Advocacy Update: 2023 City Budgets

The end of the year means many things, but a forgotten part is the passage of our city budgets for the new year! Every December, the cities of Minneapolis and St. Paul reach the end of their budget process after many department presentations, public hearings, and amendments. We are excited to talk about what this next year’s budget means for affordable homeownership.

Both Minneapolis and St. Paul have specific programs and funds that Twin Cities Habitat relies on. This year we are happy to share that both cities have made strong investments to promote housing affordability and ensure racial equity in homeownership. Now let’s dig deeper into each city’s budget!

The 2023 Minneapolis Budget

Mayor Jacob Frey proposed his 2023-2024 city budget in August, which included an increase of funding over the next two years to recover city investment to pre-pandemic levels. In addition to including affordable housing as a city priority, Minneapolis’ housing investment will build on the previous American Rescue Plan allocations to further support programs that Twin Cities Habitat depends on to produce and preserve affordable homeownership. The primary program that Twin Cities Habitat utilizes is called Minneapolis Homes, which provides essential funding to support the production of affordable housing.

In his proposal, Mayor Frey’s budget included an increase in Minneapolis Homes investment from $2.5 million a year to $4.5 million. Twin Cities Habitat for Humanity was excited to see this commitment after we experienced a 23% increase in production costs from 2021 to 2022. This increase in funding will be essential to ensure our projects remain affordable despite the skyrocketing construction costs. And it opens up additional opportunities to produce new long-term affordable homeownership across the city.

At the end of the budgeting process, the Minneapolis City Council approved the Mayor’s increase to Minneapolis Homes without any amendments that would negatively impact the funding. We look forward to continuing to work with Minneapolis to grow on this investment. Next, we’ll look for more ways to increase opportunities for long-term affordability and generational wealth building through homeownership.

Concept drawings for the new 17-unit townhome development that Twin Cities Habitat is building in the Harrison neighborhood of Minneapolis in 2023. Construction has already begun!

The 2023 St. Paul Budget

Shifting our focus toward the east, St. Paul Mayor Melvin Carter proposed his 2023 budget in August which included stable funding for city programs as they looked to recover pre-pandemic funding levels. This budget looked to prioritize needed city maintenance, public safety, and of course affordable housing!

In his proposal, Mayor Carter’s budget would increase funding across the affordable housing spectrum to produce new affordable units and preserve the affordability of current ones. All of the proposed funding levels were maintained and approved by the St. Paul City Council.

Twin Cities Habitat was particularly excited to see the continued investment in the Inspiring Communities program, and the approval of a newly-created Inheritance Fund. This fund will support the descendants of Old Rondo who lost their homes and businesses after the construction of I-94 so they can regain access to the lost generational wealth. The approval of funds will only be the first step, and Twin Cities Habitat stresses the need for the inclusion of homebuyer education and community partnership to ensure the future success of this program. To learn more about the history of Old Rondo and I-94, click here.

Nick Khaliq, picture above, was 13 years old when his family lost their St. Paul home from the construction of I-94. Nick's grandfather resisted having to leave his home, and his was the last house on Rondo Avenue east of Western Avenue. Read Nick's story. 

Looking towards the new year, Twin Cities Habitat for Humanity is ready to continue our partnership with the cities of Minneapolis and St. Paul to produce and preserve affordable homeownership opportunities. We look forward to building upon this investment to continue expanding affordable homeownership throughout the Twin Cities. However, we can’t do this alone! With your help we can continue to advocate for a strategic and thoughtful approach to creating more affordable homeownership.

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