Why Legislators Want to End Minneapolis 2040 Lawsuit

Backers of a lawsuit to slow down implementation of a sweeping Minneapolis 2040 land use plan have been winning in the courts.

They may be about to lose in the Legislature.

Bills filed in both the House and Senate would amend current environmental law so that it can’t be used to challenge comprehensive plans like the Minneapolis 2040 plan that seek to increase urban and suburban population density. The bills make the change retroactive to before the Minneapolis plan was approved by the City Council in 2018.

The effect would be to make the lawsuit filed in 2018 by Smart Growth Minneapolis invalid and allow the city to ask a judge to dismiss it. House File 4028 and its Senate companion SF 4183 would also clarify state law going forward and make another batch of proposed housing density bills less vulnerable to legal challenges.

Rep. Mike Howard, DFL-Richfield, chairs the House Housing Finance and Policy Committee and said the bills will “make sure the cities have the ability to plan and move forward.”

“We believe it will have support from our cities and have support from our environmental community as well,” Howard said.

The Minneapolis 2040 plan is in some ways the model behind sweeping legislation introduced this session to require many cities and suburbs to allow “missing middle” housing and multifamily apartments in commercial zones. But sponsors of those bills fear lawsuits similar to the one in Minneapolis, which cites the landmark Minnesota Environmental Rights Act (MERA). Not clarifying MERA could delay the rollout of new housing types that increase density.

The housing density bills and the proposed changes to MERA, therefore, work in tandem.

“In our reading [of the Supreme Court ruling], the court told us to fix the language, so that is our plan,” said Sen. Lindsey Port, DFL-Burnsville, who chairs the Senate housing committee. She is also a prime sponsor of the housing density bills moving through the Legislature.

“The 2040 Plan is one of the various options around the state that cities are doing to understand that we need to densify, we need more housing, we need to think about this in a different way than we did 40, 50, 70 years ago when our neighborhoods were built,” she said.

The bills to remove the threat of litigation using MERA are meant to give cities in the seven-county metro area — not just Minneapolis — assurances that plans that increase density can’t be held up in court or trigger expensive environmental studies, sponsors said.

Supporters of the lawsuit say it serves as a rescue for the city after it lost key court rulings on the Minneapolis 2040 Plan.

“Because the City has lost in the courts with its argument that the Minneapolis 2040 Plan is not subject to the Minnesota Environmental Rights Act, it is asking the Legislature to amend that Act to make it inapplicable to the 2040 Plan,” John Goetz, the president of Smart Growth Minneapolis, said in an email. He said retroactively changing laws in the midst of litigation (the lawsuit is working its way through a second round of appeals) is rare and that he isn’t sure what legal remedies the group would have should the bill become law.

The 2018 lawsuit to block the Minneapolis 2040 comprehensive plan allowing for projects to increase population density in built-out parts of the city sought to require the city to conduct a review of the environmental impacts of the changes. Smart Growth Minneapolis asserted the review was required by MERA for any project or plan that could produce negative environmental impacts.

Unlike a bill introduced last session that would have exempted comprehensive plans from MERA, the 2024 version of the bill is more narrow. It includes a set of legislative findings that increasing urban and suburban densities is “beneficial to the environment and public health.”

Under this year’s version, a comprehensive plan adopted by cities and approved by the Met Council that increases residential density is beneficial and “does not constitute conduct that causes or is likely to cause pollution, impairment or destruction” as defined by MERA. Plans that increase density are deemed to be beneficial because they can prevent sprawl into land that sequesters carbon, provides habitat and preserves farmland.

Peter Wagenius, the legislative director for the Sierra Club North Star Chapter, said many environmental groups were uncomfortable with last session’s bill that exempted comprehensive plans in their entirety from MERA. The 2024 version exempts residential density from MERA but leaves open that comprehensive plans could be challenged on other grounds.

“The court has acknowledged there’s an incongruity … in the law. We are taking that as an invitation to resolve that incongruity,” Wagenius said. While the lawsuit was against the Minneapolis plan, Wagenius said suburban cities have expressed concern that they, too, could be sued if their plans attempt to increase residential density.

“They are saying, ‘Do something about this before the lawsuits arrive,’” he said. “Will this end all bad-faith litigation against cities? No. But it will prevent some and protect them and their ability to do their jobs.” He cited plans like Burnsville’s Heart of the City development and St. Louis Park’s West End that creates downtown-like environments as examples of what some suburbs are doing to address density as well as affordability and housing supply.

In an article for the American Planning Association, Alex Schieferdecker addressed the chilling effect the ongoing litigation could have on city planning.

“If these plans are to be vulnerable to nuisance environmental lawsuits, then every city and town in the region will be forced to complete their 2050 plans while constantly looking over their shoulder and potentially compromising policy to appease their most litigious residents,” Schieferdecker wrote.

A city is obligated to update its comprehensive plan once a decade to accommodate updated population projections made by the Met Council. It is that document that guides development, and cities must make sure their zoning codes and ordinances match the plan.

Minneapolis received nationwide attention for the way its plan pushed for increased density as a way of concentrating population growth in areas already served by infrastructure, including transit. It determined that single-family neighborhoods should accommodate so-called missing middle housing such as duplexes. And multi-family housing would be allowed in corridors close to transit lines. Parking minimums were cut, and zoning changes were made in many areas to allow more development.

The Smart Growth suit asserted that if the new plan increases city population to the maximum level possible, it could degrade the environment by increasing the amount of paved surfaces that could increase the impact of stormwater runoff, by increasing the number of people straining wastewater systems, by reducing tree canopy and by increasing air pollution.