Environmentalists' Lawsuit Brings Minneapolis' YIMBY Success Story to a Screeching Halt

Three environmentalists groups had argued that the city failed to perform a state-required environmental analysis of its Minneapolis 2040 comprehensive plan.

Minneapolis' first-in-the-nation abolition of single-family-only zoning has been reversed by a local judge, who ruled that the city's recent zoning reforms will have to be put on ice until it performs a study of their environmental effects.

On Wednesday, the Minneapolis Star Tribune first reported, Hennepin County Judge Joseph Klein ruled in favor of three environmental groups who'd filed a lawsuit against Minneapolis arguing that the city had failed in its duty under the Minnesota Environmental Rights Act (MERA) to study the environmental effects of its wide-reaching Minneapolis 2040 comprehensive plan update.

The Minneapolis 2040 plan was approved by the City Council in December 2018. It increased allowable densities across the city, including allowing triplexes to be built everywhere single-family homes were once exclusively permitted.

The city started issuing permits for these newly legal units in January 2020. Klein's decision means that it will have to abruptly stop until the city performs the MERA-required environmental review.

"While this may no doubt create no small amount of short-term chaos—which the court does not take lightly— this court is inclined to agree that, under MERA, no other action by the court would properly address or remedy the likely adverse environmental impacts of the 2040 Plan," wrote Klein.

The plaintiffs Smart Growth Minneapolis, Audubon Chapter of Minneapolis, and Minnesota Citizens for Protection of Migratory Birds first sued the city in December 2018, just before the City Council approved the Minneapolis 2040 plan.

The plan allowed for a total of 150,000 additional units to be built in Minneapolis. The three groups argued that this substantial increase in population density would have serious traffic, noise, air quality, and sewage impacts that the city needed to study and address.

"The law requires the city to show that its actions are causing the least environmental harm feasible while trying to achieve its goals, including greater density," Rebecca Arons of Smart Growth Minneapolis told Minnesota Public Radio yesterday. "This court victory will prevent mistakes from being made by environmentally blind implementation of the plan."

The city argued it was unlikely that all of the 150,000 new units authorized under Minneapolis 2040 would be built and that individual projects would still have to go through environmental review. Therefore, it said that MERA didn't require it to study the impacts of the comprehensive plan.

Klein rejected that, saying "the Comprehensive Plan is not shovels in the ground, but it is nevertheless the driving force that permits a scale of population intensification and residential unit increase that has never before been authorized."

While the argument lost in court, the city is probably right that all the units that are authorized by the 2040 Minneapolis plan won't get built under the current rules.

The 2040 Minneapolis plan went into effect in January 2020. Its single-family-zoning reforms have led to the completion of 104 units of housing in newly legal duplexes and triplexes up through March 2022. One reason for these modest results is that Minneapolis largely requires new two- and three-unit homes to be the same size as the single-family homes they're replacing.

Without the ability to add additional floor space, fewer developers will find it profitable to tear down an existing single-family home and replace it with a triplex of the same size. Many have stuck to building new single-family homes, with 170 being built in the city from 2020 through 2021, according to data provided by the city to Reason.

(Bizarrely, Klein's opinion says that "before the 2040 Plan there was no abolition of new single-family dwellings in Minneapolis." There was no abolition after it either.)

Minneapolis is seeing a significant increase in the construction of smaller apartment buildings, which is being credited to increased allowable density on some commercial corridors as well as the city's abolition of requirements that developers include a minimum number of parking units with their buildings.

Minneapolis had been chipping away at parking minimums since 2009. The Minneapolis 2040 plan got rid of them entirely. Because Klein's decision requires Minneapolis to revert to its pre-Minneapolis 2040 zoning policies, it is possible that developers will be forced to include parking in their buildings again because the city didn't study the environmental impacts of not requiring parking.

Local pro-density activists have argued that, from being a burden, increased population densities in urban areas are good for the environment.

"The Minneapolis 2040 plan was a great step forward for Minneapolis to achieve its goals for climate," says Lauren Richards of the group Neighbors for More Neighbors. "Studies after study have shown that greater density, especially in an urban area, is better for the climate."

Indeed, a common criticism of environmental review laws like MERA is that they focus unduly on narrow, local impacts of new development. As a result, they undervalue the wider environmental benefits of new development and the environmental costs of the status quo.

It's true that more development in Minneapolis might mean less tree cover and more strain on the city's sewer system. But the people who would have lived in those new homes don't just disappear because the homes do. They will instead move to places where homes are allowed to be built. Often that's going to be suburban developments on previously undeveloped that will have an even greater impact on the environment.

University of California, Davis law professor Chris Elmendorf made this same point about the Golden State's very similar law, California Environmental Quality Act (CEQA), when it was used to stop U.C. Berkeley from enrolling more students.

"CEQA pretends that if those people weren't living in Berkeley they wouldn't be living on planet Earth, where they'll be driving or making trash or noise or starting wildfires or bulldozing habitat," he told The New York Times in March.

The decision is also a huge step back for the property rights of landowners in Minneapolis. Builders who would have been well within their rights to build a parking-free apartment building or triplex will have to forgo those projects while they wait for the city's environmental review to be performed.

Klein's decision gives Minneapolis 60 days to revert to its old, pre-Minneapolis 2040 land use regulations. The city is forbidden from implementing the new regulations until it more thoroughly responds to the environmental issues raised by the plaintiffs.

A city spokesperson told Reason that the city is reviewing its options but will likely appeal the decision.