Minneapolis City Budget Committee – MPHA 2027 Budget Presentation (September 29, 2026)

The Minneapolis City Council Budget Committee, chaired by Councilmember Aisha Chugtai, met on September 29, 2026, to hear the Minneapolis Public Housing Authority's presentation on the mayor's recommended 2027 budget. Eight members were present, establishing a quorum. The meeting was broadcast live with real-time captioning. MPHA leadership, including Executive Director Abdi Warsami, presented on operations, capital funding, Glendale redevelopment, and Heritage Park stabilization; members then questioned MPHA on oversight, financing, and tenant protections.

MPHA Overview and Capital Needs

• MPHA serves about 26,000 residents on any given night, roughly 5% of the city's population, through public housing in 42 high-rises, 800 deeply affordable family scattered-site homes serving 3,300 residents, and housing choice vouchers serving 18,500 residents. It serves more than 10,000 children per day across the portfolio.
• MPHA estimated its capital backlog at $320 million for its 6,000 units, compared with a $169.1 billion national public-housing capital backlog. HUD has historically funded approximately 10 cents per dollar of need. MPHA said it faces an additional $2.9 million federal operating cut in 2026.
• Recent achievements highlighted included: $4.3 million in 2025 to repair and upgrade 100 family homes; breaking ground on the $78 million Spring Manor redevelopment in Ward 3 to rehabilitate 221 units and add 15 deeply affordable units; $8.2 million from Minnesota Housing for electrical systems in three high-rises; $5 million annually from the city housing tax levy; and $1.4 million annually plus $1.4 million one-time for Stable Home Stable Schools.
• MPHA said a $2 million biennial Stable Home Stable Schools request and a $7 million housing infrastructure bond request for Glendale did not pass because of the legislative impasse. MPHA received a two-year, $21 million state award expected to create 600-700 new housing vouchers.
• MPHA outlined a five-year levy plan that would gradually raise its annual levy amount to $8 million over three years, support city-issued bonding debt service for Glendale, and help construct more than 300 new deeply affordable units.

Stable Home Stable Schools and Emergency Housing Vouchers

• Stable Home Stable Schools has operated since 2019 with MPHA, the city, Hennepin County, Minneapolis Public Schools, and the YMCA, and has assisted 7,994 children and 2,865 families. MPHA later gave its estimated annual budget as $7.8 million.
• The city-funded Emergency Housing Voucher program, formally launched in August 2026 after a June contract signing, provides 36 months of rental assistance through Hennepin County's coordinated entry system, split roughly between individuals and families. As of the report, MPHA had received 24 referrals, with 9 in intake, 7 vouchers issued, and 2 households placed. First-year budgeted authority is just over $2 million, with about $300,000 expected to be spent this calendar year.

Glendale Redevelopment and City Bonding Request

• Glendale Townhomes consists of 184 townhomes built in 1952, serving about 600 low-income residents on 12 acres in the Prospect Park neighborhood. MPHA estimates about $23 million in capital needs, representing 3% of its portfolio but 7% of its capital backlog.
• The redevelopment plan, shaped by 11 resident priorities, would replace all 184 existing homes and add 100 new deeply affordable family homes in two phases. It includes 300 parking spaces, accessibility and single-level units, and increased counts of larger bedrooms, including five-bedroom units rising from 0 to 12 and four-bedroom units from 18 to 32.
• Residents would retain the right to return, continue paying 30% of income, and MPHA would continue to own and operate the site. MPHA said construction would be managed by MPHA with passive tax-credit investors.
• MPHA is seeking city bonding authority to generate approximately $38-42 million in proceeds per phase, combined with $40-50 million of MPHA capital and other financing, to deliver 284 deeply affordable units. MPHA would pay debt service, with no city general fund cost. The request was not included in the mayor's 2027 budget; MPHA hopes to close phase one in late 2028 or early 2029.

Heritage Park Stabilization and Oversight

• Heritage Park has 440 units: 300 income-restricted tax-credit units administered by the city, including 200 public-housing units, plus 140 market-rate units. It was created through an early-1990s consent decree to deconcentrate racially segregated public housing. MPHA was the landowner but a for-profit developer, McCormick Barron Salazar, had operating control; MPHA's main obligation was to pass through the public-housing operating subsidy, now about $85,000 per month, or less than $500 per unit.
• HUD inspection scores fell from 94 in 2015 to 70 in 2018, 68 in 2019, and 61 in 2020. Rental licenses at Heritage Park lapsed from 2019 to 2025; MPHA said a city staff member had told the owner licenses were no longer required. The property has been in receivership since December 2025, managed by CERTIS Financial and Property Solutions and Services.
• MPHA reported approximately 38 of 128 public-housing households at Heritage Park had asked to move; 10 were classified as high priority, and 3 had been relocated since early August. All households retain a right to return, and households continue to pay 30% of income. MPHA said no units have been condemned by the city.
• MPHA is repurposing $3 million from 2026 levy and capital funds and proposing $3 million from its 2027 public-housing tax levy for Heritage Park, a $6 million proposed investment, plus a previously available $1.1 million. The state has committed about $5 million. Capital needs are estimated at $55-65 million. MPHA has also delayed Glendale phase one by at least one year to prioritize Heritage Park and repurposed funds from the scattered-sites missing-middle project.
• Councilmember Warren was highly critical, citing a receiver's report of widespread water damage, mold, and 3,700 failing windows, and pressed MPHA on why households were placed without pre-move-in inspections. MPHA maintained it was not the owner or operator, did not lease to residents, had limited authority under regulatory and operating agreements, and was the largest contributor to stabilization since 2022. Councilmembers Palmasano, Schaefer, Chavez, and Chowdhury raised separate concerns about rental-license payments, city inspection responsibilities, and the need for city accountability.

Financial and Accountability Questions

• Vice Chair Schaefer asked for MPHA's overall budget and funding sources. MPHA reported a total budget of approximately $210 million, with federal funds accounting for about 96-97%; there is no ongoing city general fund support, but the city housing tax levy provides about $5 million annually. MPHA agreed to provide written follow-up on Emergency Housing Voucher and Stable Home Stable Schools budgets and on state capital investment history.
• On rental licensing, MPHA representatives initially said they held no city rental licenses, then clarified they currently maintain licenses required by a 2024 state law but have not made payment because of a dispute over using federal funds; the issue is in litigation.
• Councilmember Stevenson expressed anger about decades of disinvestment in public housing and asked what lessons MPHA had learned from Heritage Park. MPHA answered that the split-ownership, for-profit manager model had failed nationally and should be replaced by a single local owner responsible for operations and inspections; it also argued the city bonding tool could be repeatable for other deeply affordable housing transformations.
• Councilmember Vita raised tenant complaints at Hamilton Manor, saying maintenance, management, parking, elevator, and odor issues persisted. MPHA acknowledged a roughly $10-11 million recent renovation but noted ongoing staffing, security, and capital constraints and agreed to follow up.
• Councilmember Chavez asked when the city resumed inspections at Heritage Park and what the city should do differently. MPHA said the city always had jurisdiction, complaint inspections occurred, and city inspection activity resumed after receivership, with a formal follow-up memo requested. Councilmember Chowdhury asked for clarity on housing-code enforcement and said the city attorney's office should review the prior court case and rental-license litigation.

Key Outcomes

• No formal vote was taken on MPHA's budget request; the committee accepted the presentation and filed it without objection.
• The committee requested follow-up materials from MPHA, including written budget and funding details, and a memo on Heritage Park inspection history. A councilmember also planned to consult the city attorney on housing-code enforcement.
• The meeting adjourned to Monday, October 5, 2026, when the committee will receive 2027 budget presentations from the fire department and emergency management department.