The Diminishing Power of Being Anti-Development in Minneapolis and St. Paul
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.”
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.”
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.
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.