Minneapolis mayor's proposed budget focuses on boosting funding for affordable housing

In his first budget speech as Minneapolis mayor, Jacob Frey on Wednesday proposed a $1.5 billion 2019 budget that would slightly raise the property tax levy and use the additional revenue to fund affordable housing in the city.

"As our city's population continues to grow at a rate not seen since the early 20th century, Minneapolis is confronting an unprecedented affordable housing crisis," said Frey, standing at a podium at City Hall chambers with all council members present. "While neighborhoods across Minneapolis continue to feel the benefits of a growing economy, too many people in our city are not included in that growth."

Frey spoke for nearly 45 minutes and focused heavily on the lack of affordable housing in the city, promoting homeownership, protecting tenants' rights and strengthening police and community relations.

In 2018, Frey said the city received 16 applications from nonprofit developers seeking help from the city's Affordable Housing Trust Fund totaling $23 million.

"The good news is that people want to build affordable housing here in Minneapolis," he said. "The bad news is that this year we did not have the resources to support many of those requests."

To change that, Frey proposed $40 million in one-time and ongoing funding for a series of affordable housing programs. More than half that money will go toward the Affordable Housing Trust Fund, a program that finances the rehabilitation of low-income rental housing projects across the city.

"The old cliché is, 'Don't put off for tomorrow what you can do today,' " Frey said. "The reality is that we can't put affordable housing investments off till tomorrow because tomorrow is too damn late."

Frey also proposed raising the property tax levy — the amount of property tax the city collects — by 5.6 percent. In Mayor Betsy Hodges' budget last year, the levy increased by 5.5 percent.

The 5.6 percent levy would net an additional $1.4 million. Property taxes account for about a quarter of the city's budget.

"If your home value did not increase from 2018, this budget will result in a $55, or a 4 percent, decrease in the city's tax bill," Frey said. "If your home value increased by 10 percent, the annual increase will be $85, or 6.5 percent."

In an effort to support prospective black businesses and homeowners who continue to be "financially underserved and excluded," Frey proposed $500,000 for the Village Financial Cooperative, a black-owned credit union in north Minneapolis that would launch in 2019.

So far, the credit union has received $5 million in pledged deposits from businesses and individuals, according to Shiranthi Goonathilkaka, director of engagement for the cooperative. "Having this extra money [from the city] increases our chances toward sustainability," she said.

The budget doesn't add additional sworn officers to the Police Department, but Frey proposed $1.1 million to convert eight non-policing positions now held by sworn officers to civilian positions.

"Converting these positions not only frees up sworn officers to build better relationships," he said, "it also results in more efficient and cost-effective work done by individuals specifically trained and educated in their fields, like crime lab forensics, body-worn camera technicians and a new LGBTQIA liaison."

The budget proposal also includes $280,000 for a program that would expand the Police Department's co-responder program, which pairs officers with mental health professionals.

To give residents "some peace of mind," Frey proposed $200,000 for municipal identification cards that would be available to anyone in Minneapolis above the age of 14 regardless of their immigration status.

"Too many people right now are unable to obtain a primary form of identification — youth, immigrants, seniors who no longer drive, transgender people, and those who are experiencing homelessness," Frey said.

Council President Lisa Bender said shortly after the speech that the budget wasn't yet available for her to review, but that "the overall direction of the budget is in line with my own values and priorities of constituents in Ward 10."

Mukhtar M. Ibrahim • 612-673-4689