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Mayor says Minneapolis must ‘step up’ to fund public housing. Does the city need to raise property taxes do that?

Public housing has largely been the federal government’s role. Should Minneapolis chip in more by reviving a defunct housing tax?

Minneapolis Public Housing Authority residents and their supporters gathered for a press conference at City Hall on Wednesday.
Minneapolis Public Housing Authority residents and their supporters gathered for a press conference at City Hall on Wednesday.
MinnPost photo by Kyle Stokes

Imagine if the federal government, and not cities, were in charge of running local parks. Broken drinking fountain? Busted swing set? Pothole in the walking path? Cities would have to call Washington, D.C., to pay for a fix — and it might be easier for officials half-a-continent away to deny that money.

That’s more-or-less a reality for the Minneapolis Public Housing Authority: 86% of MPHA’s $186 million in revenues come from the federal government. But in recent months, housing authority officials have stepped up a campaign to convince state and local leaders to take on a larger role in paying for public housing — a task long seen as the federal government’s role.

This week, MPHA officials announced their next step in this push: They urged officials with the city of Minneapolis to revive a defunct property tax levy, creating what would be a dedicated, $12 million-a-year funding stream for public housing.

On Wednesday, residents of MPHA housing pleaded with city leaders to restore the levy to help fix drafty windows, poor ventilation and leaky showers and faucets. MPHA faces a $210 million maintenance backlog — which officials blame on four decades of federal government underfunding.

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“We should be seen like the streets and the parks,” said Abdi Warsame, the public housing authority’s executive director and CEO, “and that means we need a similar investment from the city of Minneapolis.”

In principle, Mayor Jacob Frey agreed: “The city has a role” in supporting public housing, Frey remarked Wednesday, and “we need to step up.”

But do city officials need to restore the housing tax to fulfill this role? This year’s city budget included an “unprecedented” $4.9 million in one-time funding for MPHA projects. Add in a few other funding sources — including some federal stimulus money — the city gave the housing authority more than $15 million last year, Frey said.

Officials also appear anxious that the city’s property taxpayers may be tapped out. Minneapolis leaders are already banking on a 6.2% increase in the overall property tax levy as they make their 2024 spending wish-lists. Adding $12 million to the levy would bump next year’s property tax increase closer to 9%, and other requests could ultimately bump the increase over 10%.

“Asking for an increase at that level will create considerable pushback,” said Steve Brandt, vice president of the Minneapolis Board of Estimate and Taxation, which controls the tax levy, “and I’ll be balancing that against the very real needs” which public housing residents expressed.

Four City Council members — Robin Wonsley, Jamal Osman, Jason Chavez and Elliott Payne — appeared at a press conference Wednesday to express their willingness to restore the tax. The housing levy is still on the books, but it’s been set at zero since 2009. Restoring it at the highest level allowed would require the median homeowner to pay an additional $52 per year in property taxes.

Another option could be to increase the amount of funding MPHA receives through the city’s budget, without necessarily touching the levy.

Frey seemed to point toward this option during Wednesday’s Board of Estimate meeting, which was packed with public housing residents demanding the restoration of the levy: “We at the city,” Frey told them, “will do everything possible that we can to make this right to get the funding — the funding — that you need.”

There’s a lot of overlap between the work of city agencies and the housing authority, Frey noted — and the two agencies work collaboratively. 

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The city’s Community Planning & Economic Development department helps develop and subsidize both public and affordable housing. Frey and MPHA officials have convened a task force of both public officials and non-governmental organizations to support the housing authority’s goal of bringing at least 150 new public housing units online each year.

“When you have a team of people that’s working on that affordable housing work, you’re able to properly allocate funding to the places where it’s needed most at that particular moment, and you’re able to make ongoing commitments as well,” Frey said.

Whichever route Minneapolis’ elected leaders take, Warsame stressed that MPHA will be hard-pressed to make headway on its maintenance backlog without outside funding.

“It’s our neighbors who are suffering,” Warsame said, “so what I’m saying is, let’s discuss it. Let’s negotiate. Let’s talk. But let’s also make sure that this levy is on the table.”

This legislative session, MPHA asked the Minnesota Legislature for a $45 million one-time cash infusion, which would have covered a long list of repairs at the “scattered site” homes the housing authority controls. Like in many MPHA properties, more than 80% of the residents in these homes are Black; many are single mothers; the average household’s income is around $34,000 per year.

With the session winding down, it doesn’t appear MPHA will receive the full $45 million it asked for. The state Senate’s housing omnibus bill includes a $30 million grant to the housing authority; the House’s version would grant MPHA $5 million.

Samantha Pree-Stinson, the Board of Estimate’s president, suggested during a press conference that enacting a levy could be one way to convince state lawmakers to kick in more funding.

“We need to work with our state partners — who weren’t very happy” earlier this year, Pree-Stinson said. To them, “it didn’t seem like we were doing enough as a city.”

“It’s going to take multiple funding sources,” Pree-Stinson added. “I don’t want anybody to misquote me that I’m saying the levy is going to solve all of our problems and it’s a magic rabbit coming out of a hat. But it is a funding source that has sat empty — and we need to make sure that we’re meeting our obligation.”

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Val Labrie, who lives in Northeast, spoke directly to Frey during public comments at Wednesday’s meeting, urging the mayor to get behind MPHA residents’ push for a levy.

“It’s not a budget. It’s a tax,” Labrie said. “It’s completely different. We need that.”

Glancing over her shoulder at the public housing residents holding signs, Labrie added: “I’ve got a whole roomful that’s going to start hounding you if you don’t get it done.”