Writer: Eleana Teran
2 min read February 2023 – During a recent press conference, Minneapolis Mayor Jacob Frey highlighted the success of the city in creating more affordable housing in comparison to previous years. The accomplishment places the city at the forefront of affordable housing across the state.
“We are producing more affordable housing than we ever have in our city’s history and it isn’t even close,” said Mayor Frey during the press conference. “Currie Commons is one example of many new developments taking place throughout the city that prioritize deeply affordable housing. It’s 187 units ranging from 30% of area median income to 60% of area median income.”
Mayor Frey attributed the progress to a significant investment in affordable housing since he took office, estimating that Minneapolis has spent around $320 million in city and federal funds to support affordable housing since his first budget in 2019. Additionally, he expressed his confidence in these historic numbers, stating that Minneapolis’ data and results would stack up favorably against other cities across the country.
The current administration has prioritized affordable housing for families with an annual income of 30% or less of the median area income. Frey explained that this focus provides a critical resource for those experiencing housing insecurity, creating a necessary “rung on the ladder” to help individuals pull themselves out of homelessness.
Rent increases and stagnant incomes have been a challenge across the country. In 2021, Minneapolis voters approved a ballot measure allowing the City Council to establish rent stabilization policies. A working group recommended a 3% cap on residential rent increases, generating concern among affordable housing developers, advocates and the Mayor, who has indicated he would veto such a policy. Meanwhile, Gov. Tim Walz’s proposal to allocate $1.5 billion over several years to offer subsidies and tax breaks aimed towards affordable housing has been welcomed by developers and advocates alike, but their attention remains focused on the ongoing debate over rent control.
Industry leaders argue that the best ways to produce more housing for underserved communities are to increase housing supply, offer more subsidies and raise wages. Denise Mazone, president of the Minneapolis Area REALTORS®, argues that rent control ordinances would lead to a decrease in housing inventory. “Restricting rent increases will create a bigger inventory problem by discouraging housing providers from entering the market. But even bigger problems than rent control are property tax increases and wages that are not keeping up,” she said in an interview with Invest:. She further emphasized the need to address the 17% to 20% hikes in property taxes rather than implementing rent control policies.
Similarly, Christopher Galler, CEO of the Minnesota Association of REALTORS®, explained to Invest: that the St. Paul Rent Control Ordinance and Minneapolis’ Housing/Rent Stabilization Work Group pose challenges to new construction of affordable rental units in the Twin Cities. “There were plans for two major growth areas with affordable apartments. They have had to put those on hold because the investors behind them are unwilling to enter that marketplace. They are now negotiating with the city, trying to find alternatives,” Galler said.
Dan Collison, director of business development and public affairs at Sherman Associates, emphasized the need for policymakers to adopt a realistic and flexible approach to housing policies that both incentivizes and holds developers accountable. Speaking to Invest:, he explained, “Saint Paul serves as an example of how difficult and messy things can become when elected officials are making decisions without fully recognizing the devastating impact of one-dimensional policy mandates on multi-dimensional market realities.”
Collison stressed the importance of improving housing policies while also addressing constant costs to prevent the erosion of the tax base. He noted, “We’re aware that without effective solutions and a viable model, 87.5% of potential city investment will be wasted.” To prevent such losses, Collison and his team are proactively engaging with policymakers to ensure a steady flow of housing production and affordability.
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