A Hennepin County judge ruled in November 2023 that the City’s newest comprehensive plan, the 2040 Plan, would be placed on hold, again, in response to a lawsuit arguing that the plan had not completed the necessary environmental reviews. The City has reinstated the 2030 Plan  “until further notice.”

As reported on in a previous story for this series, the 2040 Plan initiated a wide swath of policies to allow more housing to get built in Minneapolis, in pursuit of improved housing affordability and equity. Most publicized, the 2040 Plan legalized triplexes in neighborhoods across the city. The plan also made it easier for larger apartments to get built throughout the city by eliminating parking requirements and allowing higher density buildings on arterial streets.

A lawsuit from a group of environmental organizations argue that the Minneapolis 2040 Plan failed to complete the in-depth environmental review necessary per the Minnesota Environmental Rights Act. Plaintiffs argued the environmental review was needed due to the additional housing that the 2040 Plan’s land-use changes would theoretically bring to Minneapolis. A Hennepin County judge ruled in favor of this argument. The lawsuit specifically focuses on potential duplexes and triplexes in low-density neighborhoods.

The City of Minneapolis has appealed the judge’s decision, a change slowly working its way through appellate courts. The appeals court will hear arguments on Feb. 21, and then have 90 days to issue a decision. Minneapolis is not currently working to resolve the lawsuit by undergoing an environmental review.

“We’re going to make sure that the 2040 Plan can be enacted in full,” Mayor Jacob Frey said at a Jan. 22 press conference. “I’m telling investors that, I’m telling developers that, I’m telling people who need homes that.”

There’s also an effort in the State legislature to change the course of the 2040 Plan lawsuit. A State bill, proposed last year and likely to be reintroduced this year, calls for changing State law in order to exempt city comprehensive plans, like the 2040 Plan, from the Minnesota Environmental Rights Act. Such an exemption, which is supported by the City of Minneapolis, would change the nature of the 2040 Plan's litigation and strengthen the City's defense against the lawsuit.

The City’s case relies on the argument that comprehensive plans, which are high-level planning documents, don’t make sense under the Minnesota Environmental Rights Act. Minneapolis Planning Director Meg McMahan points to the Minnesota Environmental Policy Act, another state-wide environmental regulation which does not regulate comprehensive plans.

McMahan said that exempting comprehensive plans from the Minnesota Environmental Rights Act would allow legislators to “recognize that this is something that's omitted or missing in state law and to correct that, because we don't believe that the legislature intended for comprehensive plans to fall under [the Minnesota Environmental Rights Act], because they are expressly exempted from [the Minnesota Environmental Policy Act].”

In the short term, however, Minneapolis must still respond to its housing needs, with or without the 2040 Plan.

“I think there’s interest in quite a lot of local reforms,” Chris Meyer, a member of the Minneapolis Planning Commission, said. Meyer suggests revising codes governing duplex and triplex construction, encouraging more multi-bedroom, family-friendly apartments, and reducing minimum lot sizes. He discussed these reforms recently on the Wedge LIVE! podcast.

Some of these changes are reminiscent of the land-use reforms in other cities. As previously reported in in this housing series, Houston and Portland, Oregon both changed local land-use rules to allow more variety of housing, in ways that differ from Minneapolis’s land-use policies. The results have increased the affordability and availability of housing in those cities.

Could Minneapolis start to implement such changes?

“We're in this little bit of a state of limbo,” City of Minneapolis Planner Jason Wittenberg said. “The court order also essentially prevents us from taking further legislative steps to further implement the plan.”

The State legislature offers an alternative route for advancing land-use reforms that affect housing construction. In the past few years, Minnesota Rep. Steve Elkins has repeatedly advanced state-wide bills that would change zoning that are reminiscent of the 2040 Plan. Those bills have had limited success, and no significant reforms to land-use laws or housing regulations have passed in recent years at the Minnesota legislature.

This year, similar bills will be considered again, and may have stronger momentum. Rep. Michael Howard, who is chair of the Housing Finance and Policy in the Minnesota House of Representatives, recently told the Minnesota Reformer that legalizing more housing options across the state was “our top priority in housing this session.”

Some proposed changes replicate reforms already accomplished in Minneapolis, such as ending minimum parking requirements on new buildings.  Other potential changes could have stronger local impacts on Minneapolis. These include initiating a review of the state building code that could allow buildings to have only one single staircase at taller height, which would be similar to Seattle’s building code, as discussed earlier in this series.. The current building code requires two staircases at four or more stories. Other proposals in the works would potentially allow for denser housing around transit stops and allow duplexes statewide.

Even though the Minneapolis 2040 Plan is now held up in a lawsuit, the plan’s previous successes, and extensive positive media coverage around the plan, has influenced statewide discussion of land-use reforms.

“A lot of legislators have observed the positive effects that reforms have had in Minneapolis, and this has made them more likely to support changes at the state level,” said City of Minneapolis Planning Commissioner Chris Meyer,  also a legislative aide to Minnesota State Sen. Omar Fateh.

This Southwest Voices series has reported on different key barriers to housing development that exacerbate a housing shortage and drive up costs for housing. The series has also discussed how the Minneapolis 2040 Plan sought to remove some of these barriers, and looked at the lessons other cities can offer for continuing to tackle housing affordability through land use and regulatory policy.

Across the country, addressing these barriers to housing affordability continues to be a subject of active policy debate. And in the coming months, both local and statewide policymakers will be contemplating the kinds of reforms discussed in this series. Although such discussions can be both politically contentious and dryly technical, they will have meaningful implications for Minnesotans’ ability to afford a home.

‍The Southwest Voices Housing Affordability series is sponsored by Housing First Minnesota.

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Article #1: “Minneapolis has a housing shortage. Here’s why.”

Article #2: “It’s not easy to build a bunch of cheap housing quickly in Minneapolis“

Article #3: “The 2040 Plan can deliver on denser housing”

Article #4: “What housing is getting built in other cities?”