Minneapolis City Council fails to override veto of affordable rental housing ordinance

The Minneapolis City Council was unable to override Mayor Jacob Frey’s recent veto of an ordinance that would give some organizations first dibs on buying certain rental housing units in an effort to preserve affordable housing.

Under the proposal, if the owner of certain rental units wants to sell, they would have to give certain “qualified organizations” the first shot at buying their property, with exceptions for sales to renters or family members, for example.

Frey wrote in his veto letter that “now is not the time to make it harder to invest in our city’s housing stock.” He said while he agrees with the goal of preserving affordable housing, he doesn’t believe the ordinance will accomplish that in the current housing market.

“I appreciate the intention behind this ordinance, and in a different housing market when investment was more free-flowing, I may have a different perspective,” he wrote.

Supporters said the proposal would keep thousands of units of affordable housing available and prevent large investment firms from gobbling them up — and potentially hiking rents to reap profits.

The council voted 7-5 to override Frey, but needed nine votes.

Council Member Jeremiah Ellison, who co-authored the ordinance, argued when it was before the council on Oct. 31 that it would help small, local developers buy property that’s now being bought up by national investment firms or hedge funds.

Council Member Linea Palmisano said she was torn on the ordinance when it was before the council, saying the city has an affordable housing crisis, but that she was concerned about unintended consequences, such as whether first-time home buyers wouldn’t be able to compete. She voted for it then, but voted against an override on Thursday.

Council Vice President Aisha Chughtai said the proposal was similar to one approved in San Francisco in 2019, and since then, the city has preserved about 300 units.

Ellison worked on the proposal for years, and predicted the city will regret not passing it.

“Our residents will certainly suffer, and we’ll be able to trace some of our future failures to this moment,” he said. “This is no longer a place that embraces intelligent and innovative policy, but instead fights it vigorously.”

But he said he’ll get right back to work crafting housing policy.

The override was supported by Council Members Ellison, Emily Koski, Aurin Chowdhury, Katie Cashman and Jason Chavez, as well as Chughtai and Council President Elliott Payne.

The override was opposed by Council Members Andrea Jenkins, Palmisano, Michael Rainville, Jamal Osman and LaTrisha Vetaw.

Council Member Robin Wonsley was absent.