reduce homelessness. And even though homelessness rose 14% in Minnesota, from 2017 to 2022, it dropped 12% in Minneapolis because housing affordability improved. So we see officials passing laws to allow apartments in commercial areas and with bipartisan majorities in California, in Florida, in Montana. Those types of law changes are a strong step in the right direction to improve housing affordability and enable people to live near the places where they go every day.

CATHY WURZER: All right. Alex Horowitz, thank you so much.

ALEX HOROWITZ: Thanks so much.

CATHY WURZER: Alex is a project director with the Pew Charitable Trusts Housing Policy Initiative. The next step in the court battle over that 2040 Plan, by the way, will happen February 21. The Minnesota Court of Appeals is hearing oral arguments in a lawsuit filed by a set of environmental groups. Multiple courts have found that Minneapolis should have first conducted an environmental study to explore the potential harm of increased density to natural resources and wildlife. Journalist Jerusalem Demsas writes about this in a recent article in The Atlantic. And she is with us. Jerusalem, welcome.

JERUSALEM DEMSAS: Hi. Thanks for having me.

CATHY WURZER: A pleasure. Thank you so much. So we just heard some evidence that the 2040 Plan has helped hold down rents in Minneapolis. But in your article, you write that this debate won't be won by stats, statistics. What's at play here? What else is at play here?

JERUSALEM DEMSAS: Yeah. I think the big thing to understand is that there are people who call themselves environmentalists on both sides of this debate. There are folks who are involved in the litigation. And then many environmental groups and environmental advocates are strongly in favor of Minneapolis 2040. And I think that it's indisputable what the previous researcher was telling us about, that increased housing, both helps for housing affordability, but it also is good for the environment.

When you push homes to be in dense urban corridors, when you make sure new housing is funneled towards places where people can opt to take transit, ride bikes, or even take shorter car drives, that is beneficial to the environment. And there's been several studies on this, including one that showed that the most important thing any city can do to fight climate change is to promote dense urban construction of housing.

And so the big fight that's going on here is there are a lot of people who disagree. They think that if there are costs to the environment to build this much housing locally, but the real problem is that there often isn't a larger consideration of the bigger picture here. If you don't build housing in Minneapolis, then that housing is going to be built in suburban areas and kind of further a lot of the things that we think of when we think about the climate collapse.

CATHY WURZER: In the article, you describe a divide in environmentalism between crisis greens and cautious greens. Can you talk a little bit more about that?

JERUSALEM DEMSAS: Sure. Yeah. So crisis greens, I think, are the ones that were-- I would consider myself a part of this group. These are folks who maybe are younger, grew up when climate change, the concerns about carbon emissions is the primary concern facing the planet. When we're worried the most about making sure that there are fewer greenhouse gas emissions, we want the government to be involved in and engaged in taking big, bold policy steps to reduce our reliance on fossil fuels.

And then there's an older version of environmentalism, which I think is shaped more in the post-war era. These are the cautious environmentalists. And these folks kind of grew up in a time when environmentalism was a much more varied ideology. It was an ideology that cared about not just the climate crisis, but also about the green spaces around them. They want to have lawns and want to preserve conservation matters that are outside of whether or not that affects the climate when it comes to the climate crisis.

And so for them, that's an age of environmentalism, the cautious environmentalists are coming at a time where they're very skeptical of government engagement. They're skeptical of big government action coming in and pushing forward development of any kind. And this is something I've seen not just in Minneapolis, but across the country. And it's not just with housing, but with solar farms or with wind farms. There are folks who have been lifelong environmentalists who find themselves opposed to these kinds of projects. And it is something where we're seeing the environmental movement really evolving towards a crisis version of itself as it realizes that there are severe costs to inaction.

CATHY WURZER: You wrote that the Minneapolis Audubon chapter stood out to you mostly over other environmental groups in this debate. They were originally part of the lawsuit. But then they withdrew. So what do you take away from their part in the story?

JERUSALEM DEMSAS: What I take away is that you can kind of see the way that the environmental movement is changing. The Audubon Society, the local Audubon chapter, was a part of the lawsuit. And they were kind of the only longstanding environmental group that was a part of this lawsuit. The other two groups were newly formed chapters. Well, Smart Growth Minneapolis is a newly formed chapter created to sue over Minneapolis 2040. And the other bird group is a very small group that does not have as much kind of name recognition.

And so Audubon's decision to remove itself really sent a signal about whether environmental groups were really going to stand on the side of opposing Minneapolis 2040. And what I really learned from them, and they really stood out to me, is that you can kind of see that people are really changing their minds and organizations are really changing their stances on this.

Just 10 or 20 years ago, most groups that referred to themselves as environmentalists would not really be advocating for more development of housing or more development even of large scale solar projects or wind projects. That just wasn't the way that environmentalism really functioned. But now we're seeing as the climate crisis becomes really centrally located at the heart of what is important-- we see this with Joe Biden and the large climate investments that he's been making-- that that's kind of the center of gravity now in the environmental debate. And people are shifting over.

CATHY WURZER: All right. Jerusalem, I wish I had more time. Thank you so much for your time.

JERUSALEM DEMSAS: Yes. Thank you so much.

CATHY WURZER: Jerusalem Demsas is a staff writer for The Atlantic. By the way, the Minnesota Court of Appeals will hear oral arguments on the lawsuit over the 2040 Plan February 21. Now, you may remember our first guest mentioned the importance of parking restrictions in the Minneapolis plan. Earlier today, DFL State Senator Omar Fateh and a group of advocates unveiled the People Over Parking proposal that would prohibit cities from making their own decisions about the parking needs in their communities. Advocates say it would increase housing affordability by eliminating minimum parking mandates statewide.