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Anne Mavity, Executive Director of Minnesota Housing Partnership (center), speaks at an Axios Expert Voices event in Minneapolis. Photo: Lucas Botz

MINNEAPOLIS — When this city became the first in the country to eliminate single-family zoning last year, the goal was to encourage developers to build denser housing in neighborhoods. But new construction is often unaffordable for lower-income residents.

The big picture: Minneapolis is growing faster than it has at any point in time since 1950, but its housing supply isn’t keeping pace.

  • “We've so under-built because of the 2008 housing crisis that we would have to build 50% more housing than we’re building today for the next 10 years to keep up,” said Brad Hewitt, chair of Itasca Project, a private civic organization.

Yes, but: To get a return on their investment, developers tend to build high-end complexes that price out low- and middle-income buyers who face the biggest shortage of housing options.

So Minneapolis officials are looking at rehabilitating existing homes to maintain lower prices.

  • "Preservation is key," said Minnesota State Senator Kari Dziedzic, speaking at an Axios Expert Voices event this week. "We’re not replacing affordable units at the rate they're flipping over, and we can't build our way out of that problem."
  • "The question is, where does that money come from? It's not the sexy, new-building money."

Federal funding for public housing has been shrinking. Minnesota’s current supply of public housing will need hundreds of millions of dollars in rehabilitation over the next decade, according to local housing officials. And a number federal grants supporting affordable housing around the state are set to expire.

  • "We're about to have a tsunami of a challenge," said Anne Mavity, Executive Director of Minnesota Housing Partnership.

Background: Eliminating single-family zoning was in part intended to erase a practice perpetuating racial segregation. Due to the zoning restrictions and a history of discriminatory lending practices, homeowners in the city are largely white.

  • Now, the share of affordable housing units continues to dwindle and homeownership — a primary way to build wealth — stays out of reach for many people of color.
  • By the numbers: In 1995, 31% of African Americans were homeowners in Minneapolis. By 2005, that had slipped to 29%, and in 2015 only 23% were homeowners, said Jeff Washburne, Executive Director of the City of Lakes Community Land Trust.

“What’s happening now is we can’t develop anywhere close to the affordability levels to serve, specifically, households of color,” Washburne said. "We've lost a ton of ground."

Go deeper

The Mischief Makers

Illustration: Sarah Grillo/Axios

Several Republican and Democratic lawmakers are emerging as troublemakers within their parties and political thorns for their leadership.

Why it matters: We're calling this group "The Mischief Makers" — members who threaten to upend party unity — the theme eclipsing Washington at the moment — and potentially jeopardize the Democrats' or Republicans' position heading into the 2022 midterms.

10 mins ago - Politics & Policy

Obama speechwriter fears Biden unity drive is one-sided

Cody Keenan (right) is shown heading to Marine One in December 2009. Photo: Mandel Ngan/AFP via Getty Images

President Obama's former speechwriter says he's "preemptively frustrated" with President Biden's effort to find unity with Republicans.

What they're saying: Cody Keenan told Axios that Biden's messaging team has "struck all the right chords," but at some point "they're gonna have to answer questions like, 'Why didn't you achieve unity?' when there's an entire political party that's already acting to stop it."

Scoop: Conservative group puts $700k behind Hawley

Sen. Josh Hawley explains his objection to certifying the 2020 election results hours after the U.S. Capitol siege. Photo: Congress.gov via Getty Images

A Republican group is raising and spending huge amounts of money defending Sen. Josh Hawley after he was ostracized for early January’s attack on the U.S. Capitol.

Why it matters: The Senate Conservatives Fund is backfilling lost corporate and personal donations with needed political and financial support, helping inoculate the Missouri lawmaker as he weighs re-election or a possible presidential campaign in 2024.

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