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The diminishing power of being anti-development in Minneapolis and St. Paul

The diminishing power of being anti-development in Minneapolis and St. Paul
MinnPost photo by Peter Callaghan
For the most part, the candidates who were perceived or portrayed as being pro-developer won.

After Donald Trump and police union presidents, the biggest villains of the 2017 municipal campaigns in Minneapolis and St. Paul — at least according to more than a few campaigns — were developers.

It wasn’t just Socialist Alternative city council candidate Ginger Jentzen, who promised to tax corporate executives and “big developers” to pay for affordable housing. In St. Paul, mayoral candidate Dai Thao explained his opposition to the Ford site plan by saying one of the few winners in the deal would be wealthy developers. In Minneapolis’ Ward 9, a last-minute anonymous mailer offered up an image of Gary Schiff’s disclosure report — to show how much he had received from “real estate developers, business interests, architects and contractors.”

Incumbent Minneapolis Council Member Lisa Goodman, meanwhile, was accused of helping the rich and powerful and not “regular people,” which she considered code for developers and downtown business interests. Council Member Lisa Bender’s opponents focused their campaigns on her support for housing density. And Minneapolis Mayor-elect Jacob Frey’s receipt of contributions from developers and downtown business interests was portrayed as evidence that he was a closet Republican.

Yet what was a familiar campaign issue didn't appear to be a very potent one. For the most part, the candidates who were perceived or portrayed as being pro-developer won. St. Paul Mayor-elect Melvin Carter was the biggest proponent of the city-adopted plan for the Ford site, and Frey was the only mayoral candidate in Minneapolis to make growth and density one of his primary talking points. Bender and Goodman won easily, and Jentzen was defeated by DFL-endorsed candidate Steve Fletcher. Only Schiff, a former council member trying to unseat incumbent Alondra Cano, lost — an outcome that probably had little to do with developer contributions.

'City Hall controls them'

Goodman’s Ward 7 contains the southern half of downtown as well as Lowry Hill, Lake of the Isles and West Lake Street. “I’ve seen a lot of development in my ward and I’ve been a supporter of development in key locations,” she said, “especially on commercial corridors and in downtown.”

Goodman said there's a contradiction from residents who say they “want more density, and they want more housing, and they want more affordable housing, but they’re willing to bash the people who do it.”

Councilmember Lisa Goodman
Councilmember Lisa Goodman

Frey echoed those remarks, “if you want density and affordable housing, somebody has to build it.”

Frey said it is hard to separate the issues of density and affordability. “Most candidates [for mayor] recognized that you can’t argue for affordability and at the same time argue against additional supply because they go hand in hand,” he said.

Frey said the issue for the city is to come up with ways to subsidize the difference in rents between what the market is charging and what is affordable for families below median income levels. “But you need to have the conversation about supply as well, because without adequate supply to meet or exceed demand, rents will continue to rise far in excess of any subsidy work we can do,” he said.

Bender has been the chair of the Minneapolis council’s Zoning and Planning Committee for four years and has been  a proponent of increasing density, especially in commercial nodes and on transit corridors. She said she understands the emotions that the issues bring out in some voters.

“Development is stressful for people because it brings change, especially when people own their homes, which is one of their biggest financial investments,” she said. “I think people’s legitimate concern about growth and change in their neighborhoods ends up focused on developers as evil actors.”

She also said that the way the city processes development applications contributes to the way some view developers. “It’s often the developer in front of the room,” she said of community meetings where projects are discussed. “They are the face of the project.”

Council Member Lisa Bender
MinnPost photo by Peter Callaghan
Council Member Lisa Bender

And because there isn’t enough city planning staff to lead the discussion and respond to neighborhood concerns, that often falls to council members.

Peter Brown, a Minneapolis-based architect who is a planning and development consultant who wrote the book, “How Real Estate Developers Think,” said there is a good reason developers are active in local elections. “Unlike other entrepreneurial, profit-making business owners, developers play on a big public stage,” Brown said. “People know who they are and the reason they’re interested in elections is because what they’re doing has to do with zoning and land use and the government regulates that. They’re the visible guys and it’s easy to just hammer on them.”

He added that most developers would laugh at allegations that they control city hall. “They would tell you that they don't at all,” Brown said. “They would say that city hall controls them.”

Did Minneapolis Works! work? 

So how active were developers and construction-related donors in 2017?

According to an analysis of contributions by MSPVotes, Frey received the most money from developers, at $40,050. Mayor Betsy Hodges was a distant second with $9,000, followed by Tom Hoch at $6,900 and Raymond Dehn, an architect, at $1,750. The other top candidate  — Nekima Levy Pounds — did not receive any money from developers, the MSPVOTES analysis reported.

Among winning Minneapolis council candidates, Goodman received the most at $16,442, followed by Bender at $12,400, Kevin Reich at $11,150, Andrew Johnson at $5,400 and Abdi Warsame at $1,100. Two unsuccessful candidates who attracted sizeable developer contributions were Schiff at $9,150 and Ward 3 candidate Tim Bildsoe at $6,100.

Some of the early campaign rhetoric was one of the factors that led to the creation of Minneapolis Works!, a pro-business political committee funded heavily by developers and contractors to help candidates that seemed open to their concerns. The independent expenditures weren’t especially successful, since Goodman and Ward 1 incumbent Kevin Reich were the only candidates supported by Minneapolis Works! that won, but the committee's role did allow people running against those supported by Minneapolis Works! to suggest they were in the pockets of developers.

The next Minneapolis City Council

Affordable housing — or more accurately, a lack of it — was an issue in the mayor's race and in every ward. There were calls for inclusionary zoning, policies that either require or incentivize the inclusion of affordable units in market-rate projects, and Jentzen was the a prominent advocate for rent control, something pre-empted by state law but that’s also becoming an issue among social justice activists across the country.

MinnPost file photo by Terry Gydesen
Mayor-elect Jacob Frey

Frey opposes rent control, as did most of the other mayoral candidates. But he did suggest segregating a certain segment of annual growth in property tax receipts for affordable housing projects.

The mayor-elect said he didn’t yet have a read on how the new council, which will include five new members, will act on issues surrounding land use, density and development. Goodman posed the question this way: “How far will folks go in regulating and making it hard for developers to do their job?”

Bender said she thinks housing and affordability will be significant issues for the next council. “The vast majority of incoming and returning council members understand that part of it, that Minneapolis has to be allowing for more housing in a growing city.”

Some of that will come in a pending rewrite and update of the city comprehensive plan, the document that guides decisions on transportation, land use, zoning and housing. Or as Bender framed it: “Where are there opportunities to add housing units in neighborhoods across the city, what should it look like and how can we use design to make sure it fits into the context of the city?”

Bender said the council will also grapple with the city's historic pattern of housing segregation.

Bender could trigger one of the first big decisions. If she is successful in the campaign to become the next city council president, she will have to decide who would replace her as zoning committee chair, a position that also includes a seat on the planning commission.

She said she thinks there will be many good options for that job. “I think we've been successful in making zoning so cool that there will be lots of interest in leading on that issue in the next term,” she said.

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Comments (11)

The pirate code

The pirate code, or comprehensive plan, is really more like suggestions to blatantly rip off Disney's Pirates of the Caribbean franchise films; when any municipal body that regulates development wants to depart from it, they just adopt findings declaring that they are either not doing that or that what they are doing better serves some other goals in the plan in circumventing one.

Guvmit is, was, and always will be all about the Benjamins whether yours, mine, or somebody else's. We only hope that such documents as comprehensive plans, or charters for that matter, guide decision makers and various stakeholders in their actions to deliver us some iteration of Minneapolis most have not problem living, working, and spending Benjamins in.

There's a subtlety here worth

There's a subtlety here worth pointing out, which is that not all of the 'pro-development' candidates mentioned approach that issue the same way. CM Goodman may be seen as an ally of down development - but she'll do anything to prevent anything from taking place in the wealthy, single-family home neighborhoods that constitute her base.

Goodman's opponent, Janne Flisrand, is in no way anti-developer the way that Jentzen is. Like a lot of people that would describe themselves as "urbanists", she advocated for modest increases in development everywhere - a view that not only includes downtown and corridor development but also "missing middle" buildings like duplexes, fourplexes, and small apartment buildings in all neighborhoods. These are building blocks of walkable neighborhoods that meet everyone's housing needs. I am hoping the mayor elect feels the same way.

The point being that I don't think it's accurate to characterize that race as a pro- vs- anti-development race, but instead one that had candidates with two different ideas about what makes a healthy city. That Goodman scooped up developer dollars is no surprise - the folks that do the big money developments downtown are clearly familiar with her and considered her the likely winner.

Just for argument's sake

…let me suggest, re: Peter's second-to-last paragraph, that no zoning commission, and even less a planning commission, can be genuinely independent if one of its members is on the city council. It's not possible to have that arrangement and **NOT** have ward-based and other parochial politics and economic interests be injected into what ought to be a nonpartisan and citizen-run process.

My experience as a planning commissioner in two Colorado cities supports Bill Kahn's characterization of planning commission, city council, and comprehensive plan. No matter what the professional staff hired to do this stuff might conclude, when it's convenient (I.e., when a developer has the right connections, or a city council members favors a particular project), comprehensive plans are routinely ignored or pushed aside, sometimes gently, sometimes not, in favor of, as Kahn suggests, "Benjamins."

Zoning is, at least in my experience, the key to most other municipal economic policy decisions, and most zoning decisions are made long before the public is even aware there's a decision to be made, much less having an opportunity to weigh in on a project proposal. Having a city council member not only chair a council zoning committee, but be a part of the planning commission itself, pretty much guarantees a tainted result, even with good intentions on the part of those involved.

Affordable Housing

I don’t live in Minneapolis, and in fact do not recall the last time I was in Minneapolis, so I don’t have anything in this game.

Lack of “Affordable Housing” is frequently mentioned in many articles. There have been articles in the past about lack of available Section 8 and low income housing. Why doesn’t Minneapolis, not developers, build housing that will accept Section 8 vouchers and price to low income? These units could be scattered around, not in one area, so the NIMBY crowd would still exist but may not have influence to the extent they could stop the housing in their area.

Seems like a simple solution to the problem but I doubt it will be considered. Would be too easy.

Appearances

Indeed, it **seems** like a simple solution, but it would require substantial amounts of taxpayer dollars to do this, and here in the Twin Cities (and, to be fair, in the other metros I've lived in over the past several decades), we save those precious taxpayer dollars for better uses. High on the list of those other uses are football stadiums and/or other athletic venues from which profits (private profits, of course) can be made more readily.

It's also worth remembering that past efforts at government-provided affordable housing have been, to be kind, unsuccessful for the most part. I lived for a long time in metro St. Louis, and the infamous Pruitt-Igoe public housing projects on the north side of the city of St. Louis were so awful they were something of a national scandal. These multi-story towers were badly-built, badly-maintained, crime-ridden, and, in the end, yet another way for an already-segregated city to further segregate the poor from the rest of the citizenry. That sort of concentration of poor people of color also goes against your suggestion of "scattering" affordable housing. Neither one of the communities where I was a planning commissioner, nor the other communities where I lived, was interested in providing Section 8 housing, or assisting people in finding such housing.

Earlier this year,

Earlier this year, Minneapolis passed an ordinance requiring all landlords in the City to accept Section 8 vouchers:

http://www.startribune.com/minneapolis-city-council-approves-section-8-a...

It would go into effect next year and is a good idea. Landlords have sued over it, though:

http://www.startribune.com/landlords-sue-minneapolis-over-section-8-anti...

As for the City itself building the housing, a housing unit costs something like $200,000 a pop to build, and that adds up extremely quickly when you're talking about thousands of households who could qualify. Last time the public housing authority opened up the Section 8 waitlist was in 2008 and there are still about 7,000 on the list:

http://mphaonline.org/section-8/applicants/how-to-apply/

Generally speaking, a really good way to hold down housing costs is to let the market build the units it wants to build. Over the past couple years, we've seen a lot of a different type of housing development that is not quite the 2011 Uptown luxury apartment everyone makes fun of.

Because we've made our zoning code less bad and required less structured parking, which is very expensive, developers are starting to building units that rent for below $1,000/month. Which of course isn't immediately helpful to someone making $11 an hour, but building new units that rent for $925/month reduce the pressure on existing housing stock by making it less financially attractive to buy an old building with units that rent for $600/month, put in new countertops, and jack the rent up.

Council president does not unilaterally appoint committee chairs

The council president does not unilaterally appoint committee chairs.

Framing it “pro-developer” misses it for me.

I don’t care about developers, pro- or anti-. They are a means to an end.

I’m for plenty of housing, in every neighborhood, for all incomes, especially where people desire to live the most. I’d rather see the issue framed towards pro-more-housing.

Making their developers’ lives easier means making more housing means increasing supply means the increase to housing costs stays low, all the while relieving the pressure to convert old cheap apartments and kick out their low income tenants.

Totally bizarre article

The primary existing narrative is that developers have ALWAYS had out-sized influence over local political systems; and Gallaghan writes a story about developers winning local elections and gaining more control... under a title that anti-development forces are "loosing" power? You can't lose something you never possessed in the first place.

Look, if you want to write a pro-business hit job on people who want to balance community and neighborhood concerns with developer's profit aspirations at least be honest about it. Let's not pretend that people who simply want their voices heard have somehow taken and lost control of the local economy. To the extent that developers have strengthened their firewall against local opposition this story isn't about poor developer's haveing trouble making a buck while showering the community with much needed housing.

The conflict has never about development per se- it's a always about the scale and nature of the development. Developers have a track record of promoting boondoggles and monstrosities so it's simply appropriate that the citizens who have to live with these developments have a voice.

Furthermore, simplistic supply and demand models don't even begin to describe the nature of gentrification and price-bubbles that depress affordable housing. While we certainly have a homeless problem, we don't actually have a housing shortage so mere demand obviously doesn't explain the lack of affordable housing. The vacancy rate of new housing downtown is the highest in the city but that's not driving prices down. If this kind of simple-minded buffoonery is going to govern development models MPLS is doomed.

Housing

Where do you get the idea we don't have a housing shortage? Prices haven't dropped because not nearly enough housing has been built. And high-end housing is being built because there is a demand for it. If that results in a bubble, its a good thing because then prices will drop.

It really is about supply and demand, here and everywhere else. Developers aren't building for the common good, but they are a necessary part of the solution. We are far better off with pro-development people than economic illiterates like Ginger Jentzen (rent control?) on the counsel.

Show me the people without housing

Show us the vacancy rates and the people who can't find housing. After WWII we assemble surplus quonset huts on vacant land all over the cities for new families to live in... THAT'S what an actual housing shortage looks like. You're assuming that the mere fact that developers are building must mean we have a shortage, I would have thought the last housing bubble and all those abandoned projects would have revealed the flaw in that reasoning.