Letter to the Editor: An Upper Harbor Terminal Housing Plan

By Dennis Paulaha, PhD, Great River Coalition

Although I am an economist, I would like to offer a somewhat personal plan for the Upper Harbor Terminal land owned by the city—48 acres of land in North Minneapolis with one mile of frontage on the Mississippi River.

Minneapolis, like every other city in the country, has an affordable housing problem and a racial inequity problem.

Both problems could be alleviated, although not eliminated, by building low cost single-family homes. 

The problem is, the private sector is not going to, or, more accurately, cannot provide low-cost new single-family housing. There are a number of reasons, all of which are valid, as to why that can’t happen. One of the most important is that a major expense when building any house is the cost of the land.

For example, the Minneapolis 2040 Plan is based on the idea that private developers can tear down single-family homes they pay $500,000 and more to purchase, and replace them with affordable rental units, not single-family homes, not even condos.

But because renters cannot accumulate home equity, a long-term solution to affordable housing and racial inequity should consider plans that allow families to build wealth with ownership.

And that is where the Upper Harbor Terminal land offers a unique opportunity to the city of Minneapolis.

I lived in North Minneapolis until I was 10. Then we moved to Robbinsdale, into a small cape, and my father turned the attic into a third bedroom. It was a small development that covered only two square blocks and it was a mixture of two-bedroom capes and three-bedroom ramblers. I lived there until I left for college. My parents lived out their lives in that house.

At the time, the houses in Edina were bigger, but nothing close to today’s new houses, whether they are in a suburb or rebuilds in the city of Minneapolis.

There are, however, no houses like the one I grew up in being built anywhere in the country. There are people building and selling what are called tiny houses, which are not much larger than camping trailers. But builders cannot afford, because of land costs, to build two bedroom capes and three bedroom ramblers.

And that is where the Upper Harbor Terminal land comes in.

The city owns the land, so the city could allow the property to be used to create a modern day (but smaller) version of older Minneapolis neighborhoods or suburbs.

Architects might be willing to donate time to re-create modern-day versions of homes that were built in Minneapolis neighborhoods from the 1920s through the 1940s and in suburbs all across America in the 1950s.

The City of Minneapolis could maintain ownership of the land.

And the houses could be sold to people based on an income limitation, which could exclude people who can afford more expensive homes.

I believe some discussions took place during the Minneapolis 2040 Plan debates regarding small houses, but Heather Worthington from the Minneapolis Planning Department was quoted as saying such ideas would be an admission of failure by the city.

I do not think small single-family houses should be considered a failure.

The real failure is a solution that ignores ownership.

Of course, the number of small single-family homes that can be built on 48 acres is much smaller than the number of living units that can be built in condo towers.

But condo units are not always a best choice for families with children, and there are already a huge number of towers being built or approved in the city—expensive condo towers downtown and in the suburbs, and rental units throughout the city, especially in Uptown and Northeast.

Years ago, small single-family homes were called starter homes, the idea being that young families could buy a small home and as they accumulated equity and their incomes increased, they would have the financial ability to move up to something bigger and better.

That is what has been lost in the city and it is what is missing from city plans.

And because renting does not provide the financial base that can be used by families to move up in the world, as well as to finance their children’s education, the loss of starter homes has significant economic. impacts, especially when identifying the most important causes of racial inequities in the city.

Again, 48 acres of small single-family homes will not eliminate the affordable housing problem or the racial inequity problem, but it could be a step in the right direction. It could be a model showing how various chunks of land throughout the city can be used to improve the lives of people and the economy of the city.