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Urban innovation: Three ideas for Twin Cities, suburbs to consider

MinnPost file photo by Raoul Benavides
A mandated commuter tax benefit: To promote the use of public transit, to decrease congestion, to decrease employers' payroll taxes and to provide commuters with tax savings.

In New York City, just as in Minneapolis, the mayoral candidates are off and running. Both cities have flourished under the leadership of highly respected mayors. In the Big Apple, Michael Bloomberg, who came to office in 2002, brought a series of innovations to his city: an initiative to create micro-housing for single people; a competition to recruit a new applied-sciences campus; a first-in-the-nation Office of Financial Empowerment; and an unsuccessful and over-reaching bid to ban sugary drinks over 16 ounces.

Here in the Mini-apple, some bold new programs have come to life under R.T. Rybak, who also became mayor in 2002: the launch of the 311 phone system, which allows citizens to reach more than a dozen city departments by dialing one number; the Downtown 100, a crime-cutting strategy for the central business district; and creation of Offices of Sustainability and Culture and the Arts, ensuring that the activities of other government agencies are informed by those two considerations.

To make sure that New York City continues on its trajectory of innovation, the Center for an Urban Future and NYU Wagner, a public service graduate school, created a Mayoral City Policy Lab. It sifted through hundreds of new policy ideas from mayors and city officials around the world, foundations, philanthropists, institutes, corporations, labor unions and advocacy groups.

Ultimately, that list was winnowed down to 15 ideas that seemed suitable to New York. But the group’s report went on to point out that “New York is not the only city that can benefit from this inventory of innovation. Los Angeles and Minneapolis will [also] be electing new mayors.” The hope seemed to be that the ideas would inspire those and other cities to try new stuff.

Here are a few programs from among the 15 that might be worthwhile for Minneapolis, St. Paul and their suburbs to consider:

Kindergarten-to-college savings

The purpose: To “seed” savings for college by all public school students to help them finance a four-year degree, which has been priced out of the reach of low- and middle-income families.

Under way in: San Francisco.

How it works: The city provides each kindergartner with a kickstart deposit of $50 for a college savings account; low-income students (those who qualify for free and reduced lunches) get an extra $50. The San Francisco Foundation and other nonprofits have raised a pool of money to match family deposits dollar-for-dollar up to $100 a year. And families who agree to deposit $10 a month for six months earn an extra $100. Introducing “unbanked” poor families to mainstream financial institutions may, the program’s backers hope, provide a collateral benefit. Withdrawals, by the way, may be used only for legitimate higher education expenses:  tuition, books, fees and so on.

What it might do for the Twin Cities: Income inequality has grown in our state, according to the Minnesota Budget Project, an initiative of the Minnesota Council of Nonprofits. Greater access to higher education could help to narrow that gap at a time when a four-year degree has become a standard requirement for a decent job. I don’t kid myself that $100 in starter funds and $10 a week will provide enough for a four-year degree, but the leg up can tilt families in the right direction.

Accessory dwelling units and basement conversions

Purpose: To allow smaller homes and apartments to be built in back yards, above garages and in basements to expand the availability of affordable housing and accommodate seniors, students and single people in residential neighborhoods. Zoning codes in most localities prohibit such ADUs or accessory dwelling units, and many that already exist illegally do not meet local safety requirements.

Under way in: Seattle, Vancouver and Santa Cruz, Calif.

How it works: In Seattle, as an example, owners of one- and two-family houses are permitted to build a “self-contained residential structure” on their lots if it doesn’t exceed 800 square feet. To ease its housing shortage, Vancouver changed its zoning code to allow ADUs of at most 500 square feet as well as conversions of basements to apartments. In addition to allowing the dwellings, Santa Cruz also offers homeowners advice and loans help to bring illegal units up to code.

What it might do for the Twin Cities: According to the State Demographic Center, the number of Minnesotans over age 65 will grow by almost 47 percent or nearly 320,000 between 2010 and 2020, and between 2020 and 2040, it will increase by about 122 percent or 850,00 people. Finding affordable housing for these folks that also provides them some kind of social and tactical support (transportation, help and so on) won’t be easy. With ADUs, both city and suburban homeowners would be able to offer their elderly parents a way to “age in place,” instead of moving to senior housing or assisted living. Similarly, downsizing families could save thousands a month by moving to a backyard cottage and renting out the larger house. ADUs might also accommodate the increasing number of immigrant families, who sometimes prefer to keep their housing inter-generational.

A mandated commuter tax benefit

The purpose: To promote the use of public transit, to decrease congestion, to decrease employers’ payroll taxes and to provide commuters with tax savings.

Under way in: San Francisco.

How it works: The federal government has for years allowed businesses to offer employees the option of saving on transit by setting aside pre-tax dollars (currently up to $245 a month) to pay for subway, bus and commuter rail travel.

In 2009, however, San Francisco passed an ordinance requiring businesses with 20 or more employees to offer tax-free benefits. Depending on their tax bracket, commuters can save up to 40 percent of the cost of their fares.

What it might do for the Twin Cities: For starters, in this time of rising gas prices, such a mandate would likely nudge more people out of their cars and onto trains and buses. Fewer people in cars translates to a drop in greenhouse gas emissions and less traffic. As important, local businesses save on payroll taxes because employees are deducting income on a pre-tax basis. Better yet, those tax savings stay here in the local economy instead of being sent to Washington.

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Comments (13)

  1. Submitted by jody rooney on 06/25/2013 - 11:00 am.

    Well I give the ideas two thumbs up and one thumbs down

    Granny flats – small dwellings 800 square feet or less- are one of my favorite ideas. There may be some need to have a minimum size lot or undeveloped portion of a lot for it to apply because some of the city lots are pretty tiny but it is a great thought.

    Kindergarten to college savings. Good idea.

    The thumbs down is for business subsidized transportation. Business should not have a role in promoting wise transportation choices. Nor should it have a role in providing health care. Let’s keep the distinction between public and private goods clearer.

    • Submitted by Jim Young on 06/25/2013 - 03:57 pm.

      It’s not “business subsidized transportation” exactly

      Businesses don’t “subsidize” the employee commuter benefit, the government does by foregoing taxes on that income. The only subsidy from the business entity is the added administrative costs associated with one more employee benefit program.

      Also the statement that “Business should not have a role in promoting wise transportation choices.” totally ignores the profound effects businesses have on transportation choices for both their employees and, if they’re a bricks & mortar retail business, their customers. If your business location has acres of “free” parking and no access to public transportation or non-motorized transportation, you’re requiring your employees/customers to get there by car. If that’s not “promoting a transportation choice”, I don’t know what is.

      • Submitted by Todd Hintz on 06/25/2013 - 04:44 pm.

        Public Transportation

        While not a business subsidy of transportation per se, a lot of companies in downtown Minneapolis and the southwestern suburbs are clamoring for the extension of the green line LRT to be built. They want to add a lot of employees, but even in the ‘burbs they’re having a hard time finding enough parking for people should all those new employees decide to drive to work. Rails would give them more options to work with, taking some of the pressure off of existing infrastructure.

    • Submitted by Frank Phelan on 06/25/2013 - 04:48 pm.

      Sauce For The Goose

      The tax codes provides benefits for businesses that give their businesses free parking. How is this any different?

  2. Submitted by Todd Hintz on 06/25/2013 - 11:20 am.

    Nice Article

    These are all good and sensible suggestions. Hopefully we can get some or all of them implemented, although I’m not holding my breath considering we couldn’t even get a dedicated transit tax passed this session.

  3. Submitted by Monica Millsap on 06/25/2013 - 12:28 pm.

    Marlys, I love all three ideas! And Jody, I don’t see why businesses wouldn’t want to help support a mass transit option. Yes, the Twin Cities has a public transit system. A “public” service is exactly that…paid for by the people. With the support of businesses (and one would hope that a business wants to invest in its community), we would have more money to invest and likely would have better transit. At least one would think that Metro Transit would increase the frequency and numbers of their buses/trains in order to service those businesses that were providing the discounts to employees. In addition, with the perk of a metro pass, transit use might become habit forming for events outside of work as well.

  4. Submitted by Steve Peterson on 06/25/2013 - 01:10 pm.

    ADUs permitted in Bloomington since ’06

  5. Submitted by Steve Elkins on 06/25/2013 - 01:21 pm.

    Granny Flats

    Bloomington has a zoning ordinance allowing Granny Flats.

  6. Submitted by jody rooney on 06/25/2013 - 04:11 pm.

    Because Ms. Millsap the business of business is business

    Because when businesses are required to contribute (as in the case of San Francisco) more than they are willing to contribute (Federal Tax Break) they feel they have more of a stake in policy and politics. And if money talks in politics and it certainly does they are more than willing to use their influence to give us some of the policies that have been pursing like unbalanced budgets.

    Just like church and state, business and state should also be separated. Businesses already think that governments should be run like businesses and while some efficiencies have merit several don’t.

    Then you get to the question if businesses are going to directly subsidize things that benefit groups of people is transit really the best option you can come up with? Sheltering the homeless comes to mind as a first.

    Incentives generally works better than cohesion or requirements for motivating businesses actually almost anyone to do the right thing.

    • Submitted by Monica Millsap on 06/25/2013 - 07:26 pm.

      I hear what you’re saying. A mandate like Obamacare really does nothing to make insurance more affordable or even more accessible to people who do not have full time jobs, though infrastructure is different than healthcare.

      Take investing in homeless shelters, as you would have businesses do. My thoughts are that convenient and affordable transportation options might be the incentive to help someone maintain stable employment. That may be the thing that helps someone move into a place of their own and out of a homeless shelter. So, from an economic perspective, investing in transportation and infrastructure may help the person in the homeless shelter (and the community) far more than building more homeless shelters or making donations to homeless shelters.

      How to encourage investment verses mandating investment from the businesses is tricky, though. It may never make sense to have usable mass transit in this city as our land is so much cheaper than San Francisco’s.

  7. Submitted by Jon Kingstad on 06/26/2013 - 08:45 am.

    Three good suggestions

    that really illustrate how much impact local government policies have. Zoning has many benefits but there are many negative side effects which need to be corrected. Zoning has contributed to the imbalance of rental units available for example.

    I’m afraid I don’t understand the objection to requiring business to, in effect, balance their practices which have negative community impacts. We have traffic jams on so-called expressways at certain times of the day because business in general defines the work day so people have to get to their downtown jobs at a certain hour and then leave at a certain hour. We have downtown parking ramps that reserved for employees and executives of downtown businesses. That such parking has been provided free to the employees/executives in many cases as a “perk” is a well known fact. These parking ramps have been built in fact to accommodate the office spaces built in these areas. Yes, it’s a problem when business influence over government and government policies becomes excessive. But that should not prevent us from demanding wise government policies that correct business behavior where it is needed.

    • Submitted by Monica Millsap on 06/26/2013 - 01:05 pm.

      My reason for wanting to see more business investment in mass transit is because I believe it will make our city’s transit system usable (convenient and efficient).

      But, Jody is correct that there needs to be an incentive for businesses to actually support it. Even if the support is mandated, if there is no incentive or good reason for the mandate, then businesses could possibly move away.

      Businesses have had control over government for decades and we will likely never break that partnership. Businesses love to legislate other businesses through the government. They lobby and they help write some legislation. For example, our own Green Line was approved to be built not because Gov Pawlenty thought it was good environmentally. It was built because of the lobby power of developers, construction companies, and the St Paul Chamber of Commerce, who all saw money opportunities that would actually legislate some action (for better or worse) that affects current tenants and property owners along the Green Line.

      It is through the power of business that we have adequate parking and maintained city streets. Without efficient roads, goods could not be delivered as cheaply and conveniently. Without adequate parking and good roads, business would not be able to attract competent employees and paying customers.

      In the Twin Cities, few people of the metro population actually use the public transit service, but our city streets are used by everyone (transit users use the streets – buses could not run efficiently without them). I choose to take the bus, but I don’t know anyone else in my profession in the several places that I’ve worked around here that use the bus. Most of my co-workers like to offer me rides home because they seem to think taking the bus is unfortunate. Many bus passengers converse with me and others as we wait for the bus and say, “If only I had a car, I wouldn’t have to take this bus.”

      If that is the attitude of the people living in the Twin Cities, then there really is no incentive for businesses to support mass transit. It would not even be a wise investment for the business, because lack of efficiency just makes us poorer as a society.

      In San Francisco, transit runs efficiently and it is widely used by people living in the city. Even Golden Gate Park is accessible conveniently and quickly in several areas by transit. The BART and the Muni transport people to real places rather than just provide a bare bones basic service.

      I still stand by my original comment that I love all three of these ideas and I think in this case, if businesses were mandated to support public transit and then they actually had a hand in legislating transit, we might be better off because the businesses ideally would demand service that the employees would choose to use. But, I will agree with Jody that if there actually continues to be no incentive to support usable transit and employees won’t ride transit no matter what benefit is offered, then a mandate does not make sense. It only makes things worse for the city as a whole.

  8. Submitted by Cory Olson on 06/28/2013 - 10:24 am.

    College Costs

    I like the idea of a college savings plan, but $200-$300/yr. isn’t going to get it done. Using the U’s own projected costs and assuming a 6% growth rate (a little conservative historically), a kindergartener today can expect to pay just over $52k/yr. to attend. And that’s for in-state students. $300/yr. with a 9% return would get you a total of about $7k. That’ll maybe carry you through the first six weeks of college. It might buy you a weekend at a private school.

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