MPHA’s photo of the celebration following the levy’s passage
Last week, the Minneapolis city council council’s passed a $5 million annual property tax levy intended to fund construction and renovations of housing operated by the Minneapolis Public Housing Agency. The city council’s passage of the levy follows a months-long campaign by Mayor Frey, several council members, MPHA CEO Abdi Warsame, and the Minneapolis Board of Estimate and Taxation, which had to approve the levy before it went to the council.
While ostensibly, more money to MPHA should mean more money invested in public housing, MPHA’s approach to housing renovation over the last decades suggests otherwise. DG&PHC has questions and concerns about the tax levy. We doubt that the $5 million will be used to make repairs because MPHA has failed to use previous public funds windfalls for repairs. For example, in 2019, MPHA received a 45% in HUD spending, and continued to pursue the path of privatization, letting buildings fall into disrepair until privatized. This is called demolition by neglect in the housing field.
We have noticed that as MPHA reduces the public housing stock yearly, they continue to lobby for more funds, all while repairs get delayed. MPHA has a long history of using funds as they wish because for decades, they have enjoyed MTW status. MTW means HUD ceded its supervision of MPHA to the City of Minneapolis to have more local and community control. As a result, MPHA has enjoyed more autonomy to try out pilot projects such as privatization. In theory the City would monitor MPHA’s actions, from creating pilot projects to appropriating funds. But, in reality, there has been no oversight, monitoring, or audits by the City of Minneapolis for decades. The City still fails to hold MPHA accountable. This levy will be more of the same regardless of the political optics.
MPHA’s actual stock of Public Housing, defined by Section 9 of the Housing Act of 1937, has dwindled over the decade as MPHA has exploited MTW status to aggressively privatize housing. The latest privatization program MPHA used was Rental Assistance Demonstration (RAD) which allows PHAs (Public Housing Agencies) to convert public housing into “affordable” (or as Mayor Frey says), “ deeply affordable” private housing. MPHA used RAD to privatize the Elliot Twins highrises in 2018 and sold the two buildings to the Royal Bank of Canada. The second federal program MPHA used is RAD’s sister Section 18 Demolition & Disposition, which transferred ownership of all 736 scattered site single-family homes to its nonprofit, Community Housing Resources (CHR). Instead of selling the houses to the families living there, MPHA sold the homes to CHR for $1 each. This is the latest iteration of a decades-long patter. In 1999, MPHA used HOPE VI to demolish 770 units of townhomes and highrises located in the old Sumner Glenwood Neighborhood in North Minneapolis – at the time the largest public housing development in the city.
Through Section 18, residents have reported increased rents and fees, confusing leases, and evictions. Residents also said they were pressured to move out by MPHA and were offered Section 8 Housing Choice Vouchers to look for other housing in this market. Section 8 is a subsidy for private landlords and non-profit corporations to rent to low-income families, but nothing stops the landlord from increasing rents. Section 8 rents themselves are not fixed at 30% of income like Section 9. Additionally, after privatization through RAD and Section 18, nothing stops the developers, banks, and landlords from increasing fees and rents.
Why didn’t the City pass a tax levy years ago, before privatizing Section 9 Public Housing through Section 18 or RAD?
In 2016, when DG&PHC advocated bringing back the old tax levy for MPHA, which the City used before 2010 to meet the funding gaps and stop RAD privatization, public housing residents were told there was insufficient political capital for a housing tax levy in Minneapolis, and thus preserving public housing was impossible. Now that over 736 single-family homes (scattered sites) and the Elliot Twins have been privatized, and MPHA has plans to convert more highrises with RAD to end public housing, the political will has suddenly materialized.
During his recent public relations bonanza, Mayor Frey spoke of the need to “invest” in public housing, all while advancing policies that hand over the city’s public housing stock to nonprofit corporations, banks, and real estate developers. Notably, 2023 was an election year for the city council, suggesting politicians saw the entire levy passage process as a photo opportunity without any accountability or transparency. If Minneapolis City Council were serious about protecting and expanding Section 9 public housing, they would stop RAD and Section 18 now and protect residents from displacement and gentrification.
Given all of this, neighborhood organizations have the following questions:
- How will MPHA spend the levy?
- What are the scope of services funded by the levy?
- What properties will receive the repairs?
- Is there a legally binding document between the City of Minneapolis and MPHA that outlines the needed repairs the levy will address?
- Will the City hold MPHA accountable to submit quarterly reports to explain how the levy is spent?
- Will the City of Minneapolis enforce Chapter 420 to hold MPHA accountable on how they spend funds?
- Why won’t the progressive city council members pass a resolution or ordinance to stop RAD and Sections 18 privatization, since it is now easy to pass a levy?
Defend Glendale & Public Housing Coalition
defendglendale @ gmail. com | www.dgphc.org | facebook @ defendglendale
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612-389-8527
P.O. Box 14616, Minneapolis, MN 55414