Planning makes a comeback: Getting the Twin Cities ready for the next economy

Thinking ahead isn’t something Americans are good at. We’d rather spend money now than save for later. Our politicians worry about the next election, not the next generation. Our companies obsess over quarterly earnings. We’d rather not “get ahead of ourselves.” Indeed, planning, as a public discipline, is demonized in some circles as social engineering, a kind of radical interference in the natural order of the market.

But since the onset of the Great Recession in 2008, when arguably the absence of sound planning sent the housing and financial markets into a tailspin, planning has made a comeback. With almost no new homes and businesses coming out of the ground, urban planners and thinkers have had a lot of time to anticipate what’s likely to come next and to position their communities to take advantage when construction resumes.

Mostly they expect an era of scarce resources and heightened competition. Future prosperity will be won by those metropolitan regions that have taken advantage of the lull to recalibrate themselves to a “new normal.” Cities that are ready for compact development, energy savings, alternatives to driving, aggressive workforce training and quality-of-life attractions will have a leg up.

That’s the back story to why 50 high-level metro planners and advocates gathered on Monday at the McKnight Foundation’s riverfront digs in downtown Minneapolis to discuss, of all things, indicators.

If money is to be scarce, then precise, reliable indicators will be needed to measure progress in meeting the demands a changed marketplace. Finding ways to measure “sustainable growth,” for example, or “plentiful housing and transportation choices,” or “unified regional prosperity” will give the Minneapolis-St. Paul metro a better chance to win the prized federal funds and foundation grants needed to compete with rivals.

Trading space for place
Among the indicators selected: ways to measure, infill development, population density, housing choices, access to transit, infrastructure preservation vs. new infrastructure construction, water quality in urban lakes, carbon generation and child poverty.

It sounds like wonky stuff, but the aim is to use statistics to show where MSP should focus its efforts to match the next market. Conditions are changing.

Start with influence of demographics on housing types. By 2020, two big segments of the population will boom — those between 55 and 70 and those between 25 and 40 — while the middle segment (40-55) will decline, bringing a steep reduction in the percentage of households with children.

The upshot? Low demand for traditional single-family homes and much higher demand for small-lot homes and urban-style apartments and condos.

“Seventy-seven percent of Generation Y plans to live in an urban core,” according to the Washington-based real estate research firm RCLCO. [PDF]

The market for those first-time buyers/renters will be the largest ever between 2013 and 2018, the firm projects. These young customers (born mostly in the 1980s and ’90s) hope to live in walkable, close-in neighborhoods, the firm says. The big challenge will be to produce infill housing in both the cities and suburbs that they can afford.

 The overall trend, RCLCO says, is a greater desire for high-quality density, or, as it says, “trading place for space.”

Transit service is an important draw, research shows. RCLCO found, for example, that Portland’s $54 million investment in streetcars produced $3.8 billion in infill development, precisely the kind of housing and urban context that future customers are hoping for.

Shifting jobs away from transit
At Monday’s meeting, Caren Dewar, director of MSP’s Urban Land Institute office, urged the group to take note of these market changes and asked for more emphasis on economic development and workforce training. Others, including Russ Adams, director of the Alliance for Metropolitan Stability, asked for more attention to MSP’s extraordinary income gap between whites and non-whites.

Another indicator that received too little attention, in my view, was job location. There was plenty of talk about gathering data on the number of homes built near transit lines, but none on jobs near transit.

It has been too easy for employers to simply shift jobs away from transit, often to what seems a cheaper location on the metro periphery, reachable only by car. As it turns out, those are expensive decisions. They add to traffic congestion and pollution as well as to the cost of roads and the commuting cost for employees. This shift of jobs away from transit-rich areas has been a clear trend in the MSP metro, but hasn’t received much attention.

Downtown Minneapolis offers a prime example. The real-estate research firm CBRE found that 24 times more office space was added in the western suburbs between 2002 and 2008 than in downtown, which has the metro’s largest share of transit service. According to the Center for Transit Oriented Development, the Hiawatha light rail line, while a success in attracting riders and housing (more than 6 million square feet downtown, according to one accounting), has been a failure in attracting jobs. Indeed, by some counts, downtown has lost 10,000 jobs since Hiawatha’s arrival in 2003. Large expanses of undeveloped commercial property lie adjacent to four of five downtown light rail stations.

Hiawatha Line
MinnPost photo by Raoul Benavides
The Hiawatha Line, while a success in attracting riders and housing, has been a failure in attracting jobs.

Emerging economy could exacerbate trend
My concern is that the emerging economy, with its emphasis on low-end jobs, will exacerbate this trend. Companies won’t want to add back-office jobs in the high-land-price locations served by transit. Banks, meanwhile, may be more willing to lend money for simple construction projects in remote locations rather than on the more complex sites that tend to be served by transit. As jobs begin to reappear, measuring job location trends will be important.

Mark Vander Schaaf, director of planning and growth management at the Metropolitan Council, said planners are aware of the mismatch. There’s nothing much that can be done, he said, other than “getting more in the heads” of corporate decision makers. In other words, there must be a better awareness about marketing transit-oriented job locations to private firms.

But not only to private firms. It’s ironic that government has set such a poor example. While Minneapolis touts its transit-friendly downtown, its school board recently turned down a new headquarters site near a light rail station and chose instead a site that will encourage employees to drive. That decision came a few years after the city’s Park Board shifted its headquarters away from a transit station to a car-dependent site. And just last week, Hennepin County announced it would move 300 employees away from a downtown light rail station to a new site in Brooklyn Park.

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Comments (10)

  1. Submitted by Arvonne Fraser on 08/25/2010 - 11:27 am.

    Excellent report. The mis-match between where people want to live and economic development–business and government plans to move off transit byways should concern all of us. We, in the new University District Alliance, are trying to promote “live near your work” and make our neighborhoods in the city attractive places to live and visit. Businesses and government should understand they have an obligation to help promote less driving and more use of mass transit because it will be good for all of us.

  2. Submitted by Bernice Vetsch on 08/25/2010 - 12:34 pm.

    Might it serve the public good if government were to offer businesses financial assistance so they can/will purchase land easily accessible to transit-traveling workers and shoppers?

  3. Submitted by Eric Ferguson on 08/25/2010 - 12:42 pm.

    Here’s a suggestion for a follow-up. Who makes the decisions on where workplaces will be located, and are the decision makers drivers or users of transit? I can’t help guessing that decisions to move to the periphery are made by people who live on the periphery and locate workplaces near themselves, even if far from employees. Also, it seems unreasonable to think the existence of light rail by itself will counter every other factor in location decisions. If it is a draw, we should compare the area along light rail or other transitways with development in the same areas before transit went in. It seems the Hiawatha line has more development now that before it opened, even if it hasn’t filled in all available space.

  4. Submitted by Dennis Tester on 08/25/2010 - 12:48 pm.

    Excellent piece. It proves that those who opposed the mass transit projects as unrealistic boondoggles were right all along.

    People will live where they want to live and their choices and priorities change as they get married, have kids, and store their bicycles in favor of minivans.

    And employers, private and public, and looking to reduce their bottom line which means lower rent or property taxes. Attracting good employees also means providing them with free parking and a panhandler-free commute.

    Like most things, urban planning works better on paper than it does in the real world.

  5. Submitted by Brian Simon on 08/25/2010 - 01:30 pm.

    “Might it serve the public good if government were to offer businesses financial assistance so they can/will purchase land easily accessible to transit-traveling workers and shoppers?”

    It might. It might also serve the public good to penalize car use, perhaps through a gas tax or parking lot tax, rather than to subsidize. Point being: there are multiple tools that can be used; the trick is in finding which one is best for any given situation. Given the tight budgets faced by governments at all levels, new spending programs should be viewed as less viable; which means we should incent good behavior by penalizing negative behavior.

  6. Submitted by Justin Bigelow on 08/25/2010 - 02:24 pm.

    Two Comments:

    #1 @ Dennis, I’m genuinely curious how this article proves mass transit is a boondoggle. This article gave a clear vision that new (rail) transit successfully attracted new riders and new housing but didn’t attract new business development in the downtown core. To read only one portion of that is to demonstrate your bias in favor or against.

    #2 How emblematic of the failure of the Met Council to unify and organize the metro area when Mark Vander Schaaf says there’s nothing to be done. Perhaps stop subsidizing new development on the periphery with dazzling car infrastructure for one (think highway creation and expansion a la 610), or strongly encourage local governments to restructure taxes to promote improvements on poorly used land in with transit access (street level parking lots in downtown or on university ave).

    The Met Council started to take some good action by changing the cost structure of storm sewers for local governments (as the system reaches capacity…) why no similarly strong action in favor of responsible land use that coincides with the will of the booming age groups (25-40 and 55-70).

  7. Submitted by Mike Hicks on 08/25/2010 - 05:07 pm.

    Some days, I wish Google Maps had a zoning layer.

    There are some amusing videos of Andres Duany, one of the leading figures in the New Urbanism movement, where he goes through presentations about the perils of suburban development and what can be accomplished by good planning. A big problem has been that city planners of the last half-century have divided everything up based on uses rather than allowing things to mix more naturally. For many people, they couldn’t live near work if they wanted to because their office is in an office park with no housing anywhere nearby. Similarly, you have to drive somewhere to get lunch because retail and restaurant businesses aren’t supposed to be in office parks.

    Planning is not an inherently bad thing, and having no planning is not a good thing. Some cities have grown a lot with little or no planning and zoning, and they’re equally messed up as suburbs that had a lot of planning going on. A lot of it has to do with the zoning ordinances that each city has. Some cities have pushed setback distances to be larger and larger over time. In my hometown, the setback distance has hardly changed in 50 years (aside from one “golf community” subdivision), but the houses built on newer lots have bigger garages pushed way up to the setback line, and the main part of the house gets pushed farther back from the road. With some houses, all you see from the street is the garage (plus maybe a small doorway).

    So one of the ideas to come out of the New Urbanism movement was to create new zoning and building codes that enforce what they see as “good” planning and architecture. For instance, when a new commercial building goes up, housing may be required either in the building as mixed-use development or nearby. To create a greater sense of place and community, houses are required to be built up to a line rather than back away from a line, and they may set a minimum density for an acre of land rather than a maximum density.

    With normal zoning, it’s also hard to up-zone a piece of land. There’s a lot of stuff that could be developed more densely just within Minneapolis and Saint Paul, but zoning prevents it. Once a city or neighborhood becomes boxed in by other cities or properties, the only way left to grow is upward, and we haven’t done that enough around here. It can be beneficial to have areas automatically graduate to a higher density zone after 20 or 30 years. And this doesn’t have to be destructive — imagine being able to convert a large home into a multi-unit apartment or start up a (legal) business in your home or garage. We should have more places that look and act like Grand Avenue in Saint Paul.

    One of the benefits of good density is that it can be arranged into nice nodes and corridors, reclaiming a lot of green space. It’s nice to have your own half-acre (at least until it’s time to mow), but wouldn’t you like to see your neighbor once in a while? If you give up most of that land and put it toward a larger space for the community, you can create a nice small town feel, yet with enough density to support a stop on a bus line or some neighborhood businesses.

  8. Submitted by Ray Schoch on 08/25/2010 - 05:19 pm.

    Good piece, Steve, at least as a starting point. I served for 6 years as a planning commissioner in Colorado, serving a pair of communities sequentially. My experience there was that “planning” mostly devolved to “development review,” with far less effort devoted to preparation for the future (a big part of my amateur’s definition of “planning”), and the preponderance devoted to making sure development proposals met existing standards and public approval.

    The mismatch between where people want to live and economic development is hardly limited to the Twin Cities, though the problems it creates may be worse here. At present, both Bernice (#2) and Eric (#3) seem on to something. The people who make the decisions often live on the periphery themselves, and even in the rare instances when that’s not the case, the business bottom line is almost never “What’s good for the community?” The bottom line is far more often “What’s good for US?” If land prices are 40 percent less on the fringe, and utilities can be made available, and local communities desperate for tax revenue are willing to sell their figurative daughters into figurative prostitution through tax rebates and assorted other accounting tricks, shareholders/investors won’t look kindly on a CEO who decides to stay in the city.

    Among the many questions that generates, if we want compact, efficient and enjoyable economic and residential development, is whether the carrot or the stick is the more effective tool. Some businesses respond well to bribes (a more accurate term for “incentives”), others think beyond their own quarterly earnings statement only when threatened with something serious, meaning penalties large enough to affect the next quarterly statement. I don’t have a dog in that fight. I’ve just observed that some lean one way, some the other.

    I purposely moved to a condo located near the first of several light rail lines the FasTracks project plans to build in metro Denver. Alas, my granddaughter is here, so I wasn’t able to stay long enough to take advantage of my own planning – the line won’t be operational until 2011. I did learn, however, that even as an old, single guy, I didn’t like condo living – all the disadvantages of an apartment, combined with all the disadvantages of home ownership, and lacking the advantages of even a small single-family home. Accordingly, when I moved to Minneapolis last year – this is the first time in my life I’ve actually lived inside a “big” city, and not in the suburbs – I ruled out condo living from the beginning. If I couldn’t find a house I could afford – a perpetual and still-unsolved problem in metro Denver – I was going to rent.

    Fortunately, I found a small, affordable house, but in a north side neighborhood that was zoned in the 1950s as if it were a suburb. There are 1,500 residential lots and only one – ONE – lot zoned “commercial.” Every resident has no choice but to drive to the nearest suburb to buy virtually any necessity, from food to clothing to gas for the car that has to be used more than it ought to.

    Dennis (#4) is both right and wrong. People WILL live where they want – if they can find a place they can afford. If they can’t – a social and economic problem for quite a few years – they live where they have to, and the decisions of those who provide the jobs become even more important. I would LOVE to be able to ride light rail downtown, as I did when I lived in suburban St. Louis. I’d be happy to ride a “rapid” bus with only a handful of stops, which is what I did every time I went to downtown Denver from my suburb 10 miles away. Here in NW Minneapolis, getting downtown via Metro Transit requires me to keep transferring from one bus to another, no matter what my destination. Getting to Target Field takes multiple buses, even if I start from the transit “hub” in Brooklyn Center. Accordingly, rather than drive downtown, when I finally think there’s a seat available at Target Field, I’ll drive to Fridley instead, and take the North Star commuter rail. Driving to Fridley to get on the train, however, doesn’t strike me as the most efficient means of getting to the stadium.

    And since I’m running out of space, it was my observation as a citizen planning commissioner in Colorado that failure to plan never emanated from the planning department. The best comprehensive, forward-thinking plan on the planet is worthless unless the relevant political and economic powers have the political will to see it through to completion. That almost never happens – quarterly statements and election campaigns work powerfully against the long-term view being implemented.

  9. Submitted by Victoria Wilson on 08/26/2010 - 04:49 pm.

    Instead of ‘planning’ maybe urban decision makers and thinkers are grappling with understanding of our collective economy. It is in the collective economy where we experience the expense of “traffic congestion and pollution as well as to the cost of roads and the commuting cost for employees.” Cost and benefits are the result of everyday consumer decisions. Consumers who allow the public good to factor into their decision making, value being closer to public transit; which in addition to satisfying their private needs also fulfills their belief that they contribute to a healthier environment.
    Since corporations appear to have no evidence of a correlation between quality employment candidates and their transportation choices, they place no value on proximity to public transit. If a correlation could be shown, the government as a provider of a collective economy service, should provide the information as a marketing function in our collective economy.

  10. Submitted by Matthew Steele on 09/21/2010 - 01:55 pm.

    Dennis, there’s no such thing as a free parking spot or a free speedy commute. You may not be paying, but someone is.

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