Minneapolis school board members on Tuesday are expected to detail their plans to close a $75 million gap for next school year. District leaders have signaled already that school nutrition and special education will be affected. Some layoff notices have already been sent.

Officials in recent months have also been examining the district’s building use for possible savings. They’ve estimated Minneapolis Public Schools is operating now at 65 percent of the enrollment the buildings could ideally support, though district leaders haven’t said whether they plan to close buildings.

Now the state’s fourth-largest district, Minneapolis has struggled for years with budget deficits driven largely by shrinking enrollment. Last year as the district faced an even larger budget gap of $110 million, it drew from its reserves, cut jobs and left nearly 5 percent of its open staff positions unfilled to make ends meet. Some of the cuts included positions in finance, human resources and cleaning staff.

Minnesota’s school funding system is based on a per-pupil formula, so when kids choose to learn elsewhere,the thousands of dollars in state and federal funds that go with them is spent elsewhere.

Student counts rose slightly this year to about 29,000 according to records collected by the state Department of Education, but that’s still down roughly 20,000 students from 2000. The district also took a significant enrollment hit during the COVID-19 pandemic.

Earlier this week, district leaders said they were planning cuts to special education assistants and were restructuring school nutrition sites, but were attempting to avoid getting rid of major programs that students interact with directly. 

“Funding for some school-based programs and staffing may see slight declines but we are pleased to share that there are no complete eliminations proposed to student-facing programs in school allocations,” Deputy Superintendent Ty Thompson told board members on Tuesday.  

School budgets struggle across Twin Cities region

While the Minneapolis district struggles are well-known, a recent survey of Twin Cities area school districts shows many other school systems struggling to close gaps.

The survey by the Association of Metropolitan School Districts shows all but a few districts dealing with deficits, many in the millions of dollars. 

Added together, districts expect to see a shortfall of $280 million. That would slip to $264 million if Gov. Tim Walz’s budget proposal is approved. Those numbers are slightly better than the more than $300 million in expected shortfalls districts reported last year.

St. Paul, now the state’s second largest district behind the Anoka-Hennepin schools, faces a $51 million shortfall.

Minneapolis school leaders say they are moving forward with budget plans, although board members worried aloud recently about what might happen if the federal government cuts spending on special education or Title 1 — funding that supports children from low-income homes. 

“What would be the reality if Title 1 is taken away?” board member Adriana Cerrillo asked at a recent meeting. “I hope that we are thinking about that.”

“We are monitoring,” said Ibrahima Diop, the district’s chief financial officer. “It would be devastating across the country … we would have a budget shortage of about $25 million that is right now in schools.”

Copper wire theft continues to be a growing issue in Minneapolis, leaving residents in the dark both near Lake of the Isles and in Stevens Square.

“It’s been hard with the darkness,” said Arden Haug, pastor of Lake of the Isles Lutheran Church.   

 Most of the lights surrounding Lake of the Isles Lutheran Church have been dark for months.

“We’re concerned when people walk out and there is complete darkness out here,” said Haug.

Haug said it is a safety issue and an especially big one during Lent.

“We told everyone to keep their Christmas lights on as long as possible,” said Haug.

“One night of theft equals about one week of public works repair to follow up on that theft,” Park Board Commissioner Elizabeth Shaffer told WCCO back in December.

Since then, Shaffer said the problem around Lake of the Isles has gotten even worse.

The city said it had repaired the lighting in both 2023 and 2024 around Lake of the Isles. However, the majority of the wire around the lake has once again been stolen.

Copper wire theft is also a problem in Stevens Square. Neighbors on Clinton Avenue said none of their streetlights work.

A spokesperson with the City of Minneapolis said eight blocks of the neighborhood have suffered streetlight wire damage and theft. All told, roughly 15 miles of below-ground wiring is missing throughout Minneapolis, according to the city, with streetlight wiring repair costs between $30,000 to $40,000 per mile.    

The city said they are testing ways to harden the bases of streetlights. They have also used aluminum wire for lights, marked with the message “no scrap value.”

Despite the markings, even those wires have been swiped.

“It would be great to have lights. We would also feel a lot safer at night because even though we can think that it’s a very safe neighborhood, there’s still carjackings, there are people that are concerned about every time they go out at night and park in this neighborhood,” said Haug.

In February, I wrote about how low and flat rents in Minneapolis were contributing to a slowdown in the city’s housing development. The city has built lots of housing in the past few years, in part enabled by recent zoning reforms, helping keep rents low. My main takeaway was that this was a good thing, especially to the extent that we could credit an expansion in housing supply for maintaining this level of affordability. 

I also included an important caveat: Although Minneapolis is pretty affordable, large gaps still remain. For the city’s lower-income residents, housing is still out of reach, reflecting the limitations of market-rate housing — without further public subsidy, housing can only get so cheap. 

Minneapolis’ affordability has a second caveat. While housing costs are quite low on average, patterns of housing affordability are uneven throughout the city. Different neighborhoods of Minneapolis have substantially different housing costs. And if we zoom out to the larger metropolitan area, spatial differences in housing costs are even more striking. This is an outcome of structural factors and should be seen as an important problem to address in the region. 

Uneven Geography of Housing Affordability

Last July, a Minnesota-based committee for the U.S. Commission on Civil Rights published a report on fair housing in the Twin Cities region. Much of the report’s focus was on “capital-A Affordable” housing, which relies on subsidies to set rents at restricted levels for moderate- and low-income residents. But the report also contained some useful information on market-wide levels of affordability. 

The figure below, from that report, shows affordability at the census-tract level in the Twin Cities, for a household earning 50% of the area median income ($71,500 for a family of four, $50,000 for a household with two adults). 

This map confirms that Minneapolis and St. Paul are quite affordable. In both cities, the majority of neighborhoods have lots of housing available for moderate-income households. 

Yet both cities have areas where affordability declines. In St. Paul’s Macalester-Groveland and Como neighborhoods, and much of the south and southwest of Minneapolis, relatively little housing is affordable to a household at 50% of the Area Median Income (AMI). This means that a family of four earning $62,450 would be hard-pressed to find housing in these areas without spending more than a third of their income on housing costs.

Furthermore, affordability in the Twin Cities suburbs almost immediately tends to fall to very low levels (although some suburbs, including Brooklyn Center and West St. Paul, have relatively more housing that’s affordable). 

Where You Can (and Can’t) Build Housing

These spatial patterns of housing affordability aren’t coincidental.

For example, the areas around Minneapolis’ chain of lakes — Lake of the Isles, Bde Maka Ska, Lake Harriet, Brownie Lake and Cedar Lake — have long been some of the most expensive and exclusive neighborhoods of the city. Parts of this area in Minneapolis, and some of the suburbs immediately bordering Minneapolis and St. Paul, had concentrations of racial covenants in the first half of the 20th century, restricting the race of potential homebuyers. These covenants have led to persistent long-term gaps in housing costs and quality, as well as the racial makeup, across neighborhoods. 

Soon after a Supreme Court case made these covenants unenforceable in 1948, many of the Twin Cities’ suburbs boomed as new freeways allowed residents (who were higher income, better educated and more likely to be white) to move out of the core city into more expensive enclaves. 

Today, zoning and land use regulations frequently restrict housing development in these areas, helping keep them expensive and beyond reach for many.

For example, look at Minneapolis’ built form rules, which govern the size of housing that can be built across the city. These rules were adapted as part of the city’s Minneapolis 2040 Comprehensive Plan. 

Areas with any type of “Interior” zoning limit the density to duplexes and triplexes — but these are mostly unfeasible to build due to a combination of regulatory and financial barriers, meaning that these areas remain mostly single-family homes. These built-form rules cover the majority of residential land in Minneapolis’ expensive South and Southwest sides.

The arterial streets in these areas, labeled as “Corridor” zones, have more successfully allowed denser housing, but not enough has been built to change the affordability landscape of these areas. Keep in mind, too, that moderate zoning changes can’t quickly undo many decades of exclusionary policy in a neighborhood.

In the suburbs, such rules are considerably more restrictive, and they help ensure that much of the area outside of Minneapolis and St. Paul remains exclusive — both inner-ring suburbs and jurisdictions further out. For example, as journalists MaryJo Webster and Michael Corey have documented, huge majorities of suburban residential land allow only single-family housing, while only relatively tiny patches of land allow for multifamily housing (note that this map is a couple years out of date, although the broad zoning landscape hasn’t changed much).

Both the origins and the implications of these rules tie closely to race and class. You can find the following sentence printed in an April 1975 edition of the St. Paul Reporter, St. Paul’s longstanding Black-run newspaper (today a part of the Minnesota Spokesman-Recorder). 

“Restrictive zoning plays a major role in keeping blacks out of the suburbs. They permit whites, who generally are better off financially, to practice a kind of social and economic discrimination that clearly is un-American.” 

These words ring true today.

Last April, I reported for the Minnesota Reformer on a rejected affordable housing project in Edina. The city’s mechanism for blocking this project was its zoning code. Although the development was aligned with Edina’s long-term comprehensive plan, which called for multifamily housing in this location, the city had not changed its actual zoning to allow for larger apartments. This gave Edina the leeway to stall the development, with full awareness that the developer would lose its affordable housing tax credits as a result. 

The resulting exclusion has been documented more systematically, too, playing out on a scale larger than any single housing development. As Webster, the journalist, documented in further research with housing economist Salim Furth, places in the Twin Cities zoned for single-family housing typically have much larger proportions of white residents. Additional research on minimum lot sizes, another exclusionary and costly housing regulation in many Twin Cities jurisdictions, has shown sharp socioeconomic divisions driven by these rules. Today, many different kinds of restrictive suburban zoning policies uphold unequal patterns across economic and racial lines. 

Looking Ahead

Minneapolis deserves credit for its successful efforts to increase housing supply through land use reforms. Any fair assessment of the city’s affordability would acknowledge that the city’s rents are quite low, as average housing costs are within reach for many people with moderate incomes.

At the same time, we shouldn’t let numbers that are pretty impressive on average obscure meaningful variation across neighborhoods. Certain areas of Minneapolis are not within reach for many of the city’s residents. Furthermore, Minneapolis’ affordability does not extend to its wealthier suburbs. 

These patterns have to do with longstanding historical patterns of racial and economic segregation. Restrictive land use policy is one of the primary tools upholding these historical patterns today, driving up average housing costs and giving cities a tool to control the development of subsidized affordable housing.

Reforming these rules to allow for more housing throughout the Twin Cities is the subject of a years-long effort in the Minnesota Legislature. Proposed changes include a variety of ways to allow more density in municipalities throughout the state and to reduce the scope for cities to make discretionary rejections of proposed housing developments. 

Some local governments, spearheaded by the League of Minnesota Cities, are strongly opposed to these changes. But every jurisdiction in the Twin Cities has a contribution to make when it comes to building more housing — both subsidized housing and lower-cost market-rate housing. Residents can’t afford to wait.

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