Racial Equity Impact Analysis (REIA)

The Racial Equity Impact Analysis helps the City consider racial equity outcomes when shaping policies, practices, programs and budgets.

HOME, CDBG, and NSP program income appropriation and restricting HOME and NSP loan repayments to be used as revolving funds - REIA

Section 1: Background

Does this impact one of the City's Goal Areas

Policy Goals

Operational Goals

Public Safety	No
Housing	Yes
Economic Development	No
Public Services	No
Environmental Justice	No
Built Environment & Transportation	No
Public Health	No
Arts & Culture	No

Workforce	No
Spending	No
Data	Yes
Community Engagement	No

Describe the impact on selected goal areas.

The appropriation of the funds from the Community Development Block Grant (CDBG), Neighborhood Stabilization Program (NSP) and HOME programs will be used to fund the Minneapolis Homes Financing program.

The Minneapolis Home Financing umbrella program funds the development of one to 20 units of ownership housing that is accessible to low to moderate-income households throughout the city with a goal of improving access to homeownership among Black, Indigenous, People of Color, and immigrant (BIPOCI) residents.

As there are no programmatic changes to the Minneapolis Homes Financing programs in 2022, this analysis will reference the most recent program changes adopted in 2020. That analysis can be found here: https://lims.minneapolismn.gov/Download/RCAV2/13827/Minneapolis%20Homes%20Racial%20Equity%20Impact%20Analysis.pdf

The most recent REIAs conducted for the annual program income appropriations can be found at the following links:

Home and NSP program income appropriation - https://lims.minneapolismn.gov/File/RacialEquity/9355

Who participated in completing this analysis?

Ryan Nestingen & Roxanne Young Kimball

Section 2: Data

LIST THE SPECIFIC GEOGRAPHIES THAT WILL BE IMPACTED AND THE RACIAL DEMOGRAPHICS OF CONSTITUENTS IN THOSE AREAS:

Minneapolis Homes, under which many homes would be developed using this model, currently primarily acquires, sells, and finances properties located in North Minneapolis on City-owned land; however, the overall program is city-wide and was recently modified to include non-North communities better. Most of the City-owned land held for housing development is in North Minneapolis. Residents of color make up a more significant proportion of North Minneapolis households than Minneapolis city-wide. According to 2019 ACS 5-year estimates, the proportion of Black residents in the Near North and Camden communities is 50% and 35%, respectively, compared to city-wide at 19%. Residents identifying as Asian or Pacific Islander are also about twice as heavily represented in North Minneapolis compared to city-wide.

What does available data tell you about how constituents from BIPOC communities currently relate to the desired outcome as compared to white constituents?

Housing costs have risen relative to incomes for Minneapolis renters but not homeowners. Most households of color in the city are renters compared to white households, for which a majority own homes. According to 2016 ACS 5-year estimates, the homeownership rates of Black and American Indian households are 20%, 25%, and 34% for Hispanic or Latino and Asian households, respectively. This is compared to 60% of white households who own their homes.

Homeownership provides an opportunity for housing stability and wealth building. However, these opportunities historically and today have not been accessible to Black, Indigenous, and households of color due to racially restrictive housing policies and lending practices that have excluded communities from owning a home. This geographic redlining has shaped historical and existing development patterns, resulting in the lack of multifamily housing development in white neighborhoods.

What data is unavailable or missing? How can you obtain additional data?

CPED staff has identified metrics to evaluate the Minneapolis Homes program and its role in addressing homeownership disparities in the city. See Section 5 for more information on program evaluation.

Section 3: Community Engagement

Using the International Association of Public Participation (IAP2) Public Participation Spectrum, which participation strategy(s) was used when engaging those who would be most impacted?

Inform	No
Consult	No
Involve	No
Collaborate	Yes
Empower	No

Describe the Engagement and what have you learned?

The Minneapolis Homes team worked with consultant Grounded Solutions Network to develop the Long-Term Affordable Housing Policy Study to inform the expansion of capacity for long-term affordability in ownership housing in Minneapolis. The goal of the study was to conscientiously engage Black, Indigenous, People of Color, and Immigrant communities and low-wealth households in communities most at risk of displacement. Widely advertised public meetings were hosted in July 2019 and February 2020; Staff and Grounded Solutions Network additionally participated in 24 focused discussions with developers, long-term affordable housing providers, and representatives of Black, Hmong, Hispanic/Latinx, Immigrant, and American Indian communities. In October 2019, focus groups were held with neighborhood organizations, foundations, government agencies, and affordable housing advocates to examine equity-sharing formulas that could provide options for long-term affordable housing. The October 2019 focus group clarified a preference for equity-sharing formulas that achieve permanent affordability (99+ years). Through the course of 2019- 2020, an estimated 1,000 voices were engaged to shape the recommendations. Common themes that emerged from the engagement included:

Encouraging community-led and/or resident-led development
Utilizing city land as an asset to leverage development aligning with broader City goals
Focusing homebuyer products to serve households at lower incomes
Disrupting displacement trends impacting BIPOCI and low-wealth households
Diversifying opportunities to access City programs through process simplification
Providing options to achieve permanent affordable homeownership housing

Section 4: Analysis

How does the outcome for this ordinance, amendment, or policy help the city achieve Racial Equity?

As there are no programmatic changes to the Minneapolis Homes Financing programs in 2023, the scope of this analysis will reference the most recent program changes adopted in 2020. That analysis can be found here: https://lims.minneapolismn.gov/Download/RCAV2/13827/Minneapolis%20Homes%20Racial%20Equity%20Impact%20Analysis.pdf

Section 5: Evaluation

How will impacts be measured? What are the success indicators and process benchmarks?

Impacts of the Minneapolis Homes program will be measured by reporting the programmatic and broader housing outcomes in Minneapolis that are disaggregated by race and other important factors. The Minneapolis Homes program was revised in July 2020 to align with the Minneapolis 2040 Comprehensive Plan, which included changes to reduce the cost of producing affordable housing, improving access by BIPOCI and community-led developers to program resources, and lowering income limits for homebuyer programs.

As part of the adopted changes, staff recommended that the overall policy evaluation will take place in 2024 of outcomes from years 2021-2023 will be measured against the following success measures:

Perpetually affordable housing rate doubles to 60% of financed units
BIPOCI household service rate continues at 70%, and the average household income served is 60% AMI
Community-led and/or BIPOCI-led developers represent 50% of projects
Racial disparity rate in homeownership is reduced by at least 3%

These success measures assume that market conditions and program funding remain constant.

How will those who are impacted be informed of progress over time?

CPED staff is in the process of evaluating more consistent and legible ways of tracking the state of housing in Minneapolis as well as outcomes for residents disaggregated by race and other important factors. This includes a partnership with the Federal Reserve Bank of Minneapolis to develop a dashboard on housing indicators in Minneapolis. The goal is to have information gathered in one central place online for residents, staff, and policy makers to be able to access in order to inform conversations around housing issues in Minneapolis.

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