Understanding Affordable Housing Planning Requirements

Metro Area Cities Are Required to Plan to Produce Their Fair Share of Needed Affordable Housing.

Since the 1970s, Minnesota law has required Twin Cities metropolitan area municipalities to plan for the development of affordable housing, pursuant to the Metropolitan Land Planning Act (MLPA).  Minn. Stat. § 473.859.  The MLPA requires that cities adopt new comprehensive plans every ten years, and that they submit such plans to the Met Council for review and comment.  One part of the comprehensive plan is the housing element.  The housing element must contain

"standards, plans and programs for providing adequate housing opportunities to meet existing and projected local and regional housing needs, including but not limited to the use of official controls and land use planning to promote the availability of land for the development of low and moderate income housing."

§ 473.859 subd. 2 (c).  Not only must cities set aside an appropriate amount of land, they must adopt a "housing implementation program".  § 473.859 subd. 4 (3).  The housing implementation program must "describe public programs, fiscal devices, and other specific actions…which will provide sufficient existing and new housing" to meet the local government's share of the regional need for low and moderate income housing.  Id. 

On its face, these provisions impose rigorous and ambitious obligations on all metro area cities, including not only zoning enough land to actually meet the full regional need, but adopting programs to ensure the housing gets built.

However, cities have interpreted these provisions more modestly in light of the perceived realities of attempting to fill the large unmet need for affordable housing.  In a recent survey of metro area planning officials  by the Center for Urban and Regional Affairs, most would not commit to using the Metropolitan Council's assigned share of new regional need in their new comprehensive plans.  See "Initial Conclusions from CURA Survey Data." It is the Council's job to provide cities with guidelines on how to write their comprehensive plans, and then to review the plans once drafted.  This has meant the Council decides what is the regional need for affordable housing and how that need should be distributed among cities.  It is the purpose of this website to provide citizens with the ammunition they need to challenge those cities which have in the past have failed to live up to their legal obligations and made little effort to their fair share of the region's affordable housing need. 

Multiple Approaches To Regional Affordable Housing Goals

The Metropolitan Council's approach to meeting its obligations under MLPA has varied over the years.  In the 1970s, the Council took an aggressive approach, issuing housing goals for each city that probably came closer to meeting the need than any efforts since then.  This also occurred at a time when other favorable factors were present:  substantial federal housing funding, and the Council's ability to use its authority to comment on cities' applications for federal funding to motivate cities to pursue affordable housing.  In any event, during this period the Twin Cities were more successful in building and dispersing affordable housing throughout the metro area than nearly anywhere else in the country.

By the time of the next wave of comprehensive plans in the 1980s, Council policy had changed, with housing goals considerably de-emphasized.  In turn, comprehensive plans generally reflected little attention to guiding land for affordable housing. 

In the 1990s, the winds shifted slightly.  Amid widespread attention to the phenomenon of increasing poverty in the central cities while economic wealth flowed to suburbs with exclusionary housing practices, the legislature debated fair housing bills designed to promote more affordable housing in the suburbs.  In 1995, after the Governor had repeatedly vetoed strong fair housing bills, the legislature crafted compromise legislation known as the Livable Communities Act (LCA).  Minn. Stat. § § 473.25-.255.  Under the LCA, cities could qualify for various funds administered by the Met Council if they first negotiated housing goals with the Council.  The idea was not to mandate housing goals, but to provide carrots to induce greater housing production.

The LCA left the details of the goal setting negotiations to the Council, which decided to forego a needs-based approach and instead base each city's housing goals on a standard designed to make that city comparable in performance to its peer cities within its geographic portion of the metro area.  On that basis, the Council successfully negotiated housing goals with nearly every sizeable city in the metro area.  Cities committed to best efforts to achieve numerical goals for both affordable rental housing and affordable for-sale housing to be produced over a 15-year period, from 1995-2010.

The problem was how to square these negotiated LCA housing goals with the independent and mandatory legal duty cities had to plan for their share of the regional housing need under MLPA.   Under MLPA cities were supposed to be rewriting their comprehensive plans, including housing goals, by 1998.  Those goals, by law, were to be based upon each city's share of the regional need.  The LCA goals which had just been negotiated, however, were unrelated to need, and were generally regarded as fairly modest goals.  To resolve this conflict, the Met Council issued new MLPA guidelines to cities advising them that LCA goals could be used for the housing elements of their 1998 comprehensive plans.  See article, "Enabling Exclusion," for more detail.

This caught the attention of several affordable housing advocacy groups.  These groups noted that the region was in the throes of a crisis around a shortage of affordable housing, and that there was a need for the Met Council and cities to promote more low cost housing, not less.  In their view, the Met Council was violating MLPA by telling cities they did not need to plan for their share of the metro need for affordable housing, but could get by with the considerably smaller LCA goals.  These groups filed suit to try to compel the Met Council to follow the letter of the MLPA law, and direct cities to base their plans on the housing that was really needed.  In 2003, the Minnesota Court of Appeals ruled in favor of the Met Council on most issues, holding that the Council had the discretion to substitute LCA goals for need-based goals.  Alliance for Metro Stability, et al, v. Metropolitan Council, et al,  671 N.W. 2d 905 (Mn. App. 2003).

Current Planning To Address Future Housing Goals

Fast forward to late 2005 and yet another evolution in the direction given to cities on housing obligations.  It was now time for cities to begin thinking about how they would rewrite their comprehensive plans for 2008, which meant it was time for the Met Council to issue new MLPA guidelines.  The circumstances this time were somewhat different, however.  Current LCA goals were set to run until 2010, whereas the new MLPA housing goals were to cover the period 2010-2020.  Thus, the Council concluded that there was no need to conform new MLPA goals to the current LCA goals.  Instead, the Council decided to return to a need-based approach.

The Council decided to focus goals on new housing that would need to be built to accommodate the projected increase in households needing affordable housing during 2010-2020.  As a result, the goals exclude consideration of the approximately 170,000 metro area low and moderate income households inadequately housed at the start of this decade and of the additional thousands of households who will become inadequately housed by the end of the current decade.  See, "Dimensions of the Metropolitan Area's Affordable Housing Needs."  The Council's reasoning is that these households are for the most part currently housed; the problem is that they are paying more than they can afford.  In this view, the problem is not that more housing needs to be built, the problem is the affordability of what exists.  The Council chose simply to not address that issue.  In summary, the Council's new approach is to return to need-based goals, but to define need in a highly circumscribed fashion.

How do the Council's new 2010-2020 MLPA goals compare with the current LCA goals?  The comparison is somewhat apples to oranges.  On the one hand, the aggregate number of affordable units produced by LCA goals is greater than the aggregate total of the new MLPA goals.  On the other hand, the Council has chosen to target lower income levels with the new goals.  Under LCA, goals are set at housing affordable to households at 60% of area median income for rental units, and at 80% of area median income for ownership units; the new MLPA guidelines will make no distinction between rental and ownership units, but will simply define affordable units as those affordable to households at 60% of median.  See a detailed comparison here.

Meanwhile, we are still operating in a time when cities' obligations are controlled by their LCA goals.  The article titled "Cities plan for future housing goals while lagging on current ones" demonstrates that as of 2005, when cities were 67% of the way through the fifteen year LCA program, those cities with LCA production goals had produced only 35% of the required ownership units and 27% of the rental units.  Overall, the region's production was slightly better, but only because Minneapolis and St. Paul, which had no LCA goals, had produced thousands of units. What happens if a city fails to meet its LCA goals?  It's not clear if there will be a consequence, and the Met Council does not appear to have addressed this issue.

The paradox is that the new MLPA goals for which cities are currently writing their plans are simultaneously modest in comparison to the need, and ambitious in comparison to past production trends.  The lack of political will to produce affordable housing demonstrated by the CURA survey is one major problem.  In addition, the article "Dimensions of the Metropolitan Area's Affordable Housing Needs,"  demonstrates that current levels of financial contributions will lead to production of affordable housing falling short of need by about 50,000 units over this decade and the next.  Clearly, simply doing affordable housing the way we always have in the past is no longer sufficient.  It is time for some new approaches if we are to meet even these fairly modest future goals.  See Potential Solutions for a description of some of these approaches.

Leveraging Affordable Housing Performance

There is one other way in which the Met Council encourages greater affordable housing production by cities.  As an agency which dispenses infrastructure funding to metro area cities, the Council has at times used its leverage in allocating that funding to achieve greater housing production by cities. 

In the 1970s and early 1980s, the Council achieved considerable success with internal policies it adopted known popularly as "policies 13/39".   Using what was known as A-95 review authority, the Council graded the applications municipalities submitted to federal agencies for various projects based on affordable housing efforts by those cities.  This provided considerable motivation to cities to score well on affordable housing, and the result was that during this period, the Met Council had what was probably the most successful record in the country of producing federally subsidized housing and of dispersing that housing throughout the metro area.

By the mid-1980s, the level of federal housing funding had fallen dramatically, and the Council lost it's A-95 review authority.  Although some tools remained to the Council, efforts to leverage the dispensing of funding to achieve housing goals were dropped. 

In the late-1990s, advocacy groups and others began pressing the Council to look for ways to restore this leverage.  As a result, in 2001, the Council adopted a new policy, referred to as "Guidelines for Priority Funding for Housing Performance." All cities and counties in the region are given a score by Council staff from 0 to 100 based on various criteria indicating good affordable housing policies and performance.  That score becomes one factor in the Council's evaluation of city and county applications for funding the Council dispenses.  The most prominent use of this policy has come with Council ranking of TEA-21 transportation projects.  Although the housing ranking is typically just one of a number of factors in determining which applications get funded and which do not, there are instances where a higher or lower housing score has made a difference. 

The Council should use this tool more aggressively, as it did in the 1970s, and apply it broadly  to LCA Fund and Smart Growth initiatives, MetroEnvironment Partnership grants, and other programs such as parks and open space. 

By late 2010, two things had happened, cities had completed their comprehensive plan updates under LUPA (including setting their affordable housing goals) and it had become time to set a new round of LCA affordable housing goals.  Rather than simply adopt the just completed LUPA housing goals as LCA housing goals, the Met Council chose to ratchet down LCA goals, to a level for most cities equal to 65% of their new LUPA goal.  See article, Met Council Establishes Two Sets of Housing Goals Starting in 2011, for more information.




Housing Preservation Project, Updated March 2011
Bookmark and Share

Housing Justice Center Hubert H. Humphrey Institute of Public Affairs Institute on Race & Poverty The McKnight Foundation
 Click for Sponsor Websites