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Census: MSP grows, but only on the edge; experts see trouble ahead

Experts say Minneapolis and St. Paul's failure to grow and the cities'   relative dearth of attractive urban-style neighborhoods hurts the region's competitive profile.
MinnPost photo by Steve Berg
Experts say Minneapolis/St. Paul's failure to grow and the cities' relative dearth of attractive urban-style neighborhoods hurts the region's competitive profile.

At first glance, the 2010 Census results seem satisfying and unremarkable. Only upon further review do they reveal unbalanced patterns of growth and wealth that spell trouble for Minneapolis-St. Paul as the metro economy tries to regain momentum.


The official count placed MSP's 13-county metro population at 3,278,833, up 10.4 percent from a decade ago. That was enough for the Twin Cities to retain its rank as the nation's 16th largest metro market. While the region grew 40 percent slower than during the go-go '90s, it still outpaced the 9.7 percent national rate, and it grew faster than all other Midwestern and Northeastern metros in the top 20.

That's the good news; now the bad. How the region grew should deeply trouble Minnesota's political, business and civic leaders. Virtually all growth was on the suburban edge, while the central cities and most inner suburbs lost both population and relative wealth. Not only did the cities of Minneapolis and St. Paul fail to gain population, they are now fully 30 percent poorer than the metro region as a whole.

That's not a healthy trend. Unless a more balanced growth pattern emerges, one that also includes the metro area's inner districts, and unless prosperity is shared more broadly, the MSP region will lag behind in competing for the young talent and high-quality jobs needed to keep pace as the economy recovers.

Imbalance hurts MSP's prospects
Here's how Bruce Katz, director of the Metropolitan Policy Program at the Brookings Institution in Washington, D.C., responded in an email:

"This is an unfortunate trend for a host of economic, fiscal, environmental and social reasons. Economic, because strong central cores enhance the ability of metros to attract and retain talented workers and innovative firms, yield real benefits associated with density and allow metros the reap the full returns on prior investments.

"Fiscal, because population (and job) dispersion across fragmented metro areas raise the cost of building and maintaining infrastructure and delivering basic services and lead to immense fiscal disparities (mitigated to some extent in MSP by tax sharing).

"Environmental, because population and job dispersion lengthen commutes, increase greenhouse gas emissions, and degrade land. In some metros, there are enormous issues associated with water scarcity.

"As for social, the dominant trend is the increasing suburbanization of poverty — which presents enormous challenges for the delivery of social programs and resources given low capacity and high demand in changing communities."

In other words, MSP, despite its stellar reputation for metropolitan planning, is growing in ways that are inefficient, unsustainable and noncompetitive.

No 'doughnut effect' in Denver, Seattle or Portland
Urban geographers sometimes refer to what may be happening to MSP as the doughnut effect, meaning the strengthening of the periphery at the expense of a core that's hollowing out. It's a sequence associated with economic decline, seen most dramatically over the last several decades in older Rust Belt cities like Detroit, Pittsburgh and Cleveland.

MSP's is not a Rust Belt economy, however. If, indeed, the region is in the early stages of doughnut disease, there must be another cause for it. I'm hard-pressed to name another major northern metro area in which the region as a whole is flourishing and registering double-digit growth while the central city and inner suburban populations are getting smaller and poorer. MSP's lopsided suburban growth is, then, something of a mystery.

Denver, Seattle and Portland offer a startling contrast. They are metro areas that MSP admires and regards as peers. Like MSP, all three are growing and thriving. But unlike MSP, their core cities are also thriving, adding big chunks of population. Each of the three peer metros grew by about 15 percent over the past decade. The cities of Denver and Seattle each grew by about 8 percent, each adding about 45,000 residents. Portland grew by about 10 percent, adding 55,000 residents.

The MSP metro, meanwhile, grew by more than 10 percent. But the cities of Minneapolis and St. Paul lost about 2,000 residents. Apparently, the cities of Denver, Seattle and Portland are more attractive choices for metro area residents — or perhaps they know something about infill development that Minneapolis and St. Paul have yet to discover.

MSP fails to match balanced growth of peer cities

 

Denver

Seattle

Portland

MSP

Metro population

2000 

2.1 million

3.0 million

1.9 million

3.0 million

Metro pop. 2010

2.4 million

3.5 million

2.2 million

3.3 million

% change 

+15.4

+15.6

+15.5

+10.4

Central city pop. 2000

555,000

563,000

529,000

670,000

Central city pop. 2010

600,000

609,000

584,000*

668,000

% change

+8.2

+8.0

+10.3

-.007

% in poverty Metro, 2009

10

10

11

9

% in poverty Central city, 2009

18

12

16

21

Source: U.S. Census Bureau / * A small amount of Portland's growth came by annexation

In any case, the Denver, Seattle and Portland metros present admirable examples of balanced growth patterns in which all segments share as the region moves ahead.

"Bottom line: MSP should be following the Denver, Seattle, Portland model," said Katz of the Brookings Institution. "Their settlement patterns are indicative of successful economies punching at the global level."

Concentrations of poverty impede MSP
One major clue emerges as to why the central cities and inner suburbs are failing to share in MSP's growth and relative prosperity: concentrations of racial poverty.

Data from the Census Bureau's American Community Survey, released last December, show the metro areas of MSP, Denver, Seattle and Portland with similar poverty rates, about 10 percent. The data show also that residents of the central cities of Denver, Seattle and Portland aren't much different from residents of their metro areas as a whole. City residents are more likely to be black or Hispanic, but not by much. They are poorer on average, but not by much.

MSP shows far sharper contrasts on race, income and location. Minneapolis and St. Paul households earn, on average, nearly $20,000 less per year than do metro residents as a whole. And they are 2.5 times more likely to live below the poverty line. Race continues to be an important element in the poverty picture. For more than a decade, MSP has been beset by one of the nation's largest black-white income gaps, and nothing in the ACS data suggests that that has changed. 

By contrast, Seattle households earn only $5,000 less on average than those in the metro area as a whole; race place a lesser role; and the city’s share of those living in poverty is only a fraction greater than the metrowide share.

In sum, the tragic American link between race and poverty may partly explain the failure of Minneapolis and St. Paul to attract a larger share of middle class population growth. Other theories include: Midwestern preferences for suburban living; the physical attractiveness of Twin Cities suburbs; a relative lack of traffic congestion; a conservative banking and development community and political trends that reward suburban interests.

Will MSP get stuck in the 20th century?
John Norquist, CEO of the Congress for New Urbanism (and the former mayor of Milwaukee), suggested that complex or outdated city codes and a time-consuming permitting process also could have stifled infill development in Minneapolis and St. Paul, along with a strong tradition of neighborhood opposition to density. "It's up to the cities to make themselves more competitive," he said.

Christopher Leinberger, an expert on metropolitan real estate and author of the book "The Option of Urbanism," agreed with Norquist's assessment and expressed alarm over MSP's imbalanced census results.

"My concern for the Twin Cities is that, despite your impressive educational and corporate platform, you're not positioning yourself for the future market. The U.S. is dividing into 21st century metros with lots of urban growth, vitality and walkable urban-style places, and spread-out, suburban-style 20th century metros, and you're headed for the latter group. You still think it's 1970. People who think like that will be lapped. They'll wake up one day soon working for the same wages as the Chinese while those in 21st century cities will be the innovators and the ones who prosper."

Leinberger credits MSP for finally moving ahead on light rail and for beginning to understand its importance as a catalyst for urban revival. But he regards the first line (Hiawatha) a flop because Minneapolis failed to rezone and encourage development near stations. "It was designed primarily to move people, not to encourage development. That was wrong. You got the goals and means mixed up. It's a shame because with so little development to show for Hiawatha it's now much harder to build Central and Southwest."

It's "illusionary," he said, for MSP to use Denver, Seattle and Portland as peer models because they are so far ahead in their ability to use urban design to attract new jobs and residents. In a sobering summation, Leinberger described MSP as a "schizophrenic place" that can't decide whether it wants to do the hard work of retrofitting its central cities and inner suburbs for the 21st century or just revert to the old ways. "So far," he said, "the 'What me worry?' folks seem to be winning out."

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Comments (17)

Good to have you back, Steve.

I hate to hear this news but I am afraid that there is a high dose of accuracy in it.

Add to this the outright dislike/mistrust the Republican leadership has for the core cities, the wails of protest that accompany any inconvenience sparked by LRT construction, and the prospect of deep cuts at the University.

It is difficult to see any of these trends turning around significantly.

An interesting choice of photo for this story. It wasn't so long ago that the north of downtown was home to machine shops and other small manufacturers which employed middle class Minnesotans. Lots of factors killed that: globalization, the high cost of doing business in Minneapolis, and a city council convinced that the best use of an old industrial building is a high-end loft. The days of the small machine shop are pretty much over, at least in the US, but Minnesota manufacturing still has life, albeit in a consolidated form, and it's relocated to places like Rogers and other exurbs where - go figure - growth is stronger and wealth accumulates.

There are so many factors at play here, but it wouldn't hurt if the folks in charge of economic development in the urban core started thinking about policies that might attract the kinds of jobs that are now flowing to cities 20+ miles from downtown.

Without wishing to offend – I’m a newbie here, myself, and am still learning how the metro area works, or doesn’t – I've come across the term "smug" in regard to Minnesota and the MSP metro, and perhaps it's justified. The implication that there's a mistaken belief that all’s right with the world here, and nothing substantive needs to be done to alter the patterns and procedures that have been followed for the past generation certainly seems to fit the census data.

I came from metro Denver, which has its own issues, as does every urban area in the country, but metro Denver voters made a multibillion-dollar commitment to light rail transit – at least partially stalled by the economic collapse – as a means to both eliminate highway congestion and spur local economic development. One of the constants of improved transit is the added value produced by the ability to get around an area conveniently and relatively inexpensively. That seems to be one of the obvious, but often overlooked, ingredients in continued and ongoing economic and social success.

Relying on individuals to provide their own transit works if nothing needs to be done with any dispatch (see: 18th century), or when energy sources are both plentiful and cheap (see: 1955). 1955 is about where the current ideological rigidity of the political right is stuck. When speed and cost are important factors, a thriving public transit system – fast, efficient, flexible, accessible – seems imperative. Cities that “work,” that is, they’re thriving economically and socially, have cheap, convenient, and reliably functional public transit – the sort of thing many American cities generally had until the age of the automobile provided a spurious rationale for making things like density, commuter trains and streetcars seem entirely negative. As energy gets more expensive, outer ring suburbs will not only be inconvenient in their current role, they won’t survive unless they have their own local economies. A few may be able to meet that criterion, but certainly not all of them.

Before I lived in Denver, however, I spent half a century in metro St. Louis, which has served as a reluctant poster child for the "doughnut hole" phenomenon for many years, and continues to do so. While Minneapolis lost about 40 people in the past decade, and St. Paul lost about 2,000, St. Louis lost 29,000 people. Things here could be a lot worse.

“Schizophrenic” might be an appropriate descriptive term for both the Twin Cities metro and the state as a whole, by the way. A coherent vision of how to approach the unknowable future with the necessary combination of flexibility and determination to reach goals beneficial to the area and all – not just some – of its people, seems essential. The devil, of course, is in the details of how to arrive at that vision, and how to achieve it. For every group that wants change, there seems to be an equivalent group for which the term “smug” is accurate.

It's really frustrating, isn't it? I blame a lot of it on the Jeffersonian grid system which gave us a road almost every mile and lent to our pattern of townships -- many of which incorporated in the last several decades. We have so many 25- to 36-square-mile "cities" around here that it's scary. Of course, regional planning with the Met Council, MUSA boundary, and other regional organizations helps a bit, but it's an uphill battle because so many communities have decided to go it alone.

I'd encourage the Met Council to be much more strict about the MUSA boundary, and use LEED-ND or a similar system to find the best places for reuse and infill -- possibly backed with monetary packages to entice development (I'd prefer to see up-front incentives rather than long-term tax breaks, though there's barely any money for that right now).

There seems to be an overwhelming pressure to make new stuff -- whether new roads, new homes, new shopping centers, or entire new towns -- rather than reinvest in what already exists. That might partly be due to the lack of investment in older properties and infrastructure -- the picture of the road at the top of the article is a telling example. Two or three blocks away from the brand-new Target Field is a road with century-old bricks exposed to the elements.

The "broken windows" theory doesn't just apply to windows -- it applies to everything that we see. The throwaway mentality we have in regard to buildings and infrastructure needs to be undone. There needs to be reinvestment in our streets and sidewalks, and everything below and above. Ancient cities around the world seem new and alive, yet we have streets and suburbs less than a century old which are on the decline.

I'll partially agree with Leinberger's assessment of the Hiawatha Line -- it's amazing how many people only take it to the Mall of America and back. The average rider lives more than three miles away from the rails! That's good in a certain sense, but shows how its potential hasn't quite been tapped in the right way.

Brilliant and insightful piece, Steve. Thanks for digging this out of all the data.

You make a good point about the Hiawatha Line and its failure to spur any development.

Is there any reason to believe that the same thing won't happen with the Central Line? All these businesses along University Av are up-in-arms because they think the new line will elicit a bunch of demand and cause land prices to soar. Why?? First off, there're MILES of land on both sides of University that needs redevelopment. It's not like the place is crowded. Second, it's arguably a less-desirable area than anywhere along Hiawatha.

I take issue with the contention that a light rail line appearing will suddenly cause a bunch of development. It didn't happen with the Hiawatha Line and I don't think it will happen with the Central Line.

The latest census results offers more reason(s) as to why the central cities of Minneapolis and St. Paul should either merge or have the ability to annex neighboring suburbs. There is absolutely no reason for having over 330 suburbs in the TC area.

I have heard people discuss and read about the idea of a merger between Minneapolis and St. Paul. At first I thought it was absurd, but now I think a merger would give the new, merged city a chance to grow and keep up with other growing cities (i.e. Denver, Seattle, Portland, Charlotte, Austin, etc...).
Call it MPLS - STPL, or STPL - MPLS depending on what city one resides or where a national news event is taking place. Think Winston-Salem, NC, which is larger in terms of land area than MPLS - STPL combined.

Obviously a merger or the annexation of inner-ring suburbs wouldn't solve all problems, but it would help with national and even world perceptions. More people also means more federal funding.

Great article. I'd love to see what the growth patterns were for the region from 2000-2005 and 2005 to 2010. My guess is that most of that 10 percent growth took place in the first half of the decade while the latter half saw stagnant if not reduced outer edge growth. High gas prices and changing values of persons in mid-20's and early should help stabilize the inner core of the metro area.

Anecdotal evidence and my gut feeling makes me think Dean (#8) is definitely onto something here. Unfortunately for the theory's sake, Steve pulled his data from the census for this piece, which means we can only view the decade as a whole instead of breaking it down into halves and seeing if the trend changed at all.

I do agree with your concern about growth and where it is occurring. In 1970, Minneapolis had about 177,000 housing unit.Today it has about 178,500 housing units, a number that has barely budged. But the issue is more complex than that. In that time, we developed a downtown neighborhood, dense housing where none was before. If the number of houses is flat and we have a bunch of new housing, where are we losing housing? The Census shows dramatic losses in the Near North area in particular. Some census tracts show population declines as much as 30% in ten years. That is as much as Detroit. The New York Times has a mapping tool that lets you quickly see this trend of growth in the downtown but also huge population losses in Near North in particular.

http://projects.nytimes.com/census/2010/map?hp

There are a couple things going on with the population figures. One is the mortgage crisis. The poor areas of the city were hardest hit and the declines in population are reflective of this. There is vacant housing where people used to live. But also,there has been a trend to demolish housing. This is a trend that has been accelerated by the mortgage crisis.

So the question isn't that we are failing to create new housing in the center cities. For Minneapolis, we are failing to stop demolishing housing. Or another way to look at it is that housing is migrating out of poor areas and into wealthier areas. It is odd to think that a house would up and move but this is the net result, that housing units are rearranging themselves out of poor areas into the downtown, albeit at a glacial pace.

Why should we care? We are projected to get another million people in the region in the next twenty years or so. They have to live somewhere. The Met Council projects that 30% of this growth will occur within developed areas like Minneapolis. Yet our history shows that this hasn't been occurring. If it doesn't, it will cost this region billions and billions of dollars as infrastructure is extended further and further out. We need more housing units in the core where they don't require more highways or sewer systems or schools. It is a simple fiscal necessity.

What do we need to do to achieve this? We do need to make it easier to build new housing. But we also need to make it easier to rehab old housing. City rules can be extremely burdensome when rehabbing an old house. When property goes into foreclosure, we need to keep people in those properties instead of leaving them vacant for thieves to strip. We need to stop dividing lots when houses are removed. Instead, we need to market those for new housing. We also need to continue to hammer on the issues of disparate access to capital by minority groups. It wasn't a coincidence that the fraudulent mortgages were marketed first to our minority communities who struggle for capital through traditional means.

We also need to continue to do the things that make a place attractive. Crime is down substantially but we need to make investments in infrastructure and schools to attract more investment back into these areas. This becomes extremely difficult with the cuts in LGA and to schools with struggling students that are proposed currently at the Legislature.

Maybe most of all though, I have faith in our community itself. Even in the hardest hit parts of Minneapolis, we see harbingers of change. The artist community is moving into North Minneapolis as is the gay community. For forty years now, they have been the leading indicators of change. Hopefully they can help bring stability so we can preserve more of our housing and truly increase the availability of housing in our core.

Another factor I haven't seen mentioned is natural boundaries. The Twin Cities, like most mid-western cities, are surrounded by flat farmland. Infrastructure notwithstanding, it's easy to grow outwards. Unfortunately, our elected officials have seen fit to heavily subsidize the infrastructure to the outer reaches of the metro area and hence there's no serious barrier to outward growth as long as people are willing to do all that driving - that's not for me, but they seem to like it. :S

I think it's imperative that we stop paying for that infrastructure. As well as streamlining processes and regulations that seem to be hindering development in the core city (I don't know much about that, but that's what I'm hearing above.) These seem like positions the Republicans could champion (less spending, less regulation) but they are too busy attacking school teachers and such. :P

Excellent Steve Berg article on MSP census data - ought to be required reading for new met council members AND for legislators, who seem not to understand the importance of central cities to region!

I suspect that transportation infrastructure investment plays a big role. Several years ago, a colleague and I met with Portland Metro's transportation planners. When we asked them how they ranked highway projects, they simply said that they don't do them anymore. When stimulus funds were first made available a couple of years ago, MnDOT was ready to spend the entire amount on two projects - extending 610 across the northwest suburbs and building an interchange at 494 and 169. The legislature had to intervene to spread the money around the region by shifting some funds to maintenance projects which actually generated more jobs. We recently built Highway 212 to the southwestern suburbs and the $700 million Stillwater bridge seems to be gaining support.

Portland is working on its 6th light rail line and a significant expansion of its streetcar system. We're just starting work on our second light rail line and serious planning for streetcars is just beginning.

As long as we invest in making it easier to get around in the burbs and not in the cities, development will keep happening out there.

Leinberger often gets it right, but he's got the wrong boogeyman in blaming the lack of economic development near Hiawatha because the city "failed to rezone." Not only did the city rezone for transit oriented development, it approved every proposed housing development that came along adjacent to the LRT line, and invested millions in gap financing for affordable housing.

In my opinion, the city failed to appreciate the level of public investment needed to transform the physical infrastructure of an industrial corridor to TOD. A six lane highway, vacant grain silos, and an active heavy rail corridor will all continue to hinder TOD in the years ahead.

I would have to argue with Gary Schiff on the zoning around Hiawatha. It was a choice in the project to put in low density housing on the right of way that was publicly owned. This was arrived at by asking the surrounding community what type of development that they wanted. What they wanted (unsurprisingly) to have single family housing like they lived in. So now, when you drive along Hiawatha, you see a sea of new single family houses and small townhouses. Instead, we could have built substantially higher density on those properties. It wouldn't have been what the neighborhoods wanted but it would have been a better option for the region. The problem with zoning is that it exists to lock in current land use. Changing over those single family homes into much higher density development will now be almost impossible, leaving the potential of Hiawatha untapped.

It seems we're failing to ask a basic question. It's not just a matter of what decisions are made. Who makes the decisions? The answer isn't tough: people who profit from exurban expansion. We transfer resources from the core to the edge, and then wow, the edge is growing and the core is shrinking. It's not a surprise we have the development we have when the government was run over the last decade by people who wanted to promote development at the edge and have a hostility to cities. If hostility is too strong a word, look at what gets said about Minneapolis and St. Paul in the legislature.

Great work, Steve. Your photo says it all - the newest hippest neighborhood in the city has a public realm that looks like that!? Regarding, Gary Schiff's comment, there is much work to do along the Hiawatha Line. The market is there for a lot of good stuff - let's give developers a little more density in return for an improved public realm.