Minneapolis Comp Plan Review: Expanding Ownership

A fourplex. (Photo from: Scott Shaffer)

This post is the fourth in a short series that will take a deeper look at some of the specific policies in the Minneapolis 2040 Comprehensive Plan. The city is soliciting feedback on the plan until July 22nd, and it is important that they hear input on the elements of the plan that will help support our goal of homes for everyone.

In Minneapolis, white households are 36% more likely to own their home than households of color. This is a direct result of decades of discriminatory housing policy and institutionalized racism. Redlining and continuing predatory lending practices created racial wealth disparities. We can address this only through clear and specific action.

The question of homeownership also requires looking at what is a home. According to a recent MPR report, one of the lowest prices for a new single family home in the metro area is $327k. This puts new market-rate homes out of reach of people at the metro area’s median income ($73k/year) and lower. More single family homes also requires building out in suburbs, a car-centric pattern of development that exacerbates climate crisis. Meanwhile, in cities, condo construction is a rarity, and the few that do get built are high-end.

The City’s Proposal

Policy 42 proposes to “improve access to homeownership, especially among low-income residents and people of color.” Actions to achieve this and to decrease racial disparities include:

  • Supporting non-profit organizations that provide financial counseling and homebuyer education to build homeownership capacity among low- and moderate-income households, especially households of color;
  • Supporting wealth-building housing models with a particular focus on communities of color, low-income renters and cultural communities;
  • Evaluating programs on how well they serve communities of color, low-income renters and cultural communities;
  • Supporting services that promote post-purchase counseling and foreclosure prevention and other services; and
  • Developing tools to ensure long-term affordability when the city makes investments in housing.

So where does Neighbors for More Neighbors stand?

Considering Other Ownership Options

We must expand ownership opportunities for everyone who wants that. An important step is to rethink how we define an owned home. The “traditional” model is not right for everyone or every situation. We recommend Minneapolis 2040 expand the definition of ownership beyond single-family homes.

A search of the MPLS2040 website reveals zero references to condos as a form of homeownership. A multi-family building resident can be a renter or an owner, and this plan erases thousands of current condo owners. Households are shrinking, our city is aging, and we have little empty land. Condos have to be part of increasing homeownership.

Owner-occupied duplex, triplex, and fourplex homes are a traditional Minneapolis approach. Not just common, these homes have offered many people the income that made homeownership possible. These buildings strengthen communities by providing affordable and family-friendly rental homes. They can increase financial stability, particularly in groups underrepresented in traditional ownership. Owner-occupants also make accountability for quality management easier for neighbors. Finally, small owner-occupied multi-unit buildings are cultivate smaller landlords and entrepreneurs in all communities, limiting the near-monopoly large developers have on creating new homes. The plan needs to include an affordable ownership program with income-producing homes.

Taking A Hard Look at Lending and Education

Expanding the definition of home ownership is not enough. The plan must include condo and income-producing homes in lending and education. FHA loans allow both condos and buildings with up to four units. The Comp Plan should explicitly highlight this tool that supports owner-occupied multi-unit buildings. Ownership counseling should name and address the issues of all types of homes.

There is one more question worth asking: is increasing home ownership the best path to create and more equitably build wealth? Does this approach stigmatize renting in a city that is majority renter? Does it exclude those for whom traditional home ownership is not wanted or not viable? It is important to focus on the goal of building wealth equity and to remain open to any pathway to achieve that goal.

As the draft plan says, “The city can take action to help overcome the legacy of past barriers as well as current barriers in accessing homeownership. These actions are not just investments in filling the financial gap between the cost of a home and what buyer[s] can afford; they are investments in people to help develop the skills and capacity to support homeownership.”

Bridging racial homeownership disparities is vital to a more equitable future. Opening the door to homeownership will require coordinated policy changes, targeted programs, and long-term cooperation to make an impact. Our investments must directly address existing racial disparities. If we also expand our definition of home ownership, change is possible.

What can I do to make this happen?

  • Go to: https://minneapolis2040.com/policies/expand-homeownership/ and comment on the policy discussed in this post!
  • Send this blog post to 3 friends and ask them to comment on it.
  • Talk to your friends and family members (who live in Minneapolis) about why supporting housing for everyone is important, why the comp plan matters, and how to comment on it.
  • Stay tuned for future posts and actions on the draft Comp Plan, and sign up for our mailing list!