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Speech highlighted transformational work being done through the arts and vibrant storefronts, investment in City workforce and cross-departmental collaborations, upcoming community safety center, commitment to police reform, and a 2025 budget forecast
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Today, Mayor Jacob Frey delivered his 2024 State of the City Address at the NorthStar Center in downtown Minneapolis – the site of the first, recent commercial-to-residential housing conversion project. The mayor gave his remarks in person to state and local elected officials, Minneapolis City Council members, City of Minneapolis leadership and staff, community partners, and members of the press.
The address focused on Minneapolis brimming with possibility and leaning into change during this transformational time. The mayor highlighted the city’s record-setting affordable housing production over the past six years, current arts and vibrant storefronts work to revitalize downtown, the Southside Community Safety Center, police reform, the importance of our City workforce, and a high-level forecast of the budgeting process for 2025.
“By the numbers, the acceleration of our recovery and the pace of change continues. We are leading the nation in the rate of visitor return to downtown with activity up by 45% in the past year,” said Frey.
“Meet Minneapolis announced that 2023 was the strongest year for hotel room demand since 2019. Zillow recently ranked Minneapolis as a top city for first-time homebuyers. That’s right. Anyone looking for a great new home, in a great new city… they should look no further than right here.”
Frey continued, “Achieving that possibility and realizing potential during a time of great transition is hard. And realizing potential is not always a comfortable process, but we must lean into that discomfort all the same. So, the state of our city is brimming with possibility and leaning in to change.”
Since Mayor Frey took office in 2018, affordable housing has remained a top priority, and our housing team in CPED has been leading the charge. The mayor and City have invested a total of $363 million into affordable rental housing and homeownership programs in the past six years.
Between 2018 and 2024, the City has produced 4,679 total units of affordable housing – an average of 780 total units each year. That’s more than double the average between 2011 and 2017. The City has also been prioritizing deeply affordable rental housing at 30% AMI or lower, producing deeply affordable units at nearly 8.5 times the previous rate on average over the past six years. Recently, the mayor and the City have also:
Commissioner Barnette is leading a team to bring the Southside Community Safety Center to fruition by next year, and our communities are shaping this vision alongside our city team. To date, the Office of Community Safety (OCS) has met with community members during more than 15 engagement sessions – and is collecting feedback directly from those who will be most impacted, our Third Precinct residents.
OCS is also acting on the recommendations coming out of the Minneapolis Safe and Thriving Communities Report. This report serves to launch our community safety design and implementation work – helping OCS coordinate our safety departments to address prevention, response, and restoration.
And finally, the City is carrying out the necessary work of police reform. Both through a settlement agreement with the state and an eventual federal consent decree. We are changing the way policing is done in the United States. Chief O’Hara and his leadership team are committed to these reforms and strengthening community-police relations – and City Attorney Kristyn Anderson and the entire 34-person implementation unit is committed to upholding compliance and seeing this thing through to the end.
Recognizing that art is a lynchpin for so much in Minneapolis, Mayor Frey created the Department of Arts & Cultural Affairs last year, and now they are embarking on a beautiful plan for transition across the city.
Got a bland, vanilla, underutilized storefront? Give it to an artist. Let them shape an outcome that is dynamic and transformative. That’s exactly what Director Ben Johnson and his team are doing. Changing vacant storefronts to must-see destinations.
Through deliberate recruitment efforts by staff across our enterprise, great leadership from City Operations Officer Margaret Anderson Kelliher, Department Directors, and a brilliant HR strategy execution from our HR Director Nikki Odom, the City is getting new hires in the door quicker, increasing employee diversity, and welcoming and retaining some serious talent as well.
Compared to last year, applications to the City of Minneapolis have gone up 101%, time to fill jobs has decreased 26%, and the diverse team we are forming is serving our city with passion and skill. In the first quarter of 2024, we are up 56% in our Hispanic/Latino hires, up 55% in our Native American hires, up 15% in our Asian hires, and up 8% in our Black/African American hires.
And, this past year, the City has also been recognized as an “Age Friendly Employer” by the Age Friendly Institute and as a “Most LGBTQ+ Friendly Employer” by Diversity for Social Impact.
These aren’t just awards. These recognitions coupled with the new hiring data show the deep investment we have made – and continue to make – in our City workforce.
Coming into this year’s budgeting process, the City is starting at a projected levy increase of 6.1%. Anything we add to the budget will only increase the levy. And at the very least, the City has 12 union contracts up for renewal next year where we expect to see significant wage increases for over 1,000 City employees.
“The reality of everything I have said so far in this speech, every statistic I provided and number one ranking I bragged about is true. It’s also true that our world has changed. And changing with it will, at times, be uncertain. Even uncomfortable,” said Frey.
Frey continued, “Here’s the reality: budgeting will look different this year. This is not the year to add new, shiny programs. It’s the year to effectively carry out the ones we have.”
The big factor – downtown valuation. With fewer taxes collected from downtown buildings, the money has to come from somewhere. So, that burden of a regressive tax shifts to residents – both homeowners and renters, disproportionately impacting our low-income residents and seniors.
“Reality doesn’t wait for theory to catch up. Minneapolis residents expect much of their local government – most importantly, results. And in Minneapolis, we achieve our possibility by saying “we do” and “we can.”
Changes city leaders and advocates have sought for generations are arriving today.
We CAN knock down the K-Mart, breathing new life into a corridor. We CAN put up eight and a half times the amount of deeply affordable housing. We CAN convert buildings from commercial to residential… make Nicollet Mall a pedestrian space … and achieve permanent implementation of the 2040 plan… We CAN.
Our city is brimming with possibility… and we all make up that team to ensure it’s realized.” –Mayor Frey, State of the City 2024
The mayor’s full State of the City remarks as prepared may be found here.
Minneapolis recently saw the largest year-over-year increase in downtown visitors, according to a new study examining the recovery of major North American cities.
A new cell phone activity study from the University of Toronto's School of Cities found Minneapolis experienced a 45.3% increase in visits to downtown when comparing February 2024 to March 2023.
The increase in visitors to Minneapolis represented the largest jump documented in the study, which examined 64 major cities in the United States and Canada.
While 50 of the downtowns studied showed an upward trajectory, Minneapolis, Montreal, Ottawa, Chicago, Louisville, Pittsburgh, Cincinnati, Boston, Washington DC, and Toronto showed the strongest signs of recovery.
The Minneapolis data shows a significant increase in visitors in the months of June and July of 2023.
Notable events during this time included Taylor Swift's two concerts at the U.S. Bank Stadium, the Twin Cities Pride Festival and the Kiwanis International Convention, which contributed to record-breaking hotel bookings.
While the study did not extend to March 2024, the Big Ten women's basketball tournament held last month also brought a substantial boost to downtown Minneapolis.
Explore the entire Recovery Trends study here.
It marks a major improvement for Minneapolis, which initially struggled to recover from the COVID-19 downturn, and was ranked 64th out of 66 in North America for downtown recovery as recently as October.
The City Council has approved $16.8 million in direct investment and $1.5 million in 10-year federal tax credits to create or preserve 876 units of affordable multifamily rental housing in nine projects located throughout the city.
These investments are the result of awards from the City’s Affordable Housing Trust Fund (AHTF) and Federal Low Income Housing Tax Credit programs for 2023. Together, these investments will leverage over $341.4 million in private and public resources.
“Minneapolis has been leading the nation in our affordable housing production – and the Affordable Housing Trust Fund is a big part of that body of work,” said Mayor Frey. “We know when people have a roof over their head and a safe, stable place to call home, it benefits their mental, physical, and emotional well-being, and that is why this fund is so important. People need access to affordable housing, and we’re giving them that. Thank you to our housing team in the Community Planning and Economic Development department for their partnership and ongoing work to further our affordable housing goals.”
The AHTF creates new and preserves existing affordable housing for low-income renters with incomes at or below 50% AMI ($62,100 per year for a family of four). Almost 75% of renters experience cost burdens (pay more than 30% of their income for housing) because of the affordable housing shortage in the city. Black, Indigenous and People of Color are disproportionately impacted by housing instability.
“The City’s $18.3 million commitment towards affordable housing will leverage more than $18 dollars of additional funding for every dollar the City invests,” said Council Member Lisa Goodman, Chair, Business, Inspections, Housing, and Zoning Committee. “This allocation will assist in building over 876 affordable homes in Minneapolis, a third of which are deeply affordable (up to 30% AMI). This large number of affordable homes being built or preserved is consistent with our adopted goals and is more than most other metro cities combined.”
The AHTF program and the Federal Low Income Housing Tax Credit (HTC) program provide up front equity and gap financing to assist with the production and preservation of decent, safe, and affordable multifamily rental housing.
The City Council approved the following project on Thursday, Dec. 7 for a preliminary reservation of HTCs totaling nearly $1.5 million:
These tax credits will generate over $14.5 million in up front equity for this project.
The City Council also approved just over $16.8 million from the AHTF for the following projects:
In Ward 12, $1,000,000 for the Cheatham Apartments project which is a mixed income building providing deep affordability to large family units including 32 units with secured rental assistance and 20 units restricted for homelessness.
In Wards 8, 9, 10, $1,365,000 for The Northview project which is a scattered site project that preserves large family units with deep affordability and secured rental assistance for 22 units as well as 20 units restricted for homelessness.
In Ward 8, $2,260,000 for The LOMA project which is a 100% affordable senior housing mixed-use project that includes a large number of three bedrooms units for inter-generational living with secured rental assistance for 31 units and 15 units restricted for homelessness.
In Ward 10, an additional $1,000,000 for the 1301 Lake Street project which is a mixed-use building with affordable family housing and 24 units set aside for homelessness.
In Ward 6, $1,350,000 for the Portland Village Rehabilitation project which is preservation of large family housing with deep affordability and 20 units restricted to homelessness. All units have rental assistance except for the caretaker unit.
In Ward 9, an additional $2,500,000 for the Little Earth Rehab project which is rehabilitation and preservation of 212 deeply affordable family housing units including 88 three-bedroom units and 18 four-bedroom units.
In Ward 7, $2,019,427 for the St. Olaf Exodus Building project which is a rehabilitation and new construction project that creates 66 units of permanent supportive housing for people experiencing homelessness or at risk of homelessness.
In Ward 4, 178 units, an additional $3,500,000 for the Upper Harbor Terminal Parcel 6A project which consists of deeply affordable housing including family units and 10 units reserved for homelessness. This project is the first phase of a City priority development site and is a mixed-use project.
In Ward 6, 83 units, $1,900,00 for the NACC Housing project which is a mixed-use project that provides supportive housing including 11 units restricted for homelessness, large family units, and an expanded clinic facility on-site.
In Mayor Frey’s 2024 approved City budget, there will be $18 million more invested into the AHTF.
The City of Minneapolis has awarded the first round of funding for the new, historic climate action work through the Minneapolis Climate Legacy Initiative (CLI). The CLI is Mayor Frey’s innovative plan to fund the City’s accelerated, equitable, and aggressive climate goals over the next ten years. Through the CLI, Minneapolis is poised to become one of the most sustainable cities in the nation.
Mayor Frey announced the creation of the CLI in July after working with various community leaders, grassroots advocates, unions and climate organizations, and City staff. Last Thursday, the City officially opened up contracts with more than 20 community organizations, allowing them to get funding and services through the CLI in areas of the city that need it most.
“You can’t put a price on saving our planet – but the Climate Legacy Initiative triples our investment in climate work and paves the way for important climate initiatives across Minneapolis,” Mayor Jacob Frey said. “With this funding, we’re committing to years of ongoing initiatives to protect our planet and future generations. I am excited to see the first round of funding go out to incredible organizations that are partnering with us in this work, and I want to thank my Council colleagues who authored and co-authored this important Initiative: Council President Jenkins, Council Vice President Palmisano, Council Member Goodman, Council Member Chughtai."
The CLI provides necessary funding to implement the City’s Climate Equity Plan, which provides a roadmap for climate work over the next decade. The community-wide plan sets a goal for Minneapolis to significantly reduce climate pollution by 2030 and become carbon neutral by 2050. It also includes plans to weatherize all homes, reduce utility bills, promote green job training, and plant more trees.
Beginning with Mayor Frey’s 2024 budget, $10 million will be invested each year to the CLI, which triples previous climate work investments. These funds are in addition to current climate funding.
“We’re committed to reducing the impact of climate change in our city and doing our part locally in this global crisis,” said Health Commissioner Damōn Chaplin. “Through the Climate Legacy Initiative, we’ll provide community members with financial assistance to install more energy-efficient systems, insulate and weatherize homes, add solar energy, and plant more trees. Providing these services keeps Minneapolis on the leading edge for reducing greenhouse gases and reaching city carbon neutrality by 2050.”
"The Climate Legacy Initiative creates potential to reduce carbon emissions while increasing energy affordability, specifically among Minneapolis residents who haven't historically had the means to invest in such improvements,” said Chris Duffrin, President of Center for Energy and Environment. “In partnership with this initiative, we are excited to continue helping the city's residents to strengthen their homes' efficiency through weatherization and cleaner, more efficient heating systems."
“It’s been a privilege to work with the City of Minneapolis as they set out to achieve the City’s accelerated, equitable climate action goals,” said Gustavo Sandoval, Senior Project Manager at Elevate. “We look forward to not only helping them achieve their goals but also inspiring other Midwest cities in the process. The City has served as a national leader in climate innovation, we congratulate them on serving their community and being an inspiration to the region. We look forward to working together.”
“Frontier Energy is grateful for the opportunity to partner with the City of Minneapolis to achieve greater energy efficiency and sustainability for Minneapolis businesses and residents. The City’s funding will help enable the intelligent use of energy today for a more resilient tomorrow,” said Frontier Energy.
Funding for the CLI will be raised via gas and electric utility franchise fees. For the typical Minneapolis household, the franchise fee increase will cost an additional $12 a year, or $1 a month, on average. This funding will go directly back to the ratepayers to lower energy bills, make energy efficiency improvements, and more.
Complete funding for the CLI and Climate Equity Plan will come from a variety of sources, including federal IIJA and IRA funds, state dispersion of federal funds and 2023 legislation, utility conservation and renewable energy incentives, and city revenue tools.
Public safety was large focus of the newly adopted Minneapolis city budget resulting in millions of dollars for the Minneapolis Police Department to bolster its ranks while also funding community-based public safety alternatives.
The Minneapolis City Council last week adopted Mayor Jacob Frey’s $1.8 billion 2024 budget after nearly 50 amendments shifting around almost $30 million. The mayor’s main priorities included large investments in affordable housing, climate action and economic inclusion efforts.
“Our residents want a safe community, thriving small and local businesses, actionable progress on the climate crisis, and an affordable place to call home,” Frey said following its adoption. “These are things we can and will deliver on.”
Police budget
The new budget fully funds the charter-mandated amount of 731 sworn officers, though that doesn’t guarantee the department will reach that figure due to trouble in recruitment and retention. The department has been hovering under that number in recent years due to a wave of resignations, retirements and leaves following George Floyd’s murder at the hands of then-MPD officer Derek Chauvin.
The budget includes funding for eight classes of new recruits in an effort to boost police ranks. It also allocates $2 million for 15 new civilian positions within the department to help with administrative and investigative efforts, as well as more than $7 million for overtime hours and contracts with other law enforcement agencies.
An additional $16 million is reserved for the consent decree and state settlement agreements with the federal and state governments, respectively. Both the Minnesota Department of Human Rights and the U.S. Department of Justice, in separate investigations, found that the department had engaged in years of racially discriminatory policing.
The budget will fund 34 positions within MPD, and the city’s civil rights and information technology departments to help implement the measures within the agreements.
In addition to police, public safety alternatives also received boosts in funding.
The city’s Behavioral Crisis Response unit, which has been touted as a success towards a future beyond policing, gets an expansion with $2.9 million in ongoing funding. The increase for the unarmed unit – which responds to calls involving individuals experiencing mental health crises – is a win for advocates of public safety alternatives following struggles by the city to adequately fund the program.
The Department of Neighborhood Safety, which now houses the city’s violence prevention programs, receives $3.3 million to further fund those efforts. That includes a pilot program with unarmed “safety ambassadors” in various neighborhoods, as well as existing violence interrupters, who go into high-crime areas around the city in an effort to de-escalate and prevent incidents from happening.
The new budget also funds an interim safety center for Third Precinct residents to file reports and get information, a temporary solution as officers move into the location for the new building chosen and approved last month. The original building burned down amid the unrest after Floyd’s murder.
Lastly, the Office of Community Safety will get funds to fill three new positions to help implement pieces of the Safe and Thriving Communities plan, the new years-long public safety roadmap meant to help the city establish a system that goes beyond policing.
Today, Mayor Jacob Frey’s 2024 budget was adopted by the City Council. This budget marks the mayor’s first full, two-year budget cycle and shows the product of a collaborative effort between the mayor’s office, the budget team, City staff, and the City Council.
At the start of the budget process this year, Mayor Frey consulted Council Members to collect input around their priorities for this budget. The mayor invited the council to partner in this process in May and received feedback and specific priorities from all 13 Council Members. During the mayor’s budget address on August 15, he thanked the Council for their collaboration and outlined how their priorities made it into his recommended budget.
The 2024 budget includes significant investments in the City’s record-setting affordable housing production, a historic level of funding for public housing, strategic inclusive economic recovery work, and alternatives for public safety strategies and police reform. The budget also triples funding for climate action work across Minneapolis and allocates historic funding for the health of the city’s parks and public water systems.
Mayor Frey’s 2024 budget totals $1.8 billion, with a tax levy increase of 6.2% – which is the exact levy increase he promised last year as a part of the biennial budget process.
“Through this budget, we're positioning Minneapolis for progress on both courageous, new work and bedrock government service,” said Frey. “Our residents want a safe community, thriving small and local businesses, actionable progress on the climate crisis, and an affordable place to call home. These are things we can and will deliver on. This budget lays out generational investments in the city we love – for residents who call Minneapolis home today and for those who will call it home years from now. I want to thank our entire budget team for their work on this, especially Chief Financial Officer Dushani Dye and Budget Director Jayne Discenza.”
“This budget is a product of a lot of collaboration and hard work on behalf of our Minneapolis residents. I am grateful to our budget team, City staff, the mayor, and council members for their continued partnership,” said Dushani Dye, Chief Financial Officer of the City of Minneapolis. “With this budget, we are making innovative and strategic investments that are fiscally responsible – improving the lives of those who call Minneapolis home. This is a budget that supports new ideas and exciting visions and is something we can all be proud of.”Highlights from Mayor Frey’s 2024 budget:
Affordable and Public Housing
Climate and Public Health
Invests $10 million annually into the Minneapolis Climate Legacy Initiative to support the City’s climate goals over the next decade, tripling previous climate work investments
This investment includes: $4.7 million toward weatherizing all homes in Minneapolis, $1.4 million in workforce training, and $850,000 in the City’s tree canopy program
Puts forward nearly $3 million to address the opioid crisis, including for culturally responsive treatment facilities, new programming, and additional staff
Invests $500,000 into Turning Point, a nonprofit on the Northside that provides culturally specific behavioral health services and training
Adds nearly $1 million to a medical mobile unit that will travel around the city to provide opioid treatment and services to residents
Adds $730,000 to go toward Electric Vehicle Charging stations across Minneapolis
Economic Inclusion
Community Safety and Police Reform
City Capacity and Performance
New York, November 29, 2023- Moody's Investors Service has affirmed the City of Minneapolis, MN's Aa1 issuer and general obligation unlimtted tax (GOUL T) ratings. The ouUook has been revised to positive from stable. The city had approximately $875 million in GOULT debt outstanding at the dose of fiscal 2022.
RATINGS RATIONALE
The Aa1 issuer rating reflects the city's position at the center of a large regional economy that benefits from consistenUy low unemployment, strong labor force participation and solid full value per capita. The rating also considers moderate leverage, and strong liquidity supported by very stable financial operations as result of forward looking management and stable revenue base.
The Aa1 rating on the city's GOULT bonds is at the same level as the issuer rating based on the city's full fatth and credtt pledge and availability of an unlimtted property tax for debt service.
RATING OUTLOOK
The positive ouUook is based on improving credtt metrics induding growing full value per capita, strengthening resident income relative to the nation and moderation of leverage. It also incorporates out expectation that property tax revenues will remain strong and reserves ample even if certain segments of the tax base weaken such as comrnercia real estate. The rating may move upward if the city sustains tts strengthened position as cost pressures rise especially related to employee compensation and to bring public safety staffing to levels required in the city charter.
FACTORS THAT COULD LEAD TOAN UPGRADE OF THE RATINGS
- Continued positive trends in full value per capita and resident income
- Maintenance of ample reserves and moderate leverage while absorbing increased costs induding police staffing
FACTORS THAT COULD LEAD TOA DOWNGRADE OF THE RATINGS
- Significant draw on reserves
- Material increase in leverage or fixed costs ratios
LEGAL SECURITY
Minneapolis' GO bonds are backed by the city's full fatth and credtt pledge to levy a dedicated property tax unlimtted a to rate and amount. The bonds are additionally secured by statute.
PROFILE
The City of Minneapolis is located in Hennepin County (Aaa stable) in eastern Minnesota (Aaa stable) and is directly west of St. Paul, wtth the Mississippi River creating the border between the two cities. With a population that exceeds 420,000 residents, it is the largest city in the state. Governmental services primarily consist of police, fire, health services, public works and general governmental functions. The city's major enterprise funds indude sanitary sewer, stormwater, water treatment, municipal parking, solid waste and community planning.
METHODOLOGY
The principal methodology used in these ratings was US Cities and Counties Methodology published in November 2022 and available at
https://ratings.moodys.com/rmc-000.1ments/386953. Alternatively, please see the Rating Methodologies page on
https://ratings.moodys.com for a copy of this methodology.
REGULATORY DISCLOSURES
For further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found on
https://ratings.moodys.com/rating-definitions.
For ratings issued on a program, series, category/dass of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequenUy issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exdusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the issuer/deal page for the respective issuer on https://ratings.moodys.com.
Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating ouUook or rating review.
Please see https://ratings.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.
Please see the issuer/deal page on https://ratings.moodys.com for additional regulatory disclosures for each credit rating.
Bond rating agencies S&P Global and Fitch Ratings have assigned the highest credit rating possible to the City of Minneapolis, reflecting strong confidence in the City’s financial health ahead of a bond sale later this month.
“The upgrade to ‘AAA’ from ‘AA+’ reflects Fitch’s belief that the City’s long-term liability burden will remain moderately low over time driven by moderate future borrowing plans, statewide pension reforms and strong trends of population and income growth,” the rating agency noted. “The ratings also incorporate the City’s strong revenue growth prospects driven by an expanding population and income levels, broad independent revenue-raising ability, and solid budgetary management that has resulted in healthy reserves and considerable gap-closing capacity.”
This is the first time since 2016 that the City has gone to market with AAA ratings from both Fitch and S&P Global rating agencies. The City plans to sell $113.85 million in bonds within the next few weeks and these high ratings affirm the City’s creditworthiness and provide confidence to the bond holders. This also allows the City to borrow funds to finance critical capital projects at a lower interest rate and save taxpayer dollars.
The City goes through an extensive review process with the rating agencies where they evaluate factors such as the strength of management, the City’s institutional framework, financial policies, the amount of debt, long-term financial planning, current economic conditions and the amount of reserves the City has to withstand any unexpected revenue loss.
“This achievement is thanks to the incredible work of our Finance Department, led by CFO Dushani Dye,” said Mayor Jacob Frey. “We are committed to continuing smart fiscal decisions to ensure the long-term health of the city – and this rating upgrade is proof that our work is paying off.”
“We are thrilled with the outcome this year as we have worked hard during the last three years to get the agencies to see and validate the City’s efforts to effectively plan and manage City’s financial resources,” said Dushani Dye, the City’s chief financial officer.
Today, Mayor Jacob Frey and the City of Minneapolis announced a $5.8 million investment in the Minneapolis Homes program. A staple in Mayor Frey’s affordable housing portfolio, Minneapolis Homes increases affordable homeownership opportunities across the city and helps residents access, create, and sustain affordable homeownership while eliminating racial disparities.
Today, the City Council unanimously approved the multi-million-dollar investment, and the mayor will soon sign and approve the action. This investment will allow the City to convert 21 vacant lots or buildings into 40 affordable homes. Through the Council approval, an additional 18 project sites were awarded exclusive development rights with future plans for an additional 47 affordable homes.
“The quickest way to build generational wealth is through homeownership,” said Mayor Frey. “We know historically, our Black and Brown communities have been red-lined out of neighborhoods – and pushed away from the opportunity to buy and own a home. Through the 2040 plan and the Minneapolis Homes program, we have changed that trajectory and have been helping our BIPOC families and residents access and buy a home to call their own. Thank you to our City staff and community partners who continue to show up and do this life-changing work for our residents.”
“I always love seeing the ways we are increasing perpetually affordable homeownership and opportunities for our residents,” said Council Member Jeremiah Ellison. “This is the second year in a row that we are seeing a large number of Northside homes going through this program. This is one solution to help individuals achieve homeownership. As one of the Northside councilmembers, it is always exciting to see the City put so much effort into solving issues on the Northside.”
Minneapolis Homes is an umbrella program with products that help households access and sustain affordable homeownership in Minneapolis. Minneapolis Homes was created with the vision of eliminating disparities in homeownership so that all families have access to the wealth-building opportunities that homeownership provides.
Through the sale of City-owned property and financing, Minneapolis Homes generates affordable ownership units, assists households in obtaining homeownership, and supports homeowners in maintaining their houses. The program also provides tools that Minneapolis residents can use to locate the housing that best suits their requirements and works to develop long-term solutions to address our city’s housing needs.
With today’s approval of $5.8M in funding awards to small and emerging developers, Minneapolis Homes has funded 220 affordable homeownership units over the past few years. Between 2020-2022, the Minneapolis Homes program yielded positive results including:
Additionally, over 10% of units will be built to Net Zero or Passive Home standards, helping Mayor Frey and the City achieve climate equity goals.
“Our incredible CPED staff have been driving on the goals laid out in the Minneapolis 2040 plan, making sure that our residents can access affordable, safe, and stable housing,” said Erik Hansen, Interim Director of the Community Planning and Economic Development department for the City of Minneapolis. “Minneapolis has made significant investments in affordable housing work over the past couple years, and the positive results speak for themselves. We are seeing record-setting rental affordable housing production year-over-year and our Minneapolis Homes program is leading the way for BIPOC homeownership across the city. I want to thank Mayor Frey for his ongoing commitment to affordable housing and the City Council for passing this new Minneapolis Homes funding.”
“Addressing the racial homeownership disparity gap requires a collective community effort,”said Elfric Porte, Housing Director for the City’s Community Planning and Economic Development department.“We thank our community partners who are working with us to build affordable ownership opportunities for Minneapolis residents and supporting our 75% rate of service to BIPOC households. We will continue this critical work thanks to the support of Mayor Frey, City Council, and funding partners.”
Housing prices are increasing at an alarmingly higher rate than incomes, making homeownership out of reach for most households particularly low to moderate-income households. Funding the Minneapolis Homes financing program will provide development gap assistance to make affordable ownership opportunities happen.
In addition to City funding, sources leveraged for the Minneapolis Homes program include federal funds (HOME, CDBG, and American Rescue Plan Act), state funds from Minnesota Housing, county dollars from Hennepin County, and private capital from local developers, organizations, and area banks.
Find more information on the new Minneapolis Homes investment.
The Minneapolis City Council approved the City’s Climate Equity Plan today, furthering the City’s ambitious health and sustainability goals, while keeping Minneapolis on the leading edge for reducing greenhouse gases and reaching city carbon neutrality by 2050.
“The Climate Equity Plan gives us the vision and aspirational targets based on science,” said Deputy Commissioner Patrick Hanlon, Minneapolis Health Department. “We all need to work together as a community with an equity focus to reach these high and necessary goals.”
“I am in full support of the Climate Equity Plan. I am so proud of the City’s Health Department staff and community members who collaborated to develop this thorough and ambitious plan to address climate change,” said Council Member LaTrisha Vetaw (Ward 4.) “I look forward to working with City staff and the community to move this plan from paper to reality.”
**Making your voice heard
**By creating a Climate Equity Plan for all, the City strives to achieve an environmentally just, resilient, low-carbon and equitable city. Community member, partner, and stakeholder input was crucial in creating the final plan.
During the public comment period (April 19-June 5), the Health Department received more than 1,000 responses with more than 1,800 comments. The top three comments were:
The top five topics of importance included:
Environmental justice and equity
Climate change significantly impacts underserved communities, including our Green Zones. The City seeks to improve the health and well-being of those living in Green Zone communities who are disproportionately impacted by pollution, racism, poverty, and other factors. The Climate Equity Plan will:
**Results from feedback
**As a result of the feedback, the final plan includes:
**Reducing impact on climate change
**By working together, reducing climate change will become reality. The seven strategies that will be prioritized to achieve the planned outcomes by 2030 are:
Today, Mayor Jacob Frey announced the creation of his Climate Legacy Initiative (CLI), a plan to fund the City of Minneapolis’ aggressive climate goals over the next 10 years, hoping to become one of the most sustainable cities in the nation. The CLI officially takes off after year-long conversations with community members, grassroots advocates, nonprofits, unions, utility companies, and business representatives.
The CLI is an innovative way to achieve the City’s accelerated, equitable climate action goals. Through the CLI, Mayor Frey is proposing adding an additional $8 to 10 million into climate action work each year, starting with the 2024 budget. This funding would triple the City’s investment in climate work and would be in addition to ongoing climate funding and any other new climate funding proposed in next year’s budget.
“One-third of Americans currently live under extreme heat advisories which means there is no time to waste when it comes to advancing our climate goals,” said Mayor Jacob Frey. “This must be an all-in effort to reach our renewable energy goals because lives depend on it. We must think of ourselves not only as the mayors, council members, and advocates of our residents today, but as the mayors, council members, and advocates of those that are not here yet. This is about our collective future, and about acting today to protect it.”
“The climate crisis is here, and it’s going to take all of us to address the harmful impacts,” said Majority Leader Jamie Long. “I’m thrilled to see Mayor Frey announce bold climate action and set ambitious goals just like the Minnesota Legislature did this year. The new state budget includes resources to make this plan a reality. When federal, state, and local leaders work together, big things are possible.”
This is a historic investment in the ongoing climate work at the City, and the critical CLI funding will be raised via gas and electric utility franchise fees. The last time the City increased these utility franchise fees was in 2017 with a $3 million increase. Today, the mayor announced his plan to increase the fees by $8 to 10 million each year, resulting in an average cost of just $8-12 per household, per year. This funding will go directly back to the ratepayers to lower energy bills, make energy efficiency improvements, and more.
The CLI will help provide the necessary funding to implement the City’s Climate Equity Plan, which provides a roadmap for climate work over the next decade. The community-wide plan sets a goal for Minneapolis to significantly reduce climate pollution by 2030 and become carbon neutral by 2050. It also includes plans to weatherize all homes, reduce utility bills, promote green job training, and plant more trees.
Complete funding for the CLI and Climate Equity Plan will come from a variety of sources, including federal IIJA and IRA funds, state dispersion of federal funds and 2023 legislation, utility conservation and renewable energy incentives, and city revenue tools.
The CLI will be authored by Council Member Lisa Goodman and Council Member Aisha Chughtai and co-authored by Council President Andrea Jenkins and Council Vice President Linea Palmisano.
“Addressing climate change is one of the most pressing issues of our time,” said Council President Andrea Jenkins. “It’s critical that we center the voices and needs of our Black communities and communities of color who experience the worst impacts of climate change and climate disaster. I look forward to working with all of our partners and impacted communities in meeting our shared sustainability goals.”
“We heard loud and clear that innovative actions are needed to combat our climate crisis and that a dedicated funding source would be needed to make those ideas a reality. That’s what the Climate Legacy Initiative is all about -- setting us up for equitable climate action work here in Minneapolis and to be a leader in the country on this work,” said Council Vice President Linea Palmisano. “What has been announced today is only a start. There will be a continuous process of creating new programming to meet our changing needs. I am particularly excited for the opportunities of workforce development and good jobs that this brings to our City. Our City staff has done a great job giving us the framework, now it’s up to us to make it happen.”
“The climate equity plan is a bold and forward-thinking response to climate change in our city,” said Council Member Lisa Goodman. “Now we need to fund programs to start the work of reducing the use of fossil gas, better insulating all housing, and incentivizing alternatives such as distributive solar. This action allows for a funding path to move forward, and I am proud to author an action that will start implementing the climate equity plan.”
The groups MN350, Unidos MN, ISAIAH, and SEIU – Local 26 said, "As a coalition we have stood up to demand action on climate change because we see the consequences of inaction every single day. Our members, especially communities of color, are already facing the impacts of the damage caused by big polluters who put their profits ahead of our health and the future of our planet. We still have a lot of work to do, but this funding is a good first step for the city of Minneapolis to be a leader in addressing climate change and making sure our city, state and country are leaders, co-governing with community, in protecting our planet for future generations."
“LIUNA members work hard every day to build and maintain our infrastructure and the electric and natural gas systems that power and heat homes and businesses across Minnesota, alongside brothers and sisters in other skilled trades,” said Kevin Pranis, Marketing Manager of LUINA Minnesota and North Dakota. “As the City of Minneapolis rolls out an ambitious action plan focused on climate equity, we appreciate the commitment of Mayor Frey and Council members to securing a just energy transition, and to maximizing opportunities to create family-supporting union jobs and career pathways. We look forward to collaborating with the City to deploy the innovative efficiency and energy technologies and environmental controls needed to clean our air and water and reduce our climate footprint.”
Climate action at the City
Over the past decade, the City has made extensive progress in addressing climate change and reducing greenhouse gas emissions. During Mayor Frey’s State of the City Address in April, he announced the City had already reached 100% of its renewable energy goals for city-owned buildings. Since 2018, the City has saved $120 million in energy costs through climate work, while supporting more than 3,7000 low-income residents and businesses.
The City also has several other initiatives in the works for the next two years to meet its renewable energy goals. These include: