Zoning Reform in Minnesota

Minneapolis, Minnesota, earned itself a spot in the YIMBY (Yes In My Back Yard) pantheon for being the first city in America to end single-family-only zoning. The latest edition of Rent Free checks back in on how things have developed in the city and across the state.

Rule of Law Returns to Minneapolis Homebuilding

In 2018, Minneapolis passed Minneapolis 2040—a major update to its comprehensive plan that eliminated single-family-only zoning and parking minimums and allowed larger apartments to be built in more areas of town.

The city has been implementing the reforms piece by piece over the intervening years.

Cheerleaders of Minneapolis 2040 point to increasing apartment construction and flattening rents. Another metric of their success is increasing predictability in the development process.

Earlier this month, the City Planning Commission (CPC) released its annual report showing that the variances requested by builders have plummeted.

In 2020, builders asked the commission for 223 variances that would waive rules around parking standards, massing restrictions, height limits, and more. Last year, builders asked for only 63 variances.

Jason Wittenburg, a planner with the city planning department, says the “primary driver” of the falling variance requests was the “built form” regulations the city adopted in January 2021 as part of the Minneapolis 2040 comprehensive plan.

Prior to the zoning changes, builders were frequently asking for variances to build taller apartments in neighborhoods where the city’s comprehensive plan called for more housing, but where zoning rules blocked most denser development.

Now that those zoning rules have come into line with the comprehensive plan and the comprehensive plan has also been updated to treat housing more liberally, developers need far fewer variances. Wittenburg says this has added a lot of certainty for builders proposing projects. It’s also given neighbors a clearer idea of the kinds of projects that might be built next door.

A less ad hoc process lessens everyone’s view that some developers are benefiting from special favors. Zoning in Minneapolis is getting closer to approximating what some people call “the rule of law.”

As Minneapolis continues to get its house in order, the Minnesota Legislature is considering taking many of the city’s reforms statewide.

Zoning Reform: Minnesota Speed Runs the YIMBY Agenda

Working the way through the Minnesota Legislature are a series of bills that would eliminate parking minimums, allow at least two units of housing on all residential land (and four units in larger cities), shrink minimum lot sizes, legalize ADUs, ban aesthetic design requirements, and allow residential projects in commercial areas.

“This is fundamentally about choice,” says Rep. Alicia Kozlowski (DFL–Duluth), the author of the House bill allowing multi-family development in commercial areas.

Many of these policies were also part of the Minneapolis 2040 plan. A few are new ideas attempting to address some of the shortcomings of the city’s reforms.

“Minneapolis showed housing reform what is possible, but it also taught us some lessons,” says Nick Erickson, senior director of housing policy for Housing First Minnesota, a building trade association.

For instance, Minneapolis allowed three units to be built on formerly single-family-only properties. But its floor-area-ratio regulations, wonky rules that establish how much actual floor space can be built on a property, required new triplexes to be the same size as single-family homes. Few got built, as a result.

Minneapolis has since loosened its floor-area-ratio rules. The “middle housing” bill in the state Legislature would prohibit cities from imposing them in the first place—while still guaranteeing their ability to create height limits, setback rules, and the like.

One risk of doing zoning reform at the state level is that local governments, whose land use powers are being preempted, will still find ways to block new types of housing the state government is telling them they have to allow. This has characterized California’s efforts to legalize duplexes statewide, for instance.

Minnesota lawmakers are trying to head off this risk by directing state officials to write a model ordinance that automatically goes into effect if cities don’t update their zoning code to comply with new state standards or if the state determines a locality’s zoning update wouldn’t enable as much housing as the state’s model ordinance.

Much Ado About Environmental Review 

Minnesota’s YIMBY bills could bring Minneapolis’ reforms to the rest of the state. They could also bring them back to Minneapolis.

After they passed the Minneapolis 2040 plan, local activists filed a lawsuit against the city arguing that Minneapolis had failed to properly study the environmental impacts of its zoning changes.

Last September, a Hennepin County judge sided with activists and ordered the city to halt implementation of the Minneapolis 2040 plan in neighborhoods formerly zoned for only one- and two-family housing.

The lawsuit is ongoing. There was a hearing before a state appeals court last week. Meanwhile, the city is hedging its bets. The Star Tribune reports that the city has hired a consulting firm to start analyzing the environmental impacts of the 2040 plan.

The Legislature will also consider a bill, which has yet to be introduced, that would exempt comprehensive plan updates like the Minneapolis 2040 plan from the need to undergo environmental review in the first place. A similar measure was considered by the Legislature last year, but it failed to pass.

Local governments are typically skeptical of efforts to do zoning reform at the state level, arguing doing so improperly impedes their local control. Lawmakers say environmental review reform is one area where localities and YIMBYs have a lot of common ground.

“Cities really want us to address that. The current ruling has changed how comprehensive plans are supposed to be used,” says Rep. Larry Kraft (D–St. Louis Park), the author of the house version of Minnesota’s middle housing bill.

Zoning reform in Minneapolis originally published by the Reason Foundation. Republished with permission.

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