Ray Dehn: “We’ve Got To Destroy Affordable Housing To Save It”

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.

Brooklyn in the 1970s, after twenty years of “affordable housing” rules.

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:

  1. Linkage Fees: A fee paid by developers on residential, office, and industrial space per square foot of built space.
  2. Luxury Housing Tax: An tax levied on luxury condos and rental units.
  3. 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.

Apartments in NYC in the 1970s. Hey, they were rent-controlled!

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!

The bad news? You can’t evict anyone no matter what they do. The good news? Eventually they leave on their own.

What’s Dehn’s slogan?  “Keep the North Side Decrepit?”

  1. 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.
    1. 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.
    2. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

  1. 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.

Detroit today. NoMi in 20-30 years under Dehn’s policies. SoMi down to the forties not long after that.

I smell a wave of apartment arson coming up.

  1. 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.

  1. 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?

  1. 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?

64 thoughts on “Ray Dehn: “We’ve Got To Destroy Affordable Housing To Save It”

  1. Rick, Cabrini Green was started in 1942, and my dad, who was born in Brookfield the next year, grew up reading complaints exactly like I’m stating in the Tribune and seeing them on the news at WGN.

    Robert Hughes on the matter: Without respect for the body as it is, social memory as it stands, there is no such thing as a workable or humane architecture. And that’s why a place like this – La Defence outside Paris, is experienced by everybody, including those who live in it, as a piece of social scar tissue, gimmicky, condescending alphaville modernism. Stick ‘em in concrete boxes and give them some concrete to play on, and then paint it all bright colours because that’s what the kiddies like, and if the kiddies don’t like it, they can write to the minister!

    Sorry, Rick, kids need somewhere to play that doesn’t require a ten minute elevator ride.

  2. Would the cost of a Paris or New York flat increase or decrease if the high rise housing units were replaced with single family homes? What would happen to the price of housing in their suburbs? There expensive because demand is so high, not because they are tall. Reducing supply would only make them more expensive.

    Lots of people who can not afford to live in Minneapolis are forced to live in the suburbs, which drives up suburban prices. If you increased supply in Minneapolis, prices would fall, attracting suburbanites and reducing housing costs in the suburbs also.

  3. BB: Some high-rise housing is ugly and crime filled. So are some single family homes. Some high-rise housing is the most luxurious an expensive in the world. Some high-rise housing is ordinary middle class. You keep pointing to the first to make the second two illegal. Should we make single family homes illegal because there are a lot of ugly crime filled single family homes?

    Do you really think 10 minute elevator times are routine for modern privately owned buildings? I suspect builders/buyers insist on sufficient elevators to keep wait/travel times, well below that.

  4. Rick, the new One World Trade Center cost–independent of removing the old building–$3.9 billion for 3.5 million square feet, or about $1100/square foot. This is over ten times the going rate for non-luxury single family homes, and no, the entire new WTC is not clad in marble and gold. The original WTC, built without sprinklers or adequate fire insulation, cost the equivalent of about $5.2 billion for its ten million square feet, or ~ $520/square foot.

    Yes, building gets expensive when you’re driving pilings down into bedrock, building massive steel and concrete frames, and using significant amounts of floor space for elevators.

  5. +\-, for false equivalency fallacies go check with your bud eTASS. Between the two if you we definitely have that covered in spades.

  6. BB: If construction was the only cost, you would be right. Multi-unit housing would always be more expensive and rarely/never used. But you can’t build without land. The more people who want to live in an area, the higher the cost of the land. Where high demand drives up land cost, it makes multi-unit construction more affordable by allowing the land cost to be shared across the larger tenant population. Higher construction costs are paid for by lower land costs. In your example, if you built a bunch of single family homes on the One World Trade Center land, the cost of construction would be far lower, but those saving would be lost by just a handful of residents sharing the land cost.

  7. Another false equivalency. Are you not getting it? It is like +/- all over again. I would have thought by now you would have graduated from kindergarten. What is being proposed in MSP is converting one zone into another. Nothing of the sort is happening, can happen, will happen in NYC. Your hypotheticals are garbage because they will never, can ever happen. Am I getting through? And your bringing Paris into the fray just shows your ignorance how cities grew up and what type of houses are actually built in Europe. Have you ever been to Europe, especially central, unbombed Europe? Judging by your arguments, definitely not, especially because you decide to compare MSP to Paris. Are you advocating raising entire city blocks and replacing them by a (that is a singular) housing project?

  8. Regarding Europe, it’s worth noting that the situation is just about exactly the way it is in the U.S. Most people live in buildings of less than six stories, and rich yuppies without kids live in the few extremely tall residential buildings they have–except for a few unfortunates in public projects.

    They knew how to build higher–see castles and churches–but they also did the cost benefit analysis and chose not to. So to point to New York, or Paris, or Munich, or Berlin as an example for why we need mid and high rise projects really ignores how these cities were made and grew.

  9. Actually BB, most families (if they can afford it) live in those 5 and 6 story buildings in Eu city centers such as Paris, Prague, Vienna, St. Petersburg, for example. The reality of the matter, though, these buildings take up a city block and have a courtyard in the middle where kiddies can play. Each building is its own castle, and indeed, these were single family dwellings in the age of kings and queens.

    Again, comparing apples and oranges and dealing in hypotheticals which are not rooted in reality is the stock in trade for your average, non-critical, non-comprehending, non-educated liberal.

  10. One might argue that what you’re talking about, JPA, is the servants moving downstairs after the Habsburgs and Romanovs made themselves scarce, no?

    I personally saw far more examples of simple 3-5 story flats when i was there–some of them a couple of centuries old, many more made in the same basic pattern after the USAAF urban renewal program of 1942-5–but agreed that the “extra” residences of noblemen were a big part as well.

  11. but agreed that the “extra” residences of noblemen were a big part as well.

    And they are located downtown, and that is what Urban utopians all like to emulate. Just look at the architecture, the façade resembles these palaces with stores on the bottom floor and living quarters on the top, but these are not quads and so we are back to apples and oranges. Speaking of façades, it seems that is all liberals care about – appearances, not the substance.

  12. Good point. I’m guessing that I have something of a disadvantage in remembering this because the city I where I spent a lot of time not only had usually just one prince there (it’s a town of about 20000 people), but also since the USAAF Urban Renewal Program hit it especially hard because it’s where Hitler massed his Panzer columns and such during the Battle of the Bulge. Wasn’t much left of Mayen after the clouds lifted, to put it mildly. They’re rebuilt, mostly, but if there were princely residences outside the castle, it’s hard to tell.

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