Feds join push for zoning reform

Richard Monocchio (left), principal deputy assistant secretary of HUD, presents a symbolic check to Metropolitan Council Chair Charles Zelle (right) to pay for technical assistance for cities changing zoning laws to allow more housing on June 27, 2024. Photo by Madison McVan/Minnesota Reformer.

An ambitious plan to change Minnesota zoning rules to allow more housing construction statewide failed last legislative session despite a broad, bipartisan coalition of support.

That coalition now has a new member: the federal government.

A top U.S. Department of Housing and Urban Development official visited St. Paul on Thursday to highlight a $4 million grant to the Metropolitan Council to provide technical assistance for cities rewriting local zoning ordinances. The effort aims to legalize the construction of more types of housing in less-dense areas of the Twin Cities, with the goal of easing a housing shortage.

The grant is a drop in the bucket for the Met Council, which has a $1.42 billion operating budget, but it represents an important shift in the federal government’s approach to housing, aligning the Biden administration with housing advocates in Minnesota who made a strong push for statewide zoning changes in the most recent legislative session.

Zoning rules have long been used by cities to keep out low-income renters — which has in effect often meant people of color — by preventing the construction of apartment buildings, townhomes, duplexes and other affordable, dense types of housing.

But the U.S. is facing a massive housing shortage after the 2008 financial crisis stalled new building. The shortage has jacked up housing prices; building dense housing is the quickest way to add more units to the country’s supply.

Minnesota builders involved in the push for zoning reform say they often encounter mountains of red tape, contentious public hearings and unnecessary aesthetic requirements imposed by city governments when trying to construct apartments. Stringent zoning rules mean developers frequently have to ask for exceptions, or variances, often resulting in canceled projects, smaller-than-planned buildings and increased costs, which are passed on to residents, they say.

Richard Monocchio, principal deputy assistant secretary of HUD and a longtime Chicago-area housing official, said the grant is the first time the federal government has put money towards zoning reform.

“If you can’t get a building permit, you can’t build,” Monocchio said Thursday at a press conference at the Met Council chamber in St. Paul.

The grant is part of HUD’s Pathways to Removing Obstacles to Housing program, or PRO Housing program, which was funded by Congress in 2023. It’s intended to provide technical assistance — like analyzing an area’s capacity for denser housing — for cities adopting zoning reforms.

U.S. Sen. Tina Smith, D-Minn, chair of the Senate Housing Subcommittee, advocated for the PRO Housing program in Congress and praised the Met Council grant on Wednesday.

The Met Council applied for the maximum grant amount of $10 million; Met Council Chair Charles Zelle said the council would apply for more money when HUD releases a second round of funding later this year.

“This is about pathways to removing obstacles — and we have obstacles to remove,” Zelle said.

In the 2024 legislative session, DFL leaders rejected a series of bipartisan proposals that would have required all municipalities to allow more types of housing on all lots and streamlined apartment construction along transit corridors and in commercial areas. City leaders successfully lobbied against the bills, citing infrastructure concerns and a loss of local control.

Some metro cities, including Minneapolis, St. Paul, Bloomington and Richfield, have passed various zoning reforms aimed at constructing more dense housing. But other cities are holdouts — and the grant money is an incentive to get them on board.

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