From Single-Family To Many – How Minneapolis Is Zoning In On Affordable Housing, But Not Everyone Is Happy

A controversial program in Minneapolis could solve the affordable housing crisis facing many would-be homebuyers across the United States.

In 2019, Minneapolis became the first major U.S. city to eliminate single-family exclusive zoning, allowing developers to build multifamily buildings on lots previously zoned for single-family homes. Through a plan called Minneapolis 2040, the city encouraged developers to create a mix of project types in different neighborhoods, including affordable housing units.

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Other reforms in the plan included eliminating parking requirements and prioritizing designs that favored public transit users, pedestrians and bicyclists.

"If we're going to put up affordable housing, we don't just want to house one family," Minneapolis Mayor Jacob Frey told NBC News. "We want to house five or six or eight or 25 families. We're allowing for a greater diversity of housing options."

Housing has taken center stage on the campaign trail, with the broader economy weighing heavily on voters' minds. Since 70% of inflation's rise is tied to shelter costs, discussions about slowing inflation are increasingly focused on addressing housing expenses.

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Although the average 30-year fixed mortgage has decreased by about a full percentage point in the past year, the median sale price for an existing home has increased by 3.1%, according to the National Association of Realtors.

Both former President Donald Trump and Vice President Kamala Harris have pledged to support first-time homebuyers, though the Harris campaign has provided more specifics. Harris and her running mate, Minnesota Gov. Tim Walz, aim to build three million new homes to tackle the housing affordability crisis.

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Trump campaign spokesperson Karoline Leavitt attributed rising housing costs to the current administration's policies and an "unsustainable invasion of illegal aliens." The Trump campaign's housing strategy includes freeing up federal land for development and reducing regulations.

A Pew Research report said that from 2017 to 2020, during the early years of the Minneapolis 2040 plan, the city saw a 12% increase in housing stock, compared to just 4% across the state.

"The results speak pretty clearly for themselves," Frey said.

An NBC News analysis on home buying difficulty ranked Hennepin County, where Minneapolis is located, as the second-easiest county to purchase a home among its seven neighboring counties, despite Minnesota's most populous county.

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The conditions appear to be favorable for increased homebuilding. Ryan Allen, an urban planning professor at the University of Minnesota, analyzed 50 years of building permit data in Minneapolis. His findings show that over the past five years, developers have been submitting permits at rates 2½ times the yearly average.

"That's a clear signal of interest and faith in the housing market here on the part of developers," Allen told NBC.

In the five years since the plan was approved, rents across the country spiked 22%, but in Minneapolis, they fell by 4% in the same period.

Frey acknowledges that the plan sparked significant controversy. Signs appeared across the city urging developers not to "bulldoze my neighborhood."

Environmental groups also raised concerns, arguing that Minneapolis needed to provide more evidence that increased housing density wouldn't negatively impact the environment.

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