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Civil rights complaint seeks to stop cities from concentrating low-income housing in high-poverty neighborhoods

Cedar High Apartments on Cedar Ave.
Minneapolis Public Housing Authority
Cedar High Apartments on Cedar Ave.

A civil rights attorney based in Washington, D.C., thinks he has the method for forcing changes in how and where St. Paul and Minneapolis locate low-income housing.

Michael Allen did not file a lawsuit against the cities and their joint Housing Finance Board. Instead, he filed a complaint with the federal Department of Housing and Urban Development that, if successful, could put tens of millions of dollars in block grant and other federal poverty grants at risk.

That’s not the result that Allen and the local complainants — the Metropolitan Interfaith Council on Affordable Housing and three Minneapolis neighborhood organizations — necessarily want. Rather, the groups bringing the complaint want the two cities to stop over-concentrating low-income housing in already impoverished neighborhoods. Doing so, even while assuring the federal government that they are not, is in violation of both the federal Civil Rights Act and the Fair Housing Act, the complaint says.

Asking HUD to investigate

The complaint, which was filed on March 30, alleges that policies in both cities limit “the development of affordable housing in high-opportunity, majority-white communities” and instead steer such units to “low-opportunity, high-poverty communities, furthering racial and ethnic segregation.”

According to the complaint, people of color are significantly more likely than whites to rent homes and significantly more likely to need affordable rental housing. Concentrating such housing in segregated areas has diminished the opportunities for members of those communities “to live in stable, integrated neighborhoods; by undermining the ability of public schools to remain integrated.”

The money at issue is substantial. Minneapolis received more than $36 million from HUD in 2012 and nearly $23 million in 2013, the complaint estimates. St. Paul received more than $20 million from HUD in 2012 and $12.5 million in 2013. The complaint asks HUD to investigate. If the federal agency find the cities in violation, it should require them to follow civil rights and fair housing laws or risk losing future federal funds, the complaint says.

“We hope it doesn’t get to the point where money is cut off,” Allen said. “They serve a lot of low-income people. But the price of admission is complying with civil rights requirements.” Allen says the complaint could bring a response from HUD in a few months.

Michael Allen
Relman, Dane & Colfax
Michael Allen

Both cities have denied they are in violation of federal laws and policies. St. Paul had not been formally notified of the complaint, “so we cannot provide any substantive response other than to say racial equity is important to us in all areas, including housing and we are in compliance with the Fair Housing Act,” wrote Laura Pietan, St. Paul’s interim city attorney.

Minneapolis City Attorney Susan Segal wrote in response to a request for comment that the city has used federal funds and tax credits appropriately. She also said the city is in full compliance with fair housing laws.

“The City fully supports the need for affordable housing not just in Minneapolis, but throughout the State and seeks to combat, not further, concentrations of poverty,” she wrote. “Low Income Housing Tax Credits have been used successfully by the city to diversify housing options … and to maintain and stabilize existing housing stock.” She said the city has used tax credits citywide, “not just areas of minority concentration.”

New strategy to push local agencies

Allen said last week that the complaint process is a relatively new strategy to get HUD to push change on local agencies. Federal law has long required recipients of federal housing and community development money to certify that they are following the law. For years, Allen said, local governments assumed HUD would never challenge the validity of that certification. As a result, it became easier to put housing where it would be least resisted and not draw opposition from NIMBYs, he said.

That changed when civil rights attorneys like himself began challenging the certifications. In a  challenge he brought against Westchester County in New York, Allen successfully argued that the county had falsely claimed it was meeting federal law. That led HUD to reach a settlement with the county that required it to build hundreds of low-income units in the whitest areas of the county and market them to people of color. Block grant money has been withheld when the county did not deliver on its promises.

Since that challenge, Allen said, HUD has been more assertive in making sure certifications for state and local governments across the county are accurate and that governments do what they’re supposed to do, which is to “affirmatively further fair housing.”

St. Anthony Hi-rise on University Ave. N.E
Minneapolis Public Housing Authority
St. Anthony Hi-rise on University Ave. N.E

“It woke HUD and others up a little bit,” he said. “I’d like to think we showed HUD how it could do what it should have been doing all along.”

Allen said the purpose of such challenges isn’t to relocate all residents of low-income neighborhoods to higher-income areas. He said the purpose is to give residents a choice. Governments should both attempt to build up struggling neighborhoods and “give people a choice to get to places where streets are already safe and schools are already good.”

“Twenty years ago, the Twin Cities was one of the most progressive in providing a balance between those two. Those of us in the rest of the country were salivating to get some of what the Twin Cities had,” Allen said. That has changed, and now the region is “pretty dramatically segregated.”

“The Twin Cities got it right, and then it got it wrong,” Allen said.

Earlier complaint filed against Met Council

This complaint is the second in a year by Allen and MICAH aimed at changing the ways in which the region locates affordable housing. In September, Allen filed a complaint with HUD asking the agency to investigate whether the Metropolitan Council and the Minnesota Housing Finance Agency have failed to distribute affordable housing throughout the region. Joined by racially diverse first-tier suburbs Brooklyn Center, Brooklyn Park and Richfield, the complaint alleges that while the older suburbs absorb more than their fair share of low-income housing, the state agencies fail to require newer — and whiter — outer-tier suburbs to do the same.

Last month, nine DFL House members, including Minority Leader Paul Thissen, and five DFL senators sent letters to HUD in support of the complaint. “Minnesota urgently needs HUD’s positive federal action to promote the fair housing opportunities presented in the MICAH” complaint, wrote Rep. Karen Clark of Minneapolis.

Both complaints rely on research and reports done by the Institute on Metropolitan Opportunity at the University of Minnesota and its director, Myron Orfield. The latest complaint asserts that little subsidized housing has been built in what is termed high-opportunity areas. One-fourth of the Minneapolis census tracts with the highest minority populations contain 49 percent of the city’s low-income housing units. “In stark contrast, the city’s whitest quartile of census tract — which comprises 30 percent of the city’s total housing units — contain a mere 1.3 percent of the city’s low-income units.”

Oliver Manor on Oliver Ave. N.
Minneapolis Public Housing Authority
Oliver Manor on Oliver Ave. N.

On the street level, the difference is dramatic: In high-minority census tracts in Minneapolis, there is one low-income unit for every block; in low-minority tracts, there is a low-income unit every 6.5 miles, the complaint says.

Under federal rules, local agencies must actively seek to integrate housing; they also must commission formal assessments of how they are doing. The complaint asserts that the assessments each city compiles aren’t complete, however, giving the cities good marks when they are not deserved. The complaint also alleges that the assessments focus too much on anti-integration actions of private entities such as lenders and landlords — and not enough on what government entities do or don’t do.

While the complaint filed last fall was critical of the Met Council, the latest complaint pays the regional agency a compliment of sorts. It cites the council’s 2014 report, “Choice, Place and Opportunity,” and how it points out how government decisions tend to concentrate affordable housing in high-poverty areas. “Funders of affordable housing give funding priority to locations that are proximate to jobs and transit,” which are prevalent in the central cities, the Met Council report stated, and noted that the region needed to find a balance between “maintaining safe, decent, affordable housing opportunities in areas with concentrations of lower-income households and investing in new affordable housing in higher-income areas.”

But the complaint says that the subsequent certification charged with detailing progress toward housing integration in the region failed to use the “Choice” report to call out government actions or inactions that are “impediments to fair housing choices.”

The neighborhood groups joining the complaint against Minneapolis and St. Paul are the Webber-Camden Neighborhood Organization, the Whittier Alliance and the Folwell Neighborhood Association.

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Comments (19)

It's about time

Racial bigotry is ugly. Economic bigotry is just as ugly. Combining the two in the form of discriminatory housing policy is at least as ugly as either one of them separately. "White flight" to the 'burbs is at least a couple generations old, and it's not difficult to see the results in metro areas all over the country. Dissembling public statements from local officials to the contrary, one of the real disappointments of moving here was the discovery of just how segregated the Twin Cities have become, made even more disappointing when the reputation of the state elsewhere was that Minnesota had "got it right." While I can't speak for St. Paul (I don't live there, and don't have reason to visit often), the results of NIMBY-driven housing policy are easy to see in parts of Minneapolis and its environs to the north and west. Lots are big, houses bigger, resident faces of color far more rare.

When Allen says, “The Twin Cities got it right, and then it got it wrong,” I think he's spot-on, and having "got it wrong" in recent decades makes correcting those errors of both commission and omission that much more difficult and complicated. The less-tolerant in the community (and they're not limited to those who like to call themselves "conservative," or members of a particular political party) will come out of the woodwork to combat the comfortable (for them) segregation to which the area has become accustomed.

Michael Allen

[The cities limit] “the development of affordable housing in high-opportunity, majority-white communities” and instead steer such units to “low-opportunity, high-poverty communities, furthering racial and ethnic segregation.”

This broad, sweeping generalization about who lives where and why is racist on its face. In St. Paul, I've lived in run-down mixed-race neighborhoods and I've lived in nice mixed-race neighborhoods. And in both cases, both the poor people and the well-off people were from several different races.

It's outrageous that anyone would allow these bourgeois, white liberal bureaucrats and academics to dictate where housing is built and by whom because of their misguided attempts at social engineering.

The government needs to get out of the "affordable housing" business and limit their attempts to help poor people to issuing generous, yet temporary rental vouchers for those who can't afford the average rent in the city due to their low income. That's it. Otherwise, butt out and take your racist assumptions with you.

DT Not again?

It isn't the cities "per say" its the residents of those neighborhoods "Your white this, white that, white the other thing republican voting, "not in my back yard folks" Not totally of course, there are shreds of other folks.

We should also get out of the "help those rich folks" business with fair tax laws and no special treatment like $2B a year for the likes of Exxon, agreed?

Yep get out of the affordable housing: better solution let those folks live in cardboard boxes on Nicollet avenue!

Social engineering? And what would you call a gated community? Random homesteading?

Yes, the government should

Yes, the government should get out of the housing business, but a good first step would be to get out of the housing business in higher income neighborhoods. In neighborhoods like Mac Groveland, residents benefit greatly from the government's intervention that keeps property values high. If the government didn't intervene, but allowed a free market approach in desirable neighborhoods, I'm sure more tear downs and development would happen, more rentals would be available to students, and more accesory dwelling units would be installed. This would increase housing stock, which by nature of markets create a mix of lower and higher priced housing. Of course, the free market approach might reduce some people's property values, while raising other values, so the free market aproach is generally undesirable for people in higher income neighborhoods. Thus, we are likely stuck with the way things are. Those in the more affluent neighborhoods generally have the political power.

I think all the white

I think all the white liberals should move to the inner city and put their homes in the suburbs on sale for 1/2 market value and stipulate that only a minority can buy it. That should solve 2 big problems, bring more minorities to the suburbs and let the white liberals feel better about themselves.

Another option would be to let folks live where THEY want to.

Follow the money (nearly 50M from HUD) a year for Mpls/St Paul and you'll see who is pushing for the housing to be built in low income areas.

Gee Joe

Already here since 1984!
Suppose progressive, social liberal, libertarian-fiscal conservative doesn't count?

Why are low incomes built the inner city? Its called "Less expensive" especially with non-profit money, and not a lot of NIMBY complaints, and it doesn't take a Harvard MBA Economist to figure that one out.

Cute

Well I thought Joe's idea was cute and humorous.

I always heard that access to low cost mass transportation was important to people with lower incomes. Not too much of that in my burb.

Dig a bit harder and find the

Dig a bit harder and find the connection between Govt money, non profits, political influence, private money and you'll see it is not all about less expensive.

Suppose:

If we dug harder on the connections between special tax loopholes for corporations,wealthy individuals and political influence, its a lot less about creating new jobs and growing the economy.
I.e the point is?

Those evil successful wealthy

Those evil successful wealthy people, if we just took all their money not just 1/2 the world would be a better place. How dare those wealthy folks get involved in politics (Clinton's, Dayton's). Don't get me started on corporations…… I thought we were talking about housing in low income areas and the mix of Govt money, non profits, political influence and special interest groups that just give you the same old results.

Back to Point

Its easy to win when the game is rigged. So you are advocating to continue a rigged game? Similar to the way England had it when the Colonies revolted?

We are talking about housing: but you are the one that suggested "Dig harder" on housing.
Point being: Dig harder on anything. i.e. your argument has no substance. ergo: You think their are no wealthy folks making money on HUD? Lobbying for more of it, Right or Left wing?
The theory that all wealthy folks make it on their own in a fair and balanced environment is a fallacy, if they did, why would there be such a thing as lobbyists?

Enhance affordable housing

I highly recommend including a condition in affordable housing efforts to include orientation of tenants to the responsibilities and rewards of home ownership and/or renters. Make it the responsibility of the building management/council to maintain oversight of the residents, enhance the rewards for renters and/or home owners. They will take pride is this endeavor if they're taught and given the tools. Habitat for Humanity does wonders with this component!

Government Social Enginering An Ongoing Failure

I wonder how many low income or Section 8 complexes Mr. Allen lives by? Since he is a D.C. based attorney he must be making some pretty big bucks and is obviously a socialist who believes in big government regulation and forced social enginering. It amazes me how many white,rich, liberals from Washington think they and they alone hold the answer to our countries problems. The government has been in the low income housing racket since the late 1930's and they cannot show you one successful outcome 70 years later. What they can show you is an ever growing dependant class that is enslaved by the government. Every decade or so they come up with a new "plan" that is going to fix segregation and housing. It costs taxpayers billions and there is no different outcome. The new housing gets trashed within a few years. The people living there are no better off than they were. Cherry picked developers, (LAWYERS) and government hacks walk off with millions in taxpayer dollars. The great society that LBJ came up with is a dismal failure, not even 50 years later all of the housing that was built has been torn down. Now what replaced it needs to be torn down. Section 8 has destroyed hundreds of once robust communities and still the socialists want more and damned you for working for living and wanting to live in a safe neighborhood away from violence, drugs and gangs. Thankfully the Republicans are slashing HUD funding in the FY 2016 and 2017 budgets. I hope the government does find something wrong and cuts all the funding, then Mr Allen can pay for these people's expenses out of his own damn pocket. Parasite.

JB

How about sharing where you get your Section 8 facts? Been trying for years, no one will even tell you the block much less the house. Word we hear is Section 8 is the landlords gold mine, get their check right from social services first of the month, like welfare for the low income rental investor. Perhaps you'll get your way, not sure how well those low income investors are going to like getting their welfare checks cut. You think they are liberals or conservatives? Who do you think will take those rental's, rent goes up or down? Most likely down. Think they are lobbing for more section 8 or less, higher subsidies or lower?
Would also like to see those facts on "0" successful outcomes, and that is compared too? Living in? Just trying to understand the frame of reference, what is success and what is failure.
Looking forward.

Seems real

This might be the real thing, as opposed to the "Holman" complaint that led to the displacement of hundreds of residents of the Sumner Field housing in North Minneapolis. The Holman matter was really a city redevelopment strategy shamefully costumed in civil rights language about excessive contentration of race and poverty. The local chapter of the NAACP had gotten lured into the process, but when the new director began questioning the lawsuit (and also criticizing the Minneapolis School Board) she got voted out of office by white politicians and other allies of the city. (See the vintage City Pages article, "White Like Me.") And we have never seen the true financial cost of the project.

In contrast, the city has never questioned the much, mich higher concentration of race and poverty in Riverside Plaza; on the contrary, it has bent over backwards to assist the owner, Sherman Associates, in every way possible in order for Sherman to keep its largely government-subsidized cash cow producing, in utter disregard of ongoing problems such as overcrowding, mold, faulty elevators, etc. But there, too, it seems we haven't seen the true cost.

It will be interesting to see where the current matter leads.

Riverside Plaza and the Tower of Babel

David! Long time no see. Sherman and Associates have perfected the poverty pimping industry. I left the West Bank after 20 years of hone ownership due to increased crime. Over 90% of the housing on the West Bank of Mpls. is low- income.. Subsidized housing should have time limits for all but the elderly and disabled. Permanent section 8 ruins hope. Crime is not mentioned with an abundance of section 8 in an area. Section 8 residents, as a rule, require much more intensive management than market rate housing. That is a fact.

Segregation is the Only Social Engineering Going on Here

There is simply nothing natural about racial and economic segregation in the Twin Cities nor anywhere in the nation. It's come about due to deliberate laws and policies that required racial segregation and exclusionary zoning practices that made it impossible to build housing that households with modest incomes could afford -- as well as real estate industry practices that mandated racial and ethnic segregation (for example, until the 1970s, it was against the Realtors Code of Ethics to introduce people of a different race or ethnicity into a neighborhood; a city in Texas was founded to be exclusively white; the well-documented list goes on and on).

Housing discrimination and the resulting housing segregation distort the free market in housing. Efforts to end housing discrimination seek to end this distortion and restore a free housing market for all within our nation's borders.

If households with modest incomes are to achieve upward mobility, their children need to be able to attend higher quality schools where the dominate culture is middle class -- ain't gonna happen with severely segregated neighborhoods.

I know that the St Paul city council was concerned about segregation when, in the mid-1990s, it bought 14 copies of a monograph I'd written about ending American Apartheid (the term is apt since our levels of racial segregation are more intense than in South Africa under apartheid). I'm not quite sure why its changed.

The reality is that even wealthier African Americans and Hispanics face discrimination when searching for a home as has been documented in all too many cities.Middle class minorities also run into barriers to moving out of racial and ethnic ghettos. These have been documented in countless Analyses of Impediments to Fair Housing Choice as well as other fact-based studies. We can bury our heads in the sand and perpetuate these levels of segregation, or we can take the steps necessary to end it and start moving to a genuinely free housing market not distorted by the social engineering of discrimination. It won't happen overnight, but locating affordable housing outside racial and economic concentrations is a good first step. Maybe our grandchildren's grandchildren will finally get to enjoy the benefits of housing integration including the lower taxes that will bring.

LIHTC/FHA insurance not considered "federal financial assistance

I would like to see these lawsuits have some positive impact regarding the siting of affordable housing. Unfortunately, the fair housing requirements that the lawsuits say are not being followed do not apply to the sources of funds currently used to produce the majority of new-construction affordable housing. Low Income Housing Tax Credits is an IRS program and is not considered to be federal financial assistance. FHA multifamily insurance, although funded through HUD, is also not considered to be federal financial assistance. The requirements that the lawsuits invoke are only applicable to housing built with federal financial assistance. Section 8, public housing, CDBG, HOME, etc are considered federal financial assistance, but there is no new public housing or section 8 funding for construction, and HOME funds are used in only a few projects.

In terms of federal dollars for new construction affordable housing, about all that is available is LIHTC and FHA multifamily insurance. There are several current new construction/substantial rehab projects funded with these sources, but again, they do not have to comply with the federal fair housing laws regarding racial concentration because by statute they are not defined as federal financial assistance. If a unit of local government wants stricter siting standards to apply to new affordable housing projects funded with LIHTC/FHA insurance, it is going to pass and enforce its own laws.

In Minnesota, MHFA (Minnesota Housing Finance Agency) decides which projects receive the tax credits, and it can include whichever sorts of incentives it wants (to a degree) as a condition of awarding funds. Providing feedback to MHFA on the content of its qualified allocation plan (QAP--the document that describes how applications will be scored) could help to include siting standards. Here is some information on MHFA's proposed QAP:

http://www.mnhousing.gov/wcs/Satellite?c=Page&cid=1358905254471&pagename...

Another tax credit

The relatively recent much trumpeted big repair project for Riverside Plaza got the benefit of Historic Preservation Tax Credits, financial frosting on the cake for Sherman Associates. These required approval by several agencies or panels, including the National Park Service. Most seasoned observers think that a significant part of the repair project's money actually went elsewhere in Sherman's substantial real estate empire. And as mentioned above, health and safety issues continue.