A Minnesota Senate committee will take up a proposal on Friday to grant $45 million to the Minneapolis Public Housing Authority to fix up hundreds of houses that the agency rents to some of the city’s lowest-income families.
Most of the families with children that MPHA serves live in one of these 700 “scattered site” family homes — which, as the name implies, are spread out all over Minneapolis.
With rent in these houses set at approximately 30% of household income, MPHA leaders say the “deeply affordable” units help stabilize vulnerable families. The agency’s research suggests most residents use these houses as launch-pads to get better-paying jobs — and nearly one out of every five families that leave these units go on to purchase homes of their own.
But more than half of these houses are in “poor” condition, according to MPHA’s ratings, with a backlog of more than $31 million in needed maintenance and repairs: roofs that leak, siding that’s deteriorating, furnaces or ventilation systems that need to be replaced. If unaddressed, the agency believes the cost to fix these problems would double over the next five years.
That’s why MPHA leaders want a cut of the state’s multi-billion dollar budget surplus: They want to slash through repairs on these homes — and knock out a significant chunk of an overall $210 million maintenance backlog on all of its properties.
Abdi Warsame, who stepped down from the Minneapolis City Council in 2020 to become MPHA’s executive director and CEO, sat down with MinnPost to discuss why he believes the agency urgently needs this one-time infusion of funding. We’ve edited his answers for length and clarity.
MinnPost: Let’s start with your background. Your entry-point into Minneapolis politics was as the director of the tenants’ association at Riverside Plaza, the iconic subsidized housing complex in Cedar-Riverside. How does that experience inform the work you do now?
Warsame: My work currently at the Housing Authority is people-centric. Residents come first. We look for quality and integrity in the way we deal with our residents. We try to design everything that we do in order to make sure that we’re serving them and we serve in our mission.
That came about defending the tenants in Riverside Plaza and making sure that their issues were addressed and their concerns were met. So I think that I came with that focus on what I call the three P’s — people, preservation and production — when I came over to MPHA.
MP: Riverside Plaza isn’t part of the Minneapolis Public Housing Authority’s portfolio, right?
Warsame: Right, but they have the same kind of population and same demographics that we serve at MPHA.
I learn something new every day. The job is challenging and rewarding. It’s a great honor. And, you know, it starts with constantly learning, and I think that’s good for me and it’s good for the leadership of the agency.
MP: Who are the people who use MPHA’s services? What does a prototypical user look like?
Warsame: We roughly serve about 5% of the city’s population on any given night. MPHA programs put a roof over 26,000 individuals and families. We’re probably the largest landlord in the state. I see MPHA as a key infrastructure of the city of Minneapolis, like the parks in the streets and so on — especially since we have a housing crisis in our city and our region.
In our scattered site housing portfolio, most of our users (55%) are children. The majority are people of color. The majority are Black families (87%), with female heads-of-household (85%).
MP: You’re asking the state Legislature for a $45 million, one-time capital investment this year — which is why we’re talking today. Before we talk about your request, let’s take a step back: How would you rate MPHA’s financial stability? Can MPHA sustain and fund its own operations at this moment?
Warsame: MPHA is one of the top-performing housing authorities in the country. We have 98% occupancy. We offer a large percentage of the deeply affordable housing in the city of Minneapolis and in the region.
However, we have challenges — and one of the biggest is the decades-long de-investment in public housing by the federal government and lack of attention from local government. This has compounded the issues all providers of deeply affordable housing face.
Our family housing portfolio could be sustainable with the income that we’re getting right now. The challenge is how do we overcome those 30 years or so of de-investment? How do we overcome the capital backlog of unmet maintenance and repair needs? That’s why we’re going to the state to ask them for that one-time, cash infusion that will help us overcome the capital backlog and put us on the path of sustainability.
MP: You listed several agencies that have ‘de-invested’ in public housing — let’s start with the federal government. What actually happened? Why did all those federal dollars dry up?
Warsame: We exist for the city of Minneapolis, but the funding comes from the U.S. Department of Housing and Urban Development (HUD). Historically, when the Housing Act was passed back in the 1930s, it was the role of the federal government to fund public housing authorities — but it was the role of the local governments to create them and maintain them.
The federal government did not keep the promises that they made historically to fund housing authorities. Over the last 30 years, we’ve got roughly 10 cents for every dollar that we need to meet our capital needs.
We’ve come a long way in terms of elected officials and leaders recognizing the need for a remedy. Especially after George Floyd and some of the soul-searching that was done, there’s been a lot of positive energy that we can sense right now. And that’s the reason why we’re going to the state right now. We’re a rich state, we’re a rich country, we’re a rich city, and yet we’re not able to take care of the most vulnerable people. It’s high time that local government and the federal government step up and ensure that we preserve this key infrastructure for decades to come.
MP: You also mentioned local disinvestment as an issue. Does the city of Minneapolis play much of a role in funding your agency?
Warsame: There hasn’t been much of a direct, consistent and reliable investment — for a long time, this program was seen as a federal responsibility. That’s not true anymore. There is a responsibility for the city to participate in in helping address some of the challenges MPHA is facing.
MP: What about the state’s investment?
Warsame: Same issue. Our challenge is in telling the story of how successful we’ve been at taking care of this population. We serve a vulnerable population — seniors on fixed incomes, a large number of folks with disabilities, families that are struggling — and we can’t do it alone.
It should take the city, the county, the state and the federal government — and also private corporations — to support the work that we do, because you can not replicate what MPHA does.
MP: What does the public get out of the investment of a $45 million investment in MPHA?
Warsame: It gets the preservation of the largest family housing portfolio serving people of color anywhere in the state of Minnesota — 700-plus homes — for the foreseeable future. This, in a time where the city of Minneapolis is becoming unaffordable for working class families and families of color.
If we were to lose this precious infrastructure, it would cost more than $45 million — maybe 10 times more — to help those families. The state has a [$17.5 billion] surplus. This cash infusion to MPHA will go a long way to serving these families, taking more off the waiting list, and give us the ability to take care of other priorities as well.
In fact, if we take care of the capital backlog, we can borrow off this portfolio of 700 homes and actually get private dollars into the agency in order to add new units and tackle other priorities, like recalibrating some of our high rises, like what we did at Elliot Twins. (Editor’s note: Without getting too deep in the weeds here, agency staff explained that MPHA envisions taking out a loan “based on projected revenues created by future federal subsidies.”)
A $45 million cash infusion also would give us a lot of flexibility because if we take care of the capital backlog, we free up more resources because our operating costs will come down. That means 3,100 individuals get better housing with better amenities and more security.
MP: What kind of amenities?
Warsame: Everything. Better roofs, better siding, better infrastructure, better kitchens, better heating and air conditioning systems. We have studied these units and made a laundry list of needs and issues that need to be addressed. It’s a complete overhaul and a complete rehab that will sustain these units for decades to come. For $45 million, you will get a lot of work done.
MP: Recently, MPHA has been converting some of its single-family homes into four- or six-unit apartment buildings. The money you’re requesting from the Legislature would not be used for that?
Warsame: No. What you’re talking about is adding new housing — and we will continue doing that work, identifying units that need to be upzoned. That’s important work, but preservation is also very important. The $45 million would help us preserve what we have.
Preservation of these single-family units is very important for several reasons. One, this portfolio integrates families into the neighborhoods that they live in. You can’t really tell the difference between our homes and their neighbors. Two, the fact that the homes are scattered around the city means we’re not concentrating poverty in one place. These families can send their kids to good schools and be part of the fabric of the neighborhoods, and that’s why we chose them to kind of focus on.
We know this program works; it’s the type of program everybody in the city has been talking about for a long time: How do you address racial inequality? How do you address historic issues with housing? And how do you actually even help families of color become homeowners? Our estimates show that from 2020 through 2022, of the families that left our scattered sites, 17% of them became homeowners.
That’s encouraging — and that’s what we want to continue replicating.
MP: What is it about the single-family home portfolio that you think encourages that?
Warsame: I think it gives families an opportunity to find their feet. As somebody who was a child refugee, who was raised by a single mother who grew up in public housing in the U.K., I know what that kind of housing means to families like mine. It gives us time and space to develop, to be better educated, get better jobs — because at least you have a roof over your head. I think that’s what works for these families as well.
MP: In October 2020, MPHA sold these 700-plus single-family homes to a separate nonprofit organization that MPHA wholly controls and operates. Basically, you sold these buildings to yourself. Can you explain why you did this?
Warsame: Because we get paid two-and-a-half times more to run the same units! Because of this conversion, we get more resources, and we’re able to put more money back into those properties — and, by the way, put together this kind of proposal for the state Legislature.
MP: That’s wild — a little piece of bureaucratic magic lets you more-than double your revenue? Why is that?
The conversion takes these scattered housing sites out of the Section 9 of the federal housing law (which public housing agencies use to fund these “deeply affordable” units) and into Section 8 (the program most people associate with housing vouchers).
The Section 8 program has a larger political constituency, because it has both public housing entities like MPHA as well as private landlords in the same platform — so when you need to lobby legislators, Section 8 has a larger voice because you can you bring all these outsiders. So this is a national trend.
There’s an adage, ‘It doesn’t matter if a cat is black or white. All that matters is it catches mice.’ To me, it doesn’t really matter the tools as long as we’re meeting our mission, we’re serving the same folks and we keep to our promises, and we’ve done that.
MP: When MPHA shifted all of this housing to the nonprofit, advocates at the Defend Glendale & Public Housing Coalition warned that the conversion of public housing to private ownership would jeopardize tenants’ rights. Since this is the program you’re proposing the state inject money into… Do tenants lose protections when they’re no longer technically under the purview of a public entity, as they are in these homes?
Warsame: Those concerns are unfounded. Our experience shows that the same families are living there. The same entity, MPHA, is still serving those families and still managing those properties. We haven’t had any displacement of families throughout the program.
MP: No displacement?
Warsame: We haven’t had any displacement at these sites, or at the two huge conversions done at Elliot — there were was outcry there, and when there is change, people have concerns.
MP: You say this conversion that increased MPHA’s subsidy is a national trend — but what if the federal government changes the rules so that public housing shifted to nonprofits doesn’t get that same subsidy in the future? What if the federal government thinks of this as a loophole that needs to be closed?
Warsame: We can only go by history, and we know that the Section 8 platform has always been funded. There hasn’t been a time when it hasn’t. If we go by historical trends records, we are confident for the foreseeable future that we’ll get the support we get from the federal government.
I think your question is important. This cannot just be a federal responsibility. Local government and state governments has to also play a role because there are going to be times when there are gaps in federal support, and this is such a precious resource that we need the city and then other partners to step up as well.
MP: OK, back to the maintenance backlog — and your request for $45 million from the state Legislature. According to MPHA’s current projections, if the agency continues spending at its current rate, it won’t be able to overcome its maintenance backlog — but the overall condition of the portfolio also wouldn’t deteriorate too much over the next decade. What do you say to a lawmaker who might wonder, ‘Can you make do with current resources?’
Warsame: Our families deserve better. As a society, we put our resources into many things — wars, and a voyage to Mars, sports and entertainment. Meanwhile, remember, there are thousands of people on our waiting lists. Historically, 7,500 people have been on our waiting list for single-family housing — and they deserve housing as well.
Housing is a human right. We should take care of the most vulnerable population in our society. And we should give families — like mine, referencing my own experience — a chance to find their feet in this rich state, in this affluent society we live in.
MP: And to be explicit, the ‘population’ you’re referencing is ‘low-income families of color’ — mostly single mothers who are Black.
Warsame: These are the future of the city of Minneapolis. These children and these families. They’re young. They’re upwardly mobile. They have a lot of energy. They have a lot to contribute, and all they need is a fighting chance. That’s what this ask does; it gives them a fighting chance.