Today, Minneapolis Mayor Jacob Frey, Minneapolis City Council President Andrea Jenkins, MPHA Executive Director and CEO Abdi Warsame, and MPHA resident leaders announced a new, long-term funding agreement between MPHA and the City of Minneapolis ahead of Mayor Frey’s annual budget announcement next week.
This new agreement proposes to send MPHA $5 million annually to support the agency’s preservation and production activities, five times the city’s current $1 million ongoing funding support to MPHA’s capital improvements. This also provides MPHA a 25 percent boost on top of the annual capital funding it receives from the U.S. Department of Housing and Urban Development (HUD), which was $20 million in 2022.
In addition to the new funding, the City of Minneapolis will place a newfound focus on MPHA resident security in and around the agency’s 42 high-rises. As a part of the agreement, city leaders will direct the Minneapolis Police Department (MPD) to establish direct lines of communication with MPHA’s security team, quickly elevate problems to MPD leadership, and commit to regular meetings with MPHA residents to hear about safety concerns in and around agency high-rises.
Resident safety is the single issue most routinely raised by MPHA residents, and MPHA’s security team has already responded to and submitted more than 4,000 incident reports in 2023. This expanded partnership will help build new efficiencies and coordination between MPD and MPHA’s security team.
“Thank you to Mayor Frey for his leadership in developing this new, long-term funding agreement for MPHA,” said Abdi Warsame, Executive Director/CEO of the Minneapolis Public Housing Authority. “A lot of people talk about the importance of affordable housing in our community, but time and again, Mayor Frey is out here making real, tangible investments. I thank Mayor Frey for being a champion of affordable housing and public housing residents, and I am excited to expand MPHA’s partnership with the City of Minneapolis.”
“Our Administration believes in the importance of public housing, and we are putting our money where our mouth is,” said Mayor Jacob Frey. “This $5 million ongoing investment is not just a large figure, it’s reflective of our values. Our message to our public housing residents is clear: we hear you and we are stepping up to help.”
Historically, HUD has only provided about 10 percent of the funding necessary for major building improvements. That means each year the agency is forced to choose band aid options to triage leaky roofs, repair crumbling brick façades, replace damaged 60-year-old windows, or improve decades-old high-rise electrical and plumbing systems instead of more comprehensive solutions. Over time, this problem has compounded, creating the agency’s current capital backlog of $229 million in needs—a problem that is only getting worse.
Knowing Washington won’t solve the agency’s funding problems any time soon, MPHA staff have pursued and maximized nearly every tool possible to address this problem. This includes seeking special budget permissions from HUD to develop localized solutions, creating new public-private partnerships to leverage debt financing for major renovation projects (while maintaining strong guardrails to protect residents and public ownership), accessing project-based funding supports at every level of government, and pursuing one-time and ongoing financial supports from state and local governments.
And while MPHA has secured tens of millions in funding supports with this “all-of-the-above” approach, it has not been enough. But with the proposed commitment of $5 million annually from the City of Minneapolis, the agency gets one step closer to closing the funding gap to the resources it needs. Further, the City and MPHA will continue to advocate to county, state and federal partners via The Public Housing Preservation and Expansion Convening to ensure all levels of government are prioritizing their own funding be directed towards MPHA residents and voucher-holders.
In the coming years, MPHA will use this new money on a variety of high-priority capital improvements, including high-rise ventilation and cooling systems, elevator modernizations, and enhancing resident community spaces. The agency will also use these funds to help finance major high-rise and scattered site renovation projects that will preserve and improve hundreds of units while also affording the agency opportunities to add new deeply affordable units.
Beyond the magnitude of this new funding and the impact it will have on MPHA’s preservation and production activities, this new money delivers the agency certainty it can plan for and leverage with a variety of financial tools to make this funding go even farther. But most importantly, this new agreement provides the certainty that the City of Minneapolis is committed to partnering with MPHA as the agency seeks to build new and expanded partnerships across our state and region to help house Minneapolis’ most vulnerable populations.
