New Minneapolis ordinance aims to increase housing downtown
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Minneapolis Mayor Jacob Frey signed a city ordinance Tuesday afternoon that streamlines the process of converting unused office space into housing units.
The COVID-19 pandemic left many office buildings and nonresidential properties empty at a time when demand for housing is growing.
“Downtowns are dramatically changing, and we in the city of Minneapolis need to be at the forefront of that change,” Frey stated at a mid-day news conference inside the Northstar Center, a 13-floor property in downtown that will be converted into 216 units. It’s now known as the Groove Lofts at Northstar Center.
“All roads will always lead to downtown Minneapolis, and at the same time, how people use this city, how people use our downtowns, will significantly change.”
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The ordinance allows for conversion projects to undergo administrative review instead of Planning Commission approval. This approach reduces review time by up to two months and eliminates public hearings from the process.
The ordinance also eliminates the requirement for inclusionary zoning for affordable units of 50 or more for the next five years, he said. But projects seeking financial assistance will still need to meet affordability requirements.
Frey said 70 percent of workers come into downtown at least one day a week and those figures are trending upwards. Still, he added, the city realizes it might not get back to 100 percent.
“This is no longer going to just be a place where people come in to work at 8 a.m. and leave at 5 p.m.,” Frey said. “We're going to have a beautiful diversity of use and people.”
The ordinance, which received broad support in council, was co-authored by Council member Katie Cashman of Ward 7 and Council member Michael Rainville of Ward 3.
Cashman said the city’s goal is to transition the 9-to-5 model of downtown to a 24/7 standard. That goal also includes doubling the city’s residential population in downtown in the next decade.
“It’s really a win-win for both revitalizing our property tax base and creating more housing in this city that is desperately needed,” Cashman said.
She said she’s enthused about the cost ratio for such projects: 75 percent is for labor expenses and 25 percent go toward materials. The cost ratio for new buildings, she added, is the opposite.
Rainville said the ordinance cuts the red tape and “sends the signal to the private sector that Minneapolis is open for business.”
“We want to get this town rocking again,” Rainville said.
The $92 million project at the Groove Lofts includes $6.9 million in tax increment financing from the city, as well as state and federal tax credits. Tenants are expected to begin moving in next month.
Frey said more residents in downtown will result in improved safety and economic vitality.
“Not only do you improve safety because more eyes are on the street, not only do you improve economic vitality because more and more tenants are coming in to work, the street life is incredible,” the he said. “You can walk down the street and have 100 different tastes and smells and sounds and people all packed in on the same block that you would not get if it was all purely office space.”