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An ordinance passed by the Minneapolis City Council which supporters say would curb gentrification is facing a veto, as Mayor Jacob Frey says it could instead stall real estate deals and lower commercial property values.
The City Council passed the “Commercial Advance Notice of Sale” ordinance last week. It would require commercial property owners in several designated cultural districts, plus areas in north Minneapolis and near the University of Minnesota, to give 60 days’ notice to the city and any tenants before putting their buildings on the market.
Supporters pitched it as a strategy to combat gentrification and encourage local ownership — but some other council members, along with Frey and opponents in the real estate industry, said it would slow down property sales. The ordinance originally passed the council on Sept. 25; Frey issued his veto on Wednesday.
Council member Jason Chavez, an author the ordinance, said small businesses renting in commercial buildings need more chances to know when their building is being sold.
“The lack of transparency when a commercial building is sold makes it difficult, oftentimes impossible, for neighborhood groups, nonprofits and community partners or even a tenant of a small business to… potentially purchase,” Chavez said during a council meeting.
At a public hearing, local advocates said small business owners are sometimes surprised to learn that their building’s owner has changed, and find themselves unaware of any sale process taking place. Chavez said the ordinance is meant to curb that surprise.
Chavez and other authors said the idea arose after the 2020 civil unrest in Minneapolis destroyed buildings — many of them housing small businesses — along Lake Street and other cultural corridors in the city. Some city council members and community development groups worried that big, out-of-state owners would swoop in and buy up the empty lots, leading to gentrification.
But some other council members noted that fear largely did not come true.
Council member Jamal Osman voted against the ordinance, and said he wasn’t convinced it was needed.
“Lake Street does remain, still, a cultural area, where folks from the community — immigrant communities — continue to thrive and do their businesses,” Osman said. “If it’s working right now, I’d like to keep it that way.”
Frey said in his veto letter to the council that he’s worried that requiring property owners to provide advance notice to the city will slow down the sale process and hamper efforts to fill empty buildings.
“Rather than enacting policies that slow growth, we need to focus on practices that fill our vacant storefronts and create a healthy business environment,” Frey wrote.
Council Vice President Aisha Chughtai, another author of the ordinance, said a veto cuts out a chance to give small businesses a seat at the table in sale deals.
“This was a straightforward policy meant to bring transparency to the public and help bring equity to our cultural districts,” Chughtai said. “I’m deeply saddened that the community members whose expertise informed this policy are being disregarded.”
The council can take up the ordinance again and vote to override the veto, but supporters would need to swing a few votes. An override takes a two-thirds majority vote; the ordinance originally passed the council by a vote of seven to six.
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