Equity in Place, Segregation, and the Phillips Neighborhood

A new Institute Report shows that in the Phillips neighborhood of Minneapolis, a $1 billion, “separate but equal,” government-funded strategy failed.

Over the last few decades housing developers have convinced the government and philanthropists to provide them with $1 billion to improve education, public health, and public safety in the Phillips neighborhood in Minneapolis. Phillips includes roughly 7,500 households, and many of its residents are impoverished and unhealthy. Its children have been performing poorly in school and dropping out, and the area has been riddled with high crime rates. In exchange for the $1 billion, developers have provided 42 percent of all Phillips residents with subsidized apartment units, with the promise that these units would improve health and education and reduce crime in the neighborhood. The advocates of this strategy promised that their strategy would work much better than allowing impoverished Phillips’ residents the opportunity to live in more mixed-income neighborhoods.

The public was not aware that new apartments in Phillips would cost one-third more – sometimes twice as much -- as they would in suburban areas, such as Dakota County, or that they would rent for more than the existing market rate apartments in Phillips. The developers, who were overwhelmingly white,  did not hire disadvantaged residents of Phillips or people of color to build their new homes and get good construction jobs. The public did not know that after it paid for the new apartments, the developers and investors would own them outright and could later sell them and thus get paid twice.   

The developers got the $1 billion, but the conditions in Phillips did not improve.  In fact, they got worse. Today, Phillips’ residents have the worst public health in the Twin Cities region, among the lowest performing schools (with only around 10 percent of children competent in math and reading), and the highest violent crime rate in the metropolitan area.

This wasted money could have been better spent on community health clinics, racially and economically diverse magnet schools, after-school programs, and community violence prevention initiatives. It should also have been spent on real affordable housing wherever the residents of Phillips themselves wanted to live, in the context of serious efforts to reduce educational and residential segregation across the Twin Cities metropolitan area.   

The full report can be linked to HERE