Ahead of Tuesday address, Minneapolis mayor discusses housing and homelessness

Ahead of his State of the City address Tuesday, Minneapolis Mayor Jacob Frey spoke with MPR News host Tom Crann in a wide-ranging interview. On the agenda: a tough 2024 budget year, potentially steep property tax increases, homeless encampments and the city’s housing wins.

Read a transcript of the interview below. It has been edited for clarity. You can listen to a condensed version of it using the audio player above.

You started the month off in the nation’s Capitol with mayors from across the country to ask for more federal funding to address homelessness and the affordable housing shortage. When it comes to homelessness, specifically, what were you and the other mayors asking for?

The overarching ask was for additional resources. We had mayors from around the country who are largely dealing with the same issues: mental health issues, substance-use disorder, the scarcity of affordable housing. And all of this is driving more and more community members to lack proper housing and/or to live outside. And what we’re asking for is simply help.

And help means increasing funding for housing-choice vouchers, it means additional project-based vouchers, it means new and different regulations for veterans who are experiencing homelessness.

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Tell me about the reception. What did you hear back?

The reception was positive. And keep in mind, that these are almost 50 mayors from around the country — West Coast, East Coast, middle America, Democrats and Republicans — who are all largely saying the same thing. We know the tools that we need in order to succeed here. And what we need is all the jurisdictions working together around a common goal.

Now, interestingly, cities around the country are looking to Minneapolis, specifically in the area of housing. We have instituted some of the most forward-thinking housing policies — zoning policies and subsidies to get deeply affordable housing — of anywhere in the entire country. And it’s exciting that, we’re getting called out by members of the administration at the federal level, as well as other mayors, as to how to do this right.

I don’t think there’s any city that has gotten this perfect at this point, because it’s hard. It is complex. But the work that we’re doing, especially in the area of housing, is groundbreaking.

We’re producing six times — six times — the amount of deeply affordable housing that we were before. We’ve kept rents down more than almost any city in the country because we’ve allowed for additional supply to come in. And that’s largely through zoning changes and an upward push to get additional density.

And we also saw a 27 percent decrease in unsheltered homelessness in our community. And we’re one of the only places that have seen that in the entire country.

There’s one other area that cities around the country are really looking to Minneapolis on, and that’s our Stable Homes Stable Schools program. This program has now served more than 4,800 children and it gives them a home, hopefully, within a certain radius of where their school is.

It stabilizes their home life and, in the process, it stabilizes the classroom itself. So this is one of the areas where I heard from other mayors that they want to replicate in their own cities. And it’s something that I think we can double down on.

So there are some positive trends here. And still, we need the additional help.

When the city was looking at shutting down Camp Nenookaasi, it paid a startup called Helix Health and Housing Services $1 million to get 130 camp residents into housing. At the time, the city called the effort unprecedented. Is that the kind of thing you want to do more of with new funding?

Yes, absolutely. The agreement that we had with Helix worked extraordinarily well. And it’s something that I started talking about with Sam Strong during July or August of last year. Sam Strong is the secretary of Red Lake Nation.

And what we talked about is identifying the people who wanted to get the help and truly wanted to find a long-term and sustainable place to live, and then helping them. And with this kind of culturally sensitive approach, yes, we were able to get arguably more numbers than we’ve seen before from encampments into stable housing.

And still, there were more people there. And the reality is, we had shelter available, we had provided space for people to go and at a certain point, they didn't want to. And this is another issue that I’ve talked to mayors around the country about, and there is large-scale agreement.

In fact, I didn’t encounter anybody that disagreed with the premise that these large-scale encampments are not safe. They are not safe for the people living in those encampments, as we’re seeing significant human trafficking, drug trafficking, especially of minors.

And it’s not safe for the surrounding residents either. And so yes, there are instances where it is necessary to clear encampments. And we’re trying to provide the care that people need, offering shelter space, offering housing, doing all the necessary work to get people a compassionate approach.

That’s what we need to be doing. And we have to understand the reality, which is that these encampments are not safe.

Do you have any information on the folks, the 130 camp residents, who got into housing through Helix Health and how they’re doing?

Yes, we’ve received a bunch of anecdotal information. Of course, we’re looking for the report itself to come back just so we know how individuals are doing for the long run, because that’s information that we ultimately want to track.

Obviously, there are both success stories of people continuing to live in this long-term and stable housing. There are people that continue to get healthy and get better. There are also individuals that relapse, that go back to an encampment or some other form of homelessness. And you’re going to see both of those in any subgroup.

In the current system, federal dollars flow through counties for social services. Does that tie your hands as a city mayor in some ways? Would it be better to have more of that money come directly to Minneapolis?

It’s a good question. And it’s a frustration that I have heard from so many mayors, in that, when things are going wrong in cities, people generally look to the mayor to solve the issue.

But in this area, money predominantly goes to counties. The county is the primary social service provider. And to be clear, they’re great partners. The city partners with them constantly. We’ve got a team of people that is working on the homeless issue day in and day out. And they're wonderful partners.

At the same time, people are looking to cities for answers. And so, you know, you either have to have a deep partnership with the county, which we do, and/or you’ve got to make sure that cities have the money to be flexible.

Cities are nimble. They’re able to act quickly. We can set up contracts like the Helix contract that was able to serve 130 people in a very short period of time. We’re not as robust a government as the county is, but we can move quickly. Again, they’ve been great partners, and at the same time, the city does need the support to do the work we need to do.

When it comes to the city’s policy on encampments, there are proposals put forth by some city council members who want more parameters and transparency about the encampment closure process. How do you answer that?

It’s hard to answer the question without knowing what the policy is. And certainly, I’m very much willing to work with city council members.

My ask would be for them to work, not just with me, but with the experts — the people that are doing this work in public service, the experts that are at the county, the social services providers and people at the city who are also doing it to make sure the policy fits with the reality that we're seeing on the ground.

You mentioned transparency. We’re all for that. We want to be transparent about closure dates, to make sure that people have as much advanced notice as they can possibly get, and at the same time, there are instances where there are serious safety concerns where you can’t give multiple days notice.

This is the reality that we need to account for. And it’s not a reality that’s unique to Minneapolis.

I understand you’re looking at a really tough budget year, and it could mean steep property taxes in the city of Minneapolis. Why is that?

We are working to find efficiencies right now wherever we can. We recognize that property taxes in and of themselves are a regressive form of taxation; unlike in income tax, which taxes you more the more money you get, a property tax disproportionately impacts low-income people and seniors.

And when you see significant raises in the tax burden, it has a disproportionate impact on certain people — one that we’re trying to avoid.

We do see a big shift right now in terms of who is burdened most by property taxes that come in, and it’s a shift that, in part, was probably inevitable but got expedited by COVID-19.

It is a fact that we now have some people in the city who are working remotely. And while I imagine that we’re going to get back up to somewhere around 85 percent occupancy and more people are coming downtown to work every day, right now we’re hovering around 70 percent. And with that decline, you’ll see a reduction of value.

The main point is this: With a reduction in value of these office buildings, you will also see a reduction in the amount of property taxes we’re able to collect from them. And if you take just a few of these buildings, I mean, a series of these buildings generate about as much property taxes as council wards in their entirety, that decline is ultimately covered by residents of the city.

This is not the way we want it to happen. This is going to require a whole lot of work from me and our city staff over the next several months to try to reduce the burden that residents of our city feel.

And at the same time, we’re going to need to be operating in reality here about what these budgets going forward are going to look like. It’s not unique to Minneapolis. And we’re certainly also not an exception to the rule.

And what we’re going to need to be doing right now is executing on the programs that we already have. I’ve been telling council members that we’re not going to have new, shiny objects.

We’re going to need to operate and be more efficient with the services that we’ve got. And we’re going to need to expand on the programs that are working and take a fine-tooth comb to what’s not.

It seems like there are two ways to fix this, and that is for the city to spend less money or for policies to be in place where downtown real estate is worth more. Which one are you going to tackle first?

Well, we don’t determine the value of the real estate itself; that’s determined by the market. What we do is we set the tax levy.

And so we try to, again, bring down the property tax levy as much as possible, at the same time recognizing that there's important government service that we need to be supporting. And so, as is always the case, it’s a balance. We’re going to get there, but it’s going to require a bunch of work.