The Twin Cities' retreat from fair share housing

When subsidized housing is found concentrated in cities, it's always tempting to assume it happened because exclusionary suburbs refused to build any of their own. But in Minneapolis and Saint Paul, that narrative is ahistorical and incomplete.

For over a decade, the Twin Cities' regional government - the Metropolitan Council - operated an innovative and effective fair share housing program. The program accomplished what few others could, anywhere in the nation: the introduction of large amounts of subsidized housing into the suburbs. And then, it was abandoned. Minnesotans have paid the price ever since.

This critical chapter in the region's history is a significant contributing factor to existing segregation and racial disparities in the Twin Cities. We've written about it at length; here's the short version.

Minnesota's 1972 Land Use Planning Act requires Twin Cities local governments to “provide sufficient existing and new housing to meet the local unit's share of the metropolitan area need for low and moderate income housing,” and empowers the Met Council to coordinate, monitor, and enforce this requirement through the adoption of metro-wide policy plans. The Met Council relied on this law, and other statutory authority, to implement a true “fair share” system in the region.

The system required each local government to accept their regional share of low-income housing, which was specified by the Council itself. The Council also reviewed individual subsidized projects. If cities failed to do their part, they faced the loss of various funding sources, including federal grants, state grants, and parks, sewers, and transportation funding. This was called Policy 13, and later renamed Policy 39.

The fair share system, and Policy 13 in particular, were effective vehicles for ensuring that all socioeconomic groups had access to affordable housing throughout the region. The Met Council's efforts were strikingly successful at instigating the production of subsidized housing in predominantly white suburbs. Previously, the vast majority of the region's subsidized housing development took place in Minneapolis or Saint Paul. But in the 1970s, an unprecedented 73 percent of new Twin Cities subsidized units were produced in comparatively affluent suburban cities instead. This in turn promoted racial and economic integration, and improved low-income families' access to good jobs and good schools.

A remarkable feature of the regional fair share system is how quickly it was accepted by local governments. For instance, one report surveyed local comprehensive plans from the height of the program and found language arguing that it was appropriate to allocate low-income housing at the regional level. The report highlights the following passage from the 1980 plan for the middle-class, predominantly white suburb of Apple Valley:

The need for low and moderate income housing within Apple Valley must be identified on a regional basis because Apple Valley is a suburb within the Minneapolis/Saint Paul Metropolitan area and there is nothing of particular significance within the community that would cause it to stand apart from regional considerations.

Nonetheless, over time, enforcement of the fair share policy and the Land Use Planning Act declined. This was due to a variety of factors, but archival documents suggest the primary source of resistance was not white suburbs (as might be expected) but the central cities of Minneapolis and Saint Paul, which felt shortchanged when housing subsidies were redirected to higher-opportunity areas.

Although the same laws and policies remained on the books, the Council ceased conditioning most funding on housing performance. It also began asserting that its powers to plan, monitor, and enforce housing development were much more limited than its previous actions would indicate. Importantly, this policy shift occurred in the absence of any real change to the underlying legal authorities - whatever powers the Council had historically relied upon were presumptively still operative.

Simultaneously, Minneapolis and Saint Paul sought to recapture the lion's share of funding for subsidized housing. In 1980, the Family Housing Fund, a "quasi-public" entity designed to help round up funding for affordable development, was created jointly by the two cities. Over the next decade, the cities' efforts were rewarded with nearly 10,000 units of Fund-produced housing within their borders. (The organization still exists today and the bulk of its work is still in Minneapolis and Saint Paul.) Later, the two cities were designated housing tax credit "suballocators," ensuring they would have access to minimum annual shares of tax credits.

Production of suburban affordable housing stagnated. After over a decade of rapid progress, the central cities’ share of regional subsidized housing froze. That share has never declined below 55 percent of the regional total, and stands at 60 percent today. Meanwhile, the region's population has continued to suburbanize. As a result, the mismatch between the central cities’ share of total residents and its share of subsidized housing has widened, and is now worse than ever before.

The regional consensus in favor of the fair share system has also suffered. By 1999, the Apple Valley comprehensive plan had stripped language in favor of regional housing planning. The new plan stated, instead, that "the City is in the best position to determine the most responsible option for meeting the future needs of Apple Valley rather than the Metropolitan Council, especially as it relates to residential densities."

Without cooperation from regional leaders, who abandoned a highly effective fair share program in the face of special interests, the Twin Cities today might be one of America's most-integrated places. Instead, it's yet another region moving in the wrong direction altogether.