Equity in Place, Segregation, and the Phillips Neighborhood
This Article describes an existential legal and factual conflict about residential segregation. It is centered in a neighborhood a few blocks north of where George Floyd—and more recently Renee Good—were murdered. Five years before Floyd’s murder, the conflict reached a breaking point, resulting in three lawsuits. One involved federal civil rights and two involved state civil rights claims that housing policy was causing deeper residential and educational segregation. Footnote #1 content: See Complaint, Metro. Interfaith Council on Affordable Hous. v. State, (U.S. Dep’t of Hous. & Urb. Dev. Nov. 5, 2014); Cruz-Guzman v. State, 998 N.W.2d 262 (Minn. 2023) (complaint filed 2015); Complaint, Stairstep Foundation v. State, No. 62-CV-23-2862 (Minn. Dist. Ct. dismissed Apr. 17, 2026) (dismissed according to parties’ settlement agreement). Much of this debate was summarized in a series of articles in the journal Housing Policy Debate before the lawsuits were filed. Footnote #2 content: See Myron W. Orfield et al., High Cost and Segregation in Housing in Subsidized Housing Policy, 25 HOUS. POL’Y DEBATE 574 (2015) [hereinafter Orfield et al., High Cost and Segregation]; Edward Goetz, Poverty-Pimping CDCs: The Search for Dispersal’s Next Bogeyman, 25 HOUS. POL’Y DEBATE 608 (2015) [hereinafter Goetz, Poverty-Pimping CDCs]; Myron Orfield et al., Taking a Holistic View of Housing Policy, 26 HOUS. POL’Y DEBATE 284 (2016); see also Douglas S. Massey, The Social Science of Affordable Housing, 25 HOUS. POL’Y DEBATE 634 (2015); Jill Khadduri, The Affordable Housing Industry Needs to Develop Capacity to Work in High Opportunity Neighborhoods, 25 HOUS. POL’Y DEBATE 639 (2015).
On one side were proponents of greater residential and educational integration by dedicating a share of government-supported affordable housing to whiter communities with strong schools. To them, the murder of Floyd and its aftermath were part of the legacy of segregation, its profound harms to education, health, safety, and its role in creating white prejudice through isolation in privileged communities.
On the other side were the organized opponents of residential integration, mostly housing developers who coalesced into a group called Equity in Place. This side believed that the government supported low-income housing should be highly concentrated in extremely segregated and disadvantaged neighborhoods. Footnote #3 content: See infra Part V (noting particularly the testimony of Owen Duckworth, Director of Organizing and Policy at the Alliance for Metropolitan Stability and representative for the Equity in Place Coalition at the HUD Fair Housing Hearing Open Meeting (July 27, 2016) (on file with author)). See also Neeraj Mehta Keynote—LJ Directors’ Summit 2017, (YouTube, Nov. 2, 2017), https://www.youtube.com/ watch?v=nle1vEwfp4U&t=2488s; Cafe con Alondra—Gentrification: Who Gets to Live in Minneapolis in 2020? (YouTube, Sept. 30, 2015), https://www.youtube.com/watch?v=Xa_Cyaqv0A4 (featuring commentary of Neeraj Mehta, Equity in Place co-founder and then-Director of Community Programs at the Center for Urban and Regional Affairs (CURA) at the University of Minnesota). To them, there could never be too much subsidized housing in a poor non-white neighborhood. Footnote #4 content: See infra Part V (discussing Duckworth’s and Equity in Place’s views on subsidized housing). Equity in Place repeatedly asserted that this strategy would improve education and health and reduce local crime. Footnote #5 content: See infra Part III.D and Part III.E; see Goetz, Poverty-Pimping CDCs, supra note 2, at 609–10; Edward G. Goetz, From Breaking Down Barriers to Breaking Up Communities: The Spatial Strategies of Fair Housing Advocacy, 51 URB. AFFS. REV. 820, 822, 830 (2015) [hereinafter Goetz, From Breaking Down Barriers]; Memorandum from Edward G. Goetz to the Minnesota Advisory Committee to the United States Commission on Civil Rights (May 31, 2024) [hereinafter Goetz Memorandum]; EDWARD G. GOETZ ET AL., CTR. FOR URB. AND REG’L AFFS., U. MINN., THERE GOES THE NEIGHBORHOOD? THE IMPACT OF SUBSIDIZED MULTI-FAMILY HOUSING ON URBAN NEIGHBORHOODS 57, 79 (1996), https://hdl.handle.net/11299/204427 [https://perma.cc/Z3K3-JCNP] [hereinafter GOETZ ET AL., THERE GOES THE NEIGHBORHOOD?]; EDWARD G. GOETZ, THE ONE-WAY STREET OF INTEGRATION: FAIR HOUSING AND THE PURSUIT OF RACIAL JUSTICES IN AMERICAN CITIES 35 (2018) [hereinafter GOETZ, THE ONE-WAY STREET OF INTEGRATION]. They also argued that only racially homogeneous poor communities would create the requisite solidarity to make racial progress and foster equality in the Twin Cities. Footnote #6 content: See infra Part V (quoting Neeraj Mehta, co-founder of Equity in Place). The opponents of integration won, and this Article will examine both the debate and the effectiveness of their housing strategy in the neighborhood where it was most fully implemented.
In the Phillips neighborhood of Minneapolis, a $1 billion, “separate but equal,” government-funded strategy failed.
Over the last few decades, housing developers have convinced the government and philanthropists to provide them with $1 billion to improve education, public health, and public safety in the Phillips neighborhood in Minneapolis. Phillips includes roughly 7,500 households, and many of its residents are impoverished and unhealthy. Its children have been performing poorly in school and dropping out, and the area has been riddled with high crime rates. In exchange for the $1 billion, developers have provided 42% of all Phillips residents with subsidized apartment units, with the promise that these units would improve health and education and reduce crime in the neighborhood. The advocates of this strategy promised that their strategy would be more effective than allowing impoverished Phillips’ residents the opportunity to live in more mixed-income neighborhoods.
The public was not aware that new apartments in Phillips would cost one-third more—sometimes twice as much—as they would in suburban areas, such as Dakota County, a white suburban area south of Minneapolis, or that they would rent for more than the existing market rate apartments in Phillips. Footnote #7 content: Bill Lindeke, New Study on Affordable Housing Rekindles Long-Simmering Debate, MINNPOST (June 18, 2025), https://www.minnpost.com/cityscape/2025/06/new-study-on-affordable-housing- rekindles-long-simmering-debate/ [https://perma.cc/Z8MX-HZWH]; Ed Felien, Poverty Pimps and the Gentrification Scam, SOUTHSIDE PRIDE (Feb. 15, 2016), https://southsidepride.com/2016/02/15/poverty- pimps-and-the-gentrification-scam/[https://perma.cc/8VMZ-82GW]. The developers, who were overwhelmingly white, Footnote #8 content: In 2009, a survey showed that 80% of the employees of non-profit housing community were white, and 85% of managers and leaders were white. See NORA HALL & KAREN GRAY, CHANGING THE FACE OF HOUS. IN MINN., LEADERSHIP SURVEY REPORT (2d ed. 2008), https://www.fhfund.org/report/changing-the-face-of- housing-in-minnesota-leadership-survey-report [https://perma.cc/RBK7-SG6X]. The CDCs’ boards of directors had a similar makeup. Id. If anything, these numbers may understate the problem: the larger and more influential an organization is, the whiter its leaders tend to be. There has never been a follow up study. As a part of this report, the Institute on Metropolitan Opportunity sent out a survey to the community development corporations and major participants in the poverty housing industry. There were few responses. National Data is very similar with 80–85% of community development corporations led by white people. See Miriam Axel-Lute, Who Will Lead Community Development Corporations, SHELTERFORCE (August 23, 2017), https://shelterforce. org/2017/08/23/who-will-lead-community-development-corporations/ [https://perma.cc/9ZAE-HVKT] (noting that the private development work force that does most of the development of low-income housing is even whiter); Adisa Hargett-Robinson, How Black Real Estate Developers Are Breaking Ground for Underrepresented Communities, ABC NEWS (August 27, 2021), https://abcnews.com/Business/black-real-estate-developers-breaking-ground-underreprsented-communities/story?id=79123625 [https://perma.cc/Z74W- LYN4]. did not hire disadvantaged residents of Phillips or people of color to build their new homes and get good construction jobs. The public did not know that after it paid for the new apartments, the developers and investors would own them outright and could later sell them and thus get paid twice.
The developers got the $1 billion, but the conditions in Phillips did not improve. In fact, they got worse. Today, Phillips’ residents have the worst public health in the Twin Cities region, among the lowest performing schools (with only around 10% of children competent in math and reading), and the highest violent crime rate in the metropolitan area. Footnote #9 content: See infra Part II.A., Part II.B., Part II.C. and Methodology for documentation of the $1 billion expenditure.
This wasted money could have been better spent on community health racially and economically diverse magnet schools, after-school programs, and community violence prevention initiatives. It should also have been spent on real, affordable housing wherever the residents of Phillips themselves wanted to live, in the context of serious efforts to reduce educational and residential segregation across the Twin Cities metropolitan area.
These terrible conditions in Phillips set the stage for the murder of George Floyd and the resulting demonstrations and upheaval—locally, nationally, internationally—in its aftermath.
This Article will conclude by discussing new national evidence about the benefits of racial integration. It will then analyze the striking similarity between Equity in Place’s construction of the Fair Housing Act and that of the Trump Administration and argue that greater residential integration in the Twin Cities, and everywhere else, will dramatically decrease racial inequality.
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