Commentary: Minneapolis 2040 and the Perils of Environmental Reviews

Minneapolis Skyline

Over the past several weeks, Minneapolis has garnered its fair share of media attention for the progress made in stemming housing inflation, thanks to the city’s pro-housing 2040 Comprehensive Plan. As the city has shown, greater affordability options must be allowed, and the solution is housing abundance; affordability cannot be imposed by mandate. 

All of that is now on hold as a Hennepin County district court judge has officially put an end to the Minneapolis 2040 Plan, giving the city 60 days to revert to the 2030 Plan. 

A twist of irony here is that the new homes that are now blocked would be much better for the environment than the homes the lawsuit was intended to protect.

Minnesota’s construction industry excels in producing the most energy-efficient homes in the nation. In a city like Minneapolis, where the homes being replaced predate contemporary stormwater regulations and energy codes, all new housing would undoubtedly be a considerable environmental improvement.

It’s important to note that environmental concerns may not be the sole motivation behind this lawsuit. Notably, California’s NIMBYs have effectively used environmental reviews to obstruct and block projects, prompting legislative action in California to address this issue. 

When Minnesota began adopting similar reviews, unrelated to the current lawsuit, homebuilders raised concerns that these environmental reviews could be used to hinder much-needed housing projects. Regulators reassured that these reviews were primarily enacted to preempt lawsuits from environmental advocacy groups against the state.

The untimely demise of the Minneapolis 2040 Plan is not just a cautionary tale; it’s another addition to the growing list of examples illustrating how entrenched policies can easily obstruct the creation of new housing. Opponents of new housing, particularly non-luxury and attainably-priced development, will utilize any available means to obstruct such projects. Large-lot single-family zoning, for instance, inherently perpetuates economic exclusion. Over time, as zoning has evolved into planned unit developments, additional fiscal tools have been designed to inflate housing prices, such as square footage minimums, parking mandates, aesthetic regulations, and impact fees, among others.

Minneapolis’ 2040 Plan underscores the critical importance of expanding by-right development opportunities to rebalance our housing ecosystems. NIMBYs have demonstrated their willingness to employ various tactics to obstruct new housing, resorting to lawsuits and environmental reviews when other methods fail.

The housing reform movement seeks to eliminate these roadblocks to the construction of much-needed new housing. This endeavor often resembles a game of whack-a-mole, with new barriers popping up the moment others are knocked down. 

Increasing by-right development options and exempting by-right and comp plan-compliant projects from environmental reviews at the state level would go a long way in ensuring this does not happen in the future.  

Nick Erickson serves as the executive director of the Housing Affordability Institute.