Kudos to the City of Minneapolis for Considering a Creative Way to Address a Housing Shortage

Minneapolis city leaders are considering a smart proposal to allow all single family zoned properties to expand up to four units. It's a creative proposal and the city deserves kudos for considering it. 

Adam Belz, of the Star Tribune wrote, “The proposal to lift zoning restrictions in single-family neighborhoods is one part of a draft comprehensive plan, which the city will release later this month.” According to Belz, this proposal would be “a historic rewriting of the zoning rules that would allow property owners to build fourplexes on any residential property in the city.” You can read the full story here.

This proposal is a great start but there are more common sense steps that the city can take to help increase density and help make it easier to provide more housing options.

Here are five more steps that Mayor Frey and the city can take to increase density:

  • Expand and invest in ADU's. The city passed an ordinance allowing for Alternative Dwelling Units ("Granny shacks" or casitas) in 2014. But most homeowners aren’t aware of the option to add an ADU or don’t understand the building and financing process. The city should renew it’s push for ADU’s and provide homeowners with vetted options for financing, tips on building, and incentives for those who build. It's a strong bill but there is room for improvement in implementation. Here are some great tips from a top ADU developer on the potential for urban centers and ADU development.
  • Re-examine the city's program for city owned lots. 156 lots sit vacant and on the city's books. The program to sell them isn't working, and became fodder for political ads in the last Mayoral election. Now that the election is over, it's time to find out why this isn't working and work to fix this.  The short summary of why it's not working: the sale of these lots is limited to owner occupants, new construction can be difficult and expensive for many buyers, and the numbers for many of these lots simply don't work to make these a smart investment. The city has to find ways to further incentivize these purchases or find new ways to develop city owned lots above and beyond the current incentives that aren’t working.  
  • Focus on developing vacant property. There are 347 registered vacant properties in Minneapolis today.  Property owners have a right to hold onto vacant property, waiting for values to increase or for a perfect buyer to come along. But the city can do more to discourage them to hold property  and help them find developers to purchase.  Increasing vacant property fees, proactively identifying properties  for redevelopment, and offering tax breaks and incentives for development could help make these vacant properties become part of the housing solution.
  • Add financing and incentives to increase density.  If the city is serious about finding creative ways to help solve our density program, it has to offer financial resources to encourage this type of development.  Loans, grants, and tax breaks are important - and needed - to help encourage buyers to add housing stock and density.
  • Offer education and support for homeowners and real estate agents.  Most homeowners and real estate professionals (agents and others) know about the housing shortage but aren’t equipped with the information on how they can help.  The challenges of construction, finding financing for ADU’s and additions, and navigating the city’s bureaucracy for inspections and licensing can all be deterrents.   Real estate agents need to be equipped to help home-buyers understand the potential for these non-traditional ways to add value to their property, ideally by offering continuing education credits to agents.  The city will need to train homeowners on financing and construction, and find ways to help streamline the permitting and rental licensing process to make it easier for residents to add density.

Kudos to city leaders for considering a smart and creative step towards bettering the housing market. Expanding and supporting the city's ADU program, re-examining the city owned lots program, looking for ways to develop vacant property,  launching financial incentives to increase density, and a citywide training program targeted to homeowner and real estate agents could help play a role in the city's housing shortage.  Mayor Frey and the City Council should continue to have these conversations and take bold steps to add density and more housing options.



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