If Ray Dehn is elected Mayor of Minneapolis, he will do for “Affordable Housing” in Minneapolis exactly what sixty years of “progressivism” have done for it in Manhattan and Detroit. Simultaneously.
He released his “affordable housing” plan this week. And it promises to send more Minneapolitans racing for the ‘burbs”.
Guesses as to Part 1 of the plan? Please – Dehn is a “progressive”. It’s got to be “Redistribute Money!”
Increase funding for the Affordable Housing Trust Fund (AHTF): With national- and state-level funding cuts, the city needs a consistent revenue stream to build more affordable housing. As Mayor, I will propose:
- Linkage Fees: A fee paid by developers on residential, office, and industrial space per square foot of built space.
- Luxury Housing Tax: An tax levied on luxury condos and rental units.
- Housing Bond: A city ballot initiative for a housing bond to substantially increase the Affordable Housing Trust Fund. Recently, the cities of Portland and Denver have both voted to approve bonds in the amounts $258 million and $150 million, respectively.
So in a city business community that is already terrible for business, Dehn will add a perverse incentive to move development to the ‘burbs, and push condos elsewhere.
And for what? To ape Portland and Denver – where housing is getting scarcer and less affordable, the more their “progressive” governmetns intervene.
Build affordable housing at every income level: We currently build affordable units at 50% AMI, leaving too many families with nowhere to live in the city. The flight of low-income households to first and second ring suburbs also adds to our transportation crisis, where many remain underserved forced to find new ways to commute to work. By requiring additional units be built at 30% AMI or lower, we can limit displacement.
Thus continuing the city’s policy of warehousing the poor. On the North Side and Phillips, of course. Not Kenwood or Minnehaha Parkway or Nicollet Island. Perish the thought. That’d be too much limiting of displacement.
Implement innovative tax policies like value-capture financing (VCF): VCF distributes the benefits of neighborhood revitalization fairly among all residents, not just landlords by allowing the city to ‘capture’ a portion of the increase in land value. Any increases in property value will be directed into specific funds to be reinvested into the community to fund and preserve affordable housing
Brilliant! Let’s gut the incentive to improve real estate!
What’s Dehn’s slogan? “Keep the North Side Decrepit?”
- End exclusionary zoning and implement equitable zoning practices: Exclusionary zoning is rooted in the legacy of discriminatory practices around housing in our city. It has been utilized as a tool to keep low-income families and POCI out of middle- and upper-class neighborhoods. A solution to increasing density in our city is building more affordable units to foster mixed-income neighborhoods.
- Pass an inclusionary zoning ordinance: This incentivizes developers to build a certain percentage of affordable units in market-rate projects. With the housing gap, it is both fair and appropriate to expect new development to contribute to the solution.
- Re-zone neighborhood interiors: Encourage the development of mid-size construction in neighborhood interiors. We will need to up zone some single-family homes into duplex and triplexes.
In other words, saddle all development with a requirement to build multi-unit housing, market be damned.
- Expand funding for community land trusts: Community land trusts are nonprofit, community-led organizations which purchase land and enter into long-term renewable leases with renters and homeowners. They allow low- and moderate-income people build wealth, and create permanently affordable housing.
Also known as “transferring public money to the city’s DFL political class”. These “non-profits” are the DFL’s graft machine.
Dehn knows where his bread is buttered, anyway.
- Increase funding for limited-equity housing cooperatives: Minneapolis currently has 34 registered housing cooperatives. Limited-equity cooperatives are housing arrangements controlled by the tenants who reside in the building. The resale value of units is limited by the cooperative’s rules to preserve affordability. Currently, the biggest barrier to forming cooperatives is the overhead price. In order to overcome this, we must dedicate funds to assist residents in purchasing a cooperative.
Economics 101: when you force someone to pay something other than what they would on their own, “unintended” consequences are inevitable.
- Implement Tenants’ Right of First Refusal: Requires an owner putting a property on the market to first present the tenant’s with the option to pool their resources and buy the property. The new owners can then either form a cooperative and elect a board of directors, or resell the property on their own timeline.
Yet another bureaucratic hoop to hop through, yet another disincentive to buy, improve and develop rental properties.
- Form a Minneapolis Renters’ Commission: Create a commission comprised of housing advocates and low-income renters. This will be an institutional mechanism for renters to advocate on behalf of their own interests, advise the City Council and Mayor on housing policy, and conduct education and outreach to the city’s renters.
More graft, more DFL sinecures.
- Oppose preemption on rent control: Currently, the state of Minnesota does not allow cities to enact rent control policies. Fighting to change this policy will benefit residents of Minneapolis.
Rent control nearly extinguished the supply of “affordable housing” in all five boroughs of New York.
- Pass a just-cause eviction ordinance: Reduces landlord’s ability to evict residents to certain reasons (e.g failure to pay rent, violating the terms of the lease, etc)
On the one hand, Minneapolis will penalize developers and landlords for improving their property, make it impossible to evict tenants who are destroying or economically dragging the property, and making it harder to sell the damn thing to get the hell out of Minneapolis.
I smell a wave of apartment arson coming up.
- Utilize policies to help residents mitigate and erase eviction records: Nearly 50% of renters in the Northside zipcodes 55411 and 55412 have experienced eviction filing in the past three years, further increasing barriers to renting and homeownership.
In other words, make one of the few tools small landlords have completely useless.
- Enact inclusionary financing models to make housing more environmentally friendly: A mechanism for low-income renters and owners to participate in energy efficiency and clean energy without upfront cost, a loan from the bank, home ownership, or a credit score.
So – warping the model for lending money to borrowers with dubious credit histories?
When has that ever blown up causing immense misery?
- Fight for funding restoration for Minneapolis Public Housing Authority (MPHA): The MPHA is currently operating on a $127 million shortfall, and the U.S. Department of Housing and Urban Development (HUD) under the Trump administration is planning to cut the funding for public housing even deeper.
“We want more graft, and we want taxpayers nationwide to pay for it”.
But let’s set aside the graft for a minute.
In the fifties and sixties, New York City implemented policies that were broadly similar – rent control, gains taxes on development, absurdly bureaucratic eviction processes, yadda yadda.
Rent control meant landlords’ income from existing property was strictly limited. Eviction laws meant that the consequences for skipping rent or trashing property could be delayed for months, sometimes years. Gains taxes were easily absorbed or loopholed by the wealthy, but catastrophic for the small and mid-sized landlord.
As a result, by the seventies Manhattan was unaffordable to the middle class, while entire square miles of Brookliyn, the Bronx and Queens were full of vacant, burned out buildings that had once been actual, affordable housing before the landlords gave up. And as NYC’s fortunes turned around under competent Republican leadership, the gans taxes ensured that only the wealthy could afford to build or improve properties in the formerly distressed neighborhoods.
So today, thanks to “affordable housing efforts” over the past three generations, Manhattan and most of the Bronx, Queens and Brooklyn across the East River from it are unaffordable to anyone that’s not well into six figures, and the poor have to commute in from the Rockaways and New Jersey.
And the polices that have made Detroit, Oakland, Saint Louis, Camden, Newark, Baltimore, Los Angeles and a slew of other cities simultaneously unaffordable to the poor and overflowing with abandoned buildings? Substantially the same.
It’s a series of stupid decisions.
You just know Minneapolis will vote for it, don’t you?