The Twin Cities and suburbs used to share Minnesota’s affordable housing. Then something went wrong.

August 11, 2020 6:00 am
construction workers

Photo by Max Nesterak/Minnesota Reformer.

After three years of silence on the issue, Donald Trump suddenly cares about affordable housing. Several weeks ago, his HUD secretary, Ben Carson, abruptly revoked a key Obama-era civil rights rule, which would require many cities to review housing segregation within their borders and adopt plans for greater racial integration. But that wasn’t subtle enough for Trump. In a transparent attempt to stir up racial resentment in affluent communities, he tweeted that he was “happy to inform all of the people living their Suburban Lifestyle Dream that you will no longer be bothered or financially hurt by having low income housing built in your neighborhood.”

The siting of low-income housing — particularly in the suburbs — has been the source of American civil rights conflict for decades. Because families of color are disproportionately low-income, building subsidized housing units in an affluent place usually has a racially integrative effect, as the new residents are less likely to be white than the existing residents. At times, this has created political backlash — the backlash Trump has recently been attempting to exploit.

But Minnesota has its own unique history with low-income housing. For many years, it operated a “fair share” program with the same basic integrative goals as the Obama rule that was just revoked. That program’s success — and subsequent erosion — provides a timely lesson in the politics of affordable housing. It shows that suburban backlash can be defeated with smart regional policy — but that some interest groups, like developers, are not so easy to overcome.

In the mid-60s, Minnesota created the Metropolitan Council as an overarching regional government. Among the many powers assigned to the Met Council was the ability to set housing allocations for each community under its jurisdiction. In the Council’s early years, it assigned ambitious affordable housing goals to the region’s suburbs. Those goals were enforced with the threat of withheld state and federal funding – not just for housing, but for sewers, parks and other infrastructure.

The effect was transformative: Affordable housing blossomed across the Twin Cities suburbs. In 1970, 90% of the region’s subsidized housing was located in Minneapolis or Saint Paul. By 1979, that share had fallen to 60%. Through the decade, the region built about 70% of new subsidized units in suburban locations. The number of suburbs with subsidized housing also grew dramatically — from 16 of the region’s 189 municipalities, to 97 of them. And the total number of suburban subsidized units skyrocketed from 1,900 to nearly 15,000.

This was change at a speed and on a scale that many today would regard as impossible. Today, it’s commonly believed that suburban affordable housing will inevitably be blocked by “Not In My Backyard” sentiment, or NIMBYism. Neighbors will petition local elected officials or file lawsuits to block nearby projects.

Although some Twin Cities suburbs were doubtlessly reluctant to participate in the Met Council’s fair share system, there is no real evidence that these communities managed to mount any kind of organized resistance against it. A review of the comprehensive plans of Twin Cities suburbs found that many accepted the basic premise of fair share housing; for example, Apple Valley, Inver Grove Heights and Eagan plans all endorsed the Met Council system as the wisest approach.

NIMBYism failed to stop the Council plan on its own, because NIMBYism is — almost by definition — a hyperlocal phenomenon, focused on specific building proposals. Neighbors will band together to stop an individual housing project, but neighbors from across the entire metro area have a harder time working with each other to rewrite high-level housing policy. The Met Council’s regional approach — in which a housing system was implemented across the entire metropolitan area at once — avoided these local pressures.

But over time, the Met Council’s system for building affordable suburban housing fell apart anyway. The fair share goals in affluent suburbs were reduced, and a larger percentage of housing subsidies were redirected to Minneapolis and Saint Paul. If NIMBYs didn’t kill suburban subsidized housing, who did?

Surprisingly, most of the pressure seems not to have come from the suburbs, but the central cities themselves. Throughout the 70s and early 80s, analysts looking at the Met Council system consistently noted that the agency faced strong political pressure from Minneapolis, Saint Paul and the affordable housing industry to walk back the fair share policy. The reason? These groups wanted access to more subsidies and housing resources. As the program’s manager wrote in 1975: “That center city resistance should be the major issues surrounding the plan was surprising to us, but it is certainly understandable. Large and sophisticated housing authorities exist in the cities. . . . They have further relied heavily on subsidized housing to turn over the land cleared through urban renewal.”

Unlike NIMBYs, the central cities — and groups of developers — had no trouble weighing in on regional housing policy and making their voices heard at the Council. Minneapolis and Saint Paul even worked together to create a “quasi-public” organization, the Family Housing Fund, which would recapture affordable housing for the central cities. After a decade of existence, it reported creating over 10,000 units of central city affordable housing. When the federal Low-Income Housing Tax Credit was implemented in the 1980s, Minnesota implemented a system that would assign a mandatory minimum share of the credits to the central cities.

As a result of these pressures and policies, Minneapolis and Saint Paul received far more subsidized units than their share of population — a mismatch that grew worse over time, as the suburban population expanded. As of the mid-2010s, the subsidized housing disparity between the two central cities and the rest of the region was worse than it had been before the Met Council’s fair share policy was even implemented.

Today, the Met Council’s fair share system remains the law — but is mostly ignored. The Council no longer threatens to broadly withhold funding from communities that fail to produce sufficient affordable housing. There is no hint that a transformative push for suburban affordability, like the region experienced in the 1970s, is on anyone’s agenda. As a result, the region’s wealthiest communities remain inaccessible to lower-income Minnesotans.

But the history of the Met Council’s program remains important today. It shows that the usual sources of opposition to suburban low-income housing might not be as strong as they look, but other political forces can conspire to undermine housing integration. Affordable housing isn’t just a place to live. For many people, it’s an important industry.

And while it’s hard to imagine any Democrat rallying suburban resentment the way Trump has, the affordable industry has influence across party lines. Just last week, Joe Biden released a plan to reduce racial disparities in America. Large portions of that plan, like his proposal to “drive additional capital into low-income communities . . . to spur the development of affordable housing” mirror the exact thinking that doomed the Met Council’s successful integration efforts. Good intentions are not enough; if we’re not careful, we might place many suburbs off limits for low-income Americans for yet another generation.

Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.

Will Stancil
Will Stancil

Will Stancil is a research fellow at the University of Minnesota Law School Institute on Metropolitan Opportunity. His work focuses on civil rights law and policy in housing and education.