As the cost of living rises, many cities have looked to housing density to increase affordability.
This is because when supply is limited, costs skyrocket as seen in cities like New York City and Los Angeles.
While Minneapolis is no New York, the city has made a concerted effort to adapt zoning and infrastructure to meet population. This was a major focus of the city’s 2040 Plan, which includes a provision that allows duplexes and triplexes in areas that had previously only allowed single-family detached houses without additional approvals.
But some development has been blocked as litigation continued around a lawsuit filed in 2018 by Smart Growth Minneapolis. The lawsuit claims the city needed to do environmental assessments on the impacts of the population growth on water supply, sewage systems, air and noise pollution, before establishing its comprehensive plan. City officials have argued that these reviews are applied to new developments but should not be applied simply to the framework around where these developments can occur.
However, this lawsuit may soon come to an end – or not. It will come down to the decision of a judge. After the close of the legislative session, advocates for the 2040 Plan celebrated what they call a win for the future of housing density in Minneapolis. But plaintiffs in the case deny that the state bill’s language will lead to the dismissal of their case, saying it isn’t effectively retroactive for all claims against the defendants.
Lawsuit and legislation
The Minneapolis 2040 Plan had been fully implemented from a regulatory perspective as soon as a land use rezoning study went into effect July 1 of last year. This was the final of a series of zoning code amendments since 2020 that brought the city’s zoning regulations into alignment with the Minneapolis 2040 Plan.
The city was forced to stop enforcement of certain aspects of its comprehensive plan and zoning code as a result of the injunction issued by the district court in September of last year. That injunction was reversed by the Court of Appeals in May, which allowed the city to immediately resume enforcement of the adopted Minneapolis 2040 Plan and zoning code.
The work that happened in the legislature is meant to represent more than just Minneapolis, said Peter Wagenius, the Sierra Club’s legislative director. The legislation applies to the entire seven-county metro area in granting assurances that plans that increase density can’t be held up in court or trigger expensive environmental studies, he said.
“I’m really proud of the environmental community for leading on this bill,” Wagenius said. “Environmental law was being used against the environment and we put a stop to that. Both for the state of climate and housing, this is an important victory.”
Other legislative bills related to land use reform and housing didn’t pass this year including a measure that would have made it it easier to build multi-family housing in commercially zoned areas and a bill dubbed the “missing middle” bill that would have required larger cities to allow duplexes, triplexes and four-plexes in what has been zoned for single-family housing.
“We know that the ‘missing middle’ (bill) and other bills didn’t pass,” Wagenius said. “This did pass and it’s a victory we can build on.”
As for the claim that the bill isn’t retroactive, Wagenius said, “The wording of the new laws are clear. The court is more than capable of reading the words as written.”
The language that could end the lawsuit can be found in a couple of paragraphs within the 1,400 page bill passed through the Legislature and later signed by Gov. Tim Walz. One paragraph states that comprehensive plans adopted in “the most recent decennial review” and for “subsequent reviews” by cities are not subject to legal challenges under the Minnesota Environmental Rights Act, or MERA, which allows Minnesotans to sue on behalf of the land and water.
The plaintiffs’ attorney, Jack Perry, said this legislation does not actually apply retroactively to moot the case, based on the plain language of the new law and precedent.
“No matter how much they stomp their feet or pound their desk it doesn’t apply,” Perry said.
Rep. Mike Howard, DFL-Richfield, said the language is “quite clear” and is effectively retroactive because it specified comprehensive plans from “the most recent decennial review.”
“That was also the clear legislative intent based on what we worked on all session,” he said.
Within the next week, the plaintiffs in the case plan to file a petition with the Minnesota Supreme Court arguing that the May 13 Court of Appeals decision was incorrect and the new legislation does not moot the legal case. The city will then have 21 days to file a response brief explaining why the Supreme Court should deny review. The Supreme Court will decide whether to grant review of the case or not, but that process may take a couple months to play out.
“The Minnesota Legislature and Governor approved legislation clarifying that the City’s adoption of the 2040 comprehensive plan does not violate MERA. Accordingly, the City has asked the plaintiffs to voluntarily stipulate to the dismissal of their MERA lawsuit. The City is awaiting a response from the plaintiffs,” read a statement from the City of Minneapolis.
The data
The litigation has also made it difficult to track the impact of the city’s comprehensive plan, according to a report by The Federal Reserve Bank of Minneapolis, which created a dashboard to track housing density following the adoption of the 2040 plan. The report states the Hennepin County District Court order that blocked the use of some aspects of the 2040 Plan as of Nov. 4, has been a “key barrier to observing further impacts” of the city’s comprehensive plan.
Construction of multifamily housing in Minneapolis was strong from the late 2010s through the 2020s, peaking at 4,646 new units permitted in 2019, just prior to the implementation of a city zoning policy that required affordable units within new housing developments, according to the report.
However, the Minneapolis Fed’s dashboard shows no statistically significant difference in the volume of multifamily housing construction compared to what would have happened with or without the city’s 2040 Plan.
For the “new multifamily housing” indicator in particular, the lagged implementation of three key policies may have delayed the plan’s full effects, according to the report.
In January of 2021, one year after the 2040 Plan took effect, the city implemented its built form policies, which are a set of city-wide zoning overlay districts regulating attributes of any residential structure built in the city, including height, floor area, and lot size. In May of 2021, the city completely eliminated parking minimums for new construction. And in July of 2023, Minneapolis adopted its Land Use Rezoning Study, which aligned zoning districts with the direction of the 2040 Plan and streamlined the regulatory process for new housing.
Outside of reevaluating single-family zoning, the 2040 Plan also addressed larger housing developments, particularly in and around downtown. The plan added multiple zoning districts that increase the amount of housing that can be constructed near transit and along commercial corridors. Another provision in the plan establishes height minimum requirements for new developments downtown.
Winter Keefer
Winter Keefer is MinnPost’s Metro reporter. Follow her on Twitter or email her at wkeefer@minnpost.com.
