The Minneapolis City Council recently passed the “Affordable Housing Right of First Refusal” ordinance, aimed at preserving affordable rental housing and preventing displacement by giving select organizations the first opportunity to purchase properties before they are sold to private investors. The goal is to ensure that affordable housing stays under local ownership and remains affordable for renters.
While some, including Council Member Jeremiah Ellison who introduced the ordinance, believe it will help counteract the growing trend of out-of-state investors buying up affordable properties, the ordinance has faced significant opposition. Groups like the Twin Cities Housing Alliance (TCHA) have raised concerns that the policy could destabilize the housing market, further reduce property values, and strain city resources.
Eric Anthony Johnson, President & CEO of Aeon, has expressed support for the concept of a right of first refusal but cautioned that the ordinance, as written, may miss the mark. Johnson highlighted the challenges facing affordable housing providers, such as rising operational costs and a lack of financial resources to support organizations purchasing properties under the ordinance. He called for additional funding mechanisms or government-backed support to help organizations successfully purchase properties.
Mayor Jacob Frey has expressed concerns about the ordinance’s potential unintended consequences on the local market and is currently deliberating whether to sign or veto it. His decision is expected soon.
