HUD Launches Investigation into Minneapolis Housing Policies Over Racial Equity Concerns

The Department of Housing and Urban Development launched an investigation into Minneapolis’s housing policies Thursday, alleging the city’s practices illegally prioritize resources based on race and national origin, according to documents obtained exclusively by Fox News Digital.

Assistant Secretary for Fair Housing and Equal Opportunity Craig Trainor sent a formal letter to Minneapolis Mayor Jacob Frey informing him of the probe, which will examine whether the city violated the Fair Housing Act and Title VI of the Civil Rights Act through its housing plans, equity directives, and resource allocation strategies.

“Minnesota has been ground zero for fraud and corruption because it plays a cynical game of racial and ethnic politics,” HUD Secretary Scott Turner told Fox News Digital. “This goes against our values as Americans, united by a common heritage, language and commitment to equal treatment under law.”

The investigation specifically targets language in the city’s “Minneapolis 2040” comprehensive plan and its Strategic and Racial Equity Action Plan. HUD officials cited passages that commit to “making available and allocating housing resources based on race and nationality,” which they claim raises serious federal civil rights concerns.

The Minneapolis 2040 plan, adopted in 2020 during Frey’s administration, includes provisions for establishing “cultural districts” described as areas “with a rich sense of cultural and/or linguistic identity rooted in communities significantly populated by people of color, Indigenous people, and/or immigrants.” The plan explicitly aims to “eliminate disparities among people of color and indigenous peoples compared with white people.”

Similarly, the city’s Strategic and Racial Equity Action guide instructs municipal departments to align racial equity goals with their plans, programs, and budgets. One example cited in Trainor’s letter references the Community Planning and Economic Development department’s priority to provide “rental housing for Black, Indigenous, People of Color and Immigrant communities” by “leveraging its rental licensing authority.”

“That is not going to fly,” Trainor wrote in his letter to Frey.

The investigation comes amid a broader crisis in Minnesota involving alleged widespread fraud in government assistance programs. Federal prosecutors have charged nearly 100 people, many from Minnesota’s Somali community, in connection with an alleged COVID-era scheme involving money laundering tied to multiple social service programs. The total fraud could reach more than $9 billion, according to federal estimates.

The scandal has already had political ramifications, with Democratic Governor Tim Walz ending his re-election bid in January while acknowledging that the wrongdoing occurred during his tenure. Walz took responsibility for oversight failures but argued that Republicans had “sensationalized” the multibillion-dollar figures.

Mayor Frey previously stated that “obviously, everybody could have done more to prevent” fraud, but cautioned against holding “an entire community, any community, accountable for the actions of individuals,” referring to the Somali community.

Turner, who joined HUD at the start of the year, said his department already had investigators on the ground in Minnesota examining how public housing funds are being administered. “We have investigators making sure that any HUD-funded programs in Minnesota are being carried out appropriately,” he explained, noting that Minneapolis receives approximately $108 million for its public housing authorities and an additional $46 million in public housing assistance.

“I will continue to deliver on President Trump’s promise to support affordable housing for American families, in part by dismantling illegal racial and ethnic preferences that deny Americans their right to equal protection under the law,” Turner said. “I am committed to delivering on this promise by thoroughly investigating any housing discrimination involving the City of Minneapolis.”

The investigation occurs against a backdrop of tension in Minneapolis, where protests have erupted and demonstrators have clashed with federal law enforcement deployed to the state during the fraud investigations. These tensions escalated following the fatal shooting of a woman by an Immigration and Customs Enforcement agent in early January after she allegedly attempted to use her vehicle as a weapon against a federal officer.

Fox News Digital reached out to Mayor Frey’s office for comment but did not receive an immediate response.