The Role of the State in Advancing Community Wealth Building
A Case Study of the Twin Cities
Benjamin Tsai (Nexus), Sarah Wang (Center for Economic Democracy), and Nairuti Shastry (Center for Economic Democracy)
Within any social movement, achieving its political goals may involve different levels of engagement with the government apparatus, or the state. When it comes to Community Wealth Building (CWB), we know that the support of local and state governments is especially critical for the long-term success of CWB efforts. Not only can the state pass legislation and provide financial resources to create a more enabling environment for CWB activity, but local governments can also exercise soft power by convening key stakeholders and preserving institutional memory of projects past.
In this paper, we examine the role of the state in advancing key elements of CWB in the Twin Cities (Minneapolis and Saint Paul) in Minnesota. We begin with an introduction of the Twin Cities and CWB leaders’ overarching relationship to the state. Then, we examine two key examples of working with(in) local municipalities to advance CWB in the region: the Saint Paul Local Fund and the BLUU Cooperative. We discuss the general architecture and provide a preliminary assessment of the impact of each example followed by potential challenges and limitations. We conclude with a brief discussion of government and community CWB leaders in the Twin Cities who may expand citizen participation in governance, drawing on frameworks of economic democracy developed by Archon Fung and Erik Olin Wright.
Introduction to the Twin Cities, Nexus Community Partners, and the State’s Relationship to CWB
Home to over 3.1 million people spread across seven counties, the Twin Cities are the most populous areas of the state and named one of the best places to live in the U.S. (US News & World Report 2024). While the area is the most racially diverse in Minnesota (DEED Labor Market Information Office 2024), like many American metropolitan areas, the Twin Cities have been shaped by long-standing racial disparities. Median household income ranges from as low as $16,500 to as high as $250,000, while the rate of homeownership is less than 5% in some census tracts (Metropolitan Council 2024) – the lowest among Black Americans of any U.S. city (Miller 2020). Furthermore, the poverty rate for Black residents in the Twin Cities is four times the rate of their White neighbors (Minneapolis 2040 2026). Minnesota’s Employment and Economic Development (DEED) agency highlighted the issue, stating, “[it is] estimated that 22.4% of the region’s Black or African-American population was below the poverty level, compared to just 5.6% of the White population” (DEED 2022). In 2020, this decades-long tension culminated in the murder of George Floyd in Minneapolis at the hands of a group of police officers (Hill et al 2020).
Well before Floyd’s death, and perhaps increasingly so as a result, residents of the Twin Cities are motivated to create change. From the collective ways of the regional Native communities to the politics of social democracy brought over by early Scandinavian immigrants to the recent influx of Hmong and East African immigrants, the ethos of the Twin Cities has been grounded in deep solidarity. In fact, the Cities were at the epicenter of the food cooperative movement in the late twentieth century. According to Nexus Community Partners founder, President, and CEO, Repa Mekha, the region has been a sort of laboratory for progressivism, echoed by the state at large (Edelman 2023). Mekha shares that the sense of collaboration and camaraderie among residents is fertile ground for innovation.
Since 2016, Nexus has worked to build community wealth—advocating and advising around cooperative models (through their Shared Ownership Center), providing seed grants to start culturally-focused nonprofits, and supporting leadership development (through their Boards and Commissions Leadership Institute).
Over the years, the work of Nexus and the overarching principles of CWB have received some support from the public sector, including from Mayor Melvin Carter of Saint Paul, who has been a champion for cooperatives and progressive economic development strategies (e.g. a guaranteed income pilot, newborn college savings accounts). The City of Minneapolis has also supported cooperative development with its one-time Co-op Creation Fund and its long-standing Cooperative Technical Assistance Program (CTAP).
Case Study #1: Saint Paul Local Fund
Over the past eight years under the leadership of Mayor Carter, Saint Paul has been leading the development of several ground-breaking initiatives, including a guaranteed income pilot, subsidized child college accounts, and, more recently, the Local Fund, which supports cooperative development in the region.
Though launched by the City in 2024 using American Rescue Plan (ARP) funds, community leaders, topical experts, and other nonprofit organizations worked collaboratively with local government to design the architecture of the Fund as well as its priorities and tactics. In particular, community leaders and residents were already actively organizing real estate cooperatives, efforts which served as proof of both community interest and need. As a result, the Fund was developed to support cooperative development—both worker ownership (via worker co-ops) and community-owned real estate (mainly via co-ops and land trusts).
To implement the program, Nexus was selected from a competitive RFP process. Because the City paid for contractor services via reimbursements, only a large, well-resourced nonprofit like Nexus was able to front enough money to manage the Fund. To create the program structure and policies, open and constructive dialogue between Nexus and City staff was key. The complexity of navigating multiple levels of government regulation required dedicated and thorough engagement—from both parties, especially by clearly designated staff liaisons at the City. Not only did this level of partnership enable Nexus to easily navigate government bureaucracy, but it also supported the efficiency of program adjustments over time. It was also valuable to hire consultants with deep experience working with public, private, and nonprofit actors. These subject matter experts were able to advocate effectively for CWB.
Today, the Worker Ownership (WO) and Community Ownership (CO) programs of the Local Fund have leveraged a total of $2.5 million for technical assistance (TA) and grants. TA is offered on a range of topics, including feasibility analysis, business and financial planning services, and the establishment of cooperative business structures. WO grants support business expansion or start-ups, Emergency Financial Hardship Assistance, and the construction of commercial properties, while CO grants fund pre-development costs as well as the money needed for acquisition and rehabilitation.
As of January 2026, the Local Fund has awarded $420,000 to four Saint Paul worker-owned cooperatives, $125,000 to a real estate cooperative, and $150,000 to a community land trust. It has also provided technical assistance to 10 co-ops and startups.
Challenges and Adaptations
Though the Local Fund is fairly nascent and currently active, there are a few learnings to be gleaned at this stage, particularly related to eligibility, funding, and governance.
Because the Local Fund uses ARP money, there is a fairly narrow interpretation of eligibility. For example, the CO program can only support projects that fall within the intersection of multiple criteria, including being in a qualified census tract, having a commercial component, and being on the City’s vacant building list (VBL). It was discovered that almost half of the actual vacant buildings—especially those that were not condemned, but still vacant—were not on the City’s VBL because owners of such buildings were disincentivized from having their building on the list due to high fees, code compliance, and potential assessments. Together, these criteria effectively excluded most financially viable properties, even with grant money factored in. Ongoing discussions with the city are leading to adjustments to the criteria, which will hopefully increase the number of eligible properties, thereby giving CO entities more viable options.
Next, as a result of the restrictions (and inherent time constraints) of ARP dollars, having other streams of funding—like private dollars from philanthropy—on hand was critical. Thankfully, organizations like Government Alliance on Race and Equity (GARE) stepped in to provide gap funding prior to the launch of the fund.
Case Study #2: The BLUU Northside Housing Cooperative Initiative
Drawing on the Unitarian Universalist faith tradition, the Black Lives of Unitarian Universalism (BLUU) Cooperative Housing Initiative was launched in the summer of 2019 with the goal of expanding home ownership for Black and Indigenous families in North Minneapolis.
In partnership with Urban Homeworks (UHW), BLUU is working to transform vacant lots into seventeen units of affordable housing. To realize their model of a limited-equity equity housing cooperative—a residential community owned and democratically managed by the cooperative members themselves, who are typically residents—BLUU is partnering with the City of Minneapolis,LISC Twin Cities, the Greater Minnesota Housing Fund, and Shared Capital Cooperative to provide funding and technical assistance, as well as political advocacy for the project. Initially, there was no formal city program to sufficiently fund the project, but city staff worked with BLUU and other partners to sketch out an innovative framework that allowed for public financing for the development of the cooperative.
Phase 1, the construction of the first three townhomes, is currently underway and is expected to be complete by February 2026. According to BLUU Executive Director, Lena K. Gardner, “Our model…[allows families to build] some wealth as they are living in the cooperative. Building wealth is something that doesn’t exist in much affordable rental housing because that hasn’t been the model. But our approach is also about spreading out the risk, collectivizing as much of it as we can, so that the individual impact is lessened from individual families” (UUWorld 2024).
Challenges and Adaptations
While a financing work-around was found for the first phase of construction without embedding public money for the cooperative into a city program or policy, there is a lack of clarity on how to fund future phases. The ad-hoc nature of funding has been further complicated by the turnover of key city staff who were strong advocates for CWB activity.
Increasing Impact by Deepening Democracy
What might narrowing the gap between governance and government (E4E 2021) in the Twin Cities look like? The two cases discussed have created meaningful investment in community projects to advance cooperative ownership and development, with varying degrees of engagement with the State. From a governance perspective, what would it look like for city leaders to expand citizen participation in and control of more programs? As residents organize to meet their collective needs in these hard times, how can cities become more responsive and accountable to community priorities?
In sociologist Erik Olin Wright and political scientist Archon Fung’s 2003 work, Deepening Democracy, they present a slew of empirical democratic innovations, summarized in an overarching model, Empowered Participatory Governance (EPG), in which citizens re-engage and transform their relationship to state power. As they write, the success of these experiments relies “upon the commitment and capacities of ordinary people to make sensible decisions through reasoned deliberation and empowered because they attempt to tie action to discussion” (Wright and Fung 2003, 5).
So how might we apply EPG to the specific context of municipal support for cooperative development? For example, the Saint Paul Local Fund successfully took initial steps to increase community participation. Its design emerged from trusted relationships and local experimentation. Community members also sit on Local Fund grant committees to make decisions on which projects receive funding. Future efforts to deepen shared governance may include: participatory budgeting to provide funding for programs focused on co-op development and shared ownership (involving subsidized technical support and grants); feedback on city procurement policies prioritizing cooperatives; developing public-cooperative partnerships for city services; and/or involvement of and decision-making authority given to everyday citizens to define labor and social protections (leveling the playing field by guarding against a “race to the bottom” competitive business landscape). These opportunities would push the Cities beyond consultation or placation with partners, and towards shared power, where communities and governments work together to both make and implement decisions.
Ultimately, moving towards shared governance is a long-term project that requires building infrastructure for shared power. A commitment to building this approach in Minneapolis and Saint Paul would move this work from CWB administered by the state to CWB owned and stewarded by the people, laying the groundwork for a truly democratic economy.
References
Abers, Rebecca Neaera, Gianpaolo Baiocchi, and Joshua Cohen. 2011. Deepening Democracy: Institutional Innovations in Empowered Participatory Governance. Edited by Archon Fung and Erik Olin Wright. London: Verso.
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Hill, Evan, Ainara Tiefenthäler, Christiaan Triebert, Drew Jordan, Haley Willis, and Robin Stein. June 1, 2020. “How George Floyd Was Killed in Police Custody.” The New York Times. https://www.nytimes.com/2020/05/31/us/george-floyd-investigation.html.
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Metropolitan Council. “Equity Considerations Dataset.” Accessed January 23, 2026. https://metrocouncil.org.
NBC News. April 29, 2023. “How Minnesota Is Becoming a Laboratory in Pushing Progressive Policy.” https://www.nbcnews.com/politics/politics-news/minnesota-becoming-laboratory-progressive-policy-rcna79816.
O’Neill, Tim. 2024. Twin Cities Metro Regional Disparities by Race and Origin. DEED Labor Market Information Office. https://mn.gov/deed/assets/24-02TC_tcm1045-341196.pdf.
“U.S. News Ranks the 50 States.” Accessed January 23, 2026. https://www.usnews.com/news/best-states/rankings.
“What Is the BLUU Northside Housing Cooperative Initiative? Get More Information and See Photos from the Groundbreaking. | UU World Magazine.” Accessed January 23, 2026. https://www.uuworld.org/articles/north-minneapolis-affordable-housing-initiative-bluu-urban-homeworks-what-to-know-lena-k-gardner-unitarian-universalism.
Ben Tsai is the Director of the Shared Ownership Center at Nexus, where he supports community wealth-building and economic democracy through innovative ownership models. He specializes in offering technical assistance to cooperatives, community investment funds, and other democratically governed enterprises.
Sarah Wang is the Education Programs and Research Manager at the Center for Economic Democracy (CED). She has a background as a popular educator and youth organizer, particularly working with the Chinese immigrant community in Boston. She has been trained in popular education pedagogy and holds a Bachelor of Arts in Psychology from Harvard University.
Nairuti Shastry is the inaugural Director of Policy & Research at CED, where she leads the organization's translocal efforts to seed an economy that works for us all. Prior to joining CED, Nairuti spent eight years as a movement operative, supporting organizations and communities to hospice the old and birth the new in pursuit of more just economic futures. Nairuti holds a BA in sociology, French & Francophone studies, and public health from William & Mary.