Frey, legislators tout new law designed to end 2040 Plan lawsuit

Minneapolis Mayor Jacob Frey, Council Member Aurin Chowdhury, legislators and developers gathered Tuesday on the rooftop of the Wakpada Apartments in south Minneapolis to celebrate a new state law exempting the comprehensive plans of metro-area cities from environmental legal challenges.

The law states that the broad plans that cities create to guide growth cannot be considered conduct that could lead to pollution or environmental destruction, as plans for specific projects may be. That means a six-year lawsuit that had repeatedly interrupted Minneapolis’ pro-density 2040 Plan is “functionally” dead, said Rep. Mike Howard, chair of the House’s Housing Committee. The plan made Minneapolis the first city in the nation to end single-family zoning.

“Without legislative action, this lawsuit was holding up the status quo [of exclusionary zoning],” said Howard, DFL-Richfield. “Nothing is more dangerous to addressing our housing crisis than the status quo, because it’s the status quo that has got us into this mess. We will not build the homes that we need to meet this moment without ingenuity at all levels of government.”

The Wakpada building was completed in 2022 by Hall Sweeney Properties and includes 8% of units affordable at 60% area median income; that would not have been possible without the 2040 Plan, developer Sean Sweeney said.

The liberated zoning restrictions for the property at Minnehaha Avenue and 46th Street, allowed him to build six stories with 126 units instead of four stories with 60 units. That difference balanced the project financially to allow for the inclusion of affordable apartments, Sweeney said.

“Without a doubt that being a developer in Minneapolis, especially now with the 2040 Plan, is an absolute dream,” Sweeney said.

The Audubon Chapter of Minneapolis, the Minnesota Citizens for the Protection of Migratory Birds and Smart Growth Minneapolis sued the city in 2018, arguing that the 2040 Plan could pollute natural resources and usher in gentrification and displacement, warranting a study to identify the environmental tradeoffs of densification. Nonstop injunctions, appeals and reversals since then injected chaos and uncertainty into development in Minneapolis.

The Minnesota Supreme Court decided in 2022 that citizens were entitled to challenging municipal comprehensive plans under the Minnesota Environmental Rights Act. But in May, the state’s Court of Appeals threw out a prior ruling halting the 2040 Plan’s pending environmental review. The appeals court allowed Minneapolis to immediately resume approving stalled projects, but city officials feared it would not last without a law change.

Six days later, the Minnesota Legislature passed Rep. Sydney Jordan’s comprehensive plan bill in the chaotic final hour of the legislative session as part of a 1,400-page omnibus tax bill.

“As a Minneapolis House delegation, all 11 of us were united and made this our No. 1 priority and stood strong to ensure that it was passed,” said Jordan, DFL-Minneapolis.

The lawsuit’s plaintiffs have petitioned the Supreme Court to reinstate the injunction against the 2040 Plan in part because of how it had been incorporated into the tax bill. A provision of the state constitution that was adopted in 1857 says legislators may not roll together bills on unrelated topics, in the interest of transparency.

The Minnesota Attorney General’s Office has filed a motion to defend the constitutionality of the new law.

Frey said the city would continue to fight the lawsuit if needed.

“When we recognized that we had a long-term issue with exclusionary zoning that segregated both people and neighborhoods, we knew that we had a lot of work to do to be more inclusive,” he said. “We are seeing right now some of the lowest rent increases in the entire country. That’s in part due to the supply increase that we’ve seen … and of course that’s due to the 2040 Plan.”