The Family Housing Expansion Project (FHEP) is the first of its kind in the public housing sector, bringing “missing middle,” deeply affordable housing through modular construction. The project was constructed from 126 Minnesota-made modules creating 26 two- and 58 three-bedroom units in fourplexes and sixplexes across 16 sites throughout Minneapolis. All units are available to households at or below 30% of the Area Median Income. Sixteen of the units are disability accessible, with another 17 being high-priority homeless units with services funded through Hennepin County’s Coordinated Entry program. Minneapolis Public Housing Authority—the developer, owner and property manager of the project—estimates these 84 new homes will be able to serve approximately 420 families over the next 30 years.

The Minneapolis Public Housing Authority (MPHA) effectively redeveloped existing single-family home lots to accommodate these new apartment buildings in neighborhoods that lacked affordable housing thanks to the City of Minneapolis’ zoning law changes. Significant financial support came from the City of Minneapolis paired with Low Income Housing Tax Credits, solar tax credits, Hennepin County funding, subsidies, and loans. The FHEP’s success has been celebrated and acclaimed by local community leaders—Minneapolis Mayor Jacob Frey and Hennepin County Board Chair Irene Fernando—and by sector leaders, like Minnesota U.S. Senator Tina Smith and U.S. Department of Housing and Urban Development (HUD) Great Lakes Regional Administrator, Diane Shelley. The FHEP will certainly act as a model for future MPHA developments and could be replicated by affordable housing organizations nationwide.

The agency was able to mostly utilize sites within its existing scattered site portfolio for this project. The redevelopment of single-family homes and duplexes into four- and six-unit apartments was only made possible by the Minneapolis 2040 plan which allowed for missing middle housing in areas of the city that were previously not allowed due to zoning restrictions that, in part, reinforced the racially restrictive practices of redlining. The ability to use single family home sites currently under control by MPHA, allowed the project an advantage of not having to assemble land and allowed the project to build in neighborhoods that lacked affordable housing.

This project was enabled in part by MPHA transferring its scattered site family housing portfolio in 2020 from HUD’s Section 9 (public) platform to the Section 8 (voucher) program via the Section 18 program. Using its wholly controlled nonprofit, Community Housing Resources (CHR), MPHA was able to receive more than double the federal subsidy it was previously receiving to manage the same homes at the same income and affordability levels.

The agency was able to provide 84 project-based vouchers to fully subsidize the units to achieve the project’s deep affordability and made a significant contribution with a $12.5 million dollar loan to the project. Additionally, the project benefited from a $1.4 million Local Housing Incentives Account (LHIA) award from the Metropolitan Council, a $500,000 award of Hennepin County’s Affordable Housing Development Accelerator fund, and more than $500,000 in equity through solar tax credits.