Tracking the Green Line: Will urban renewal by transit turn into poor-people removal?

Courtesy of Metro Transit
In cities across the nation, new transit lines see developers bidding up the cost of land, even before the train starts operating.

As you’ve no doubt heard, unless you’ve been on an extended visit to Planet Beta Zeta V, the Green Line — aka, the Central Corridor LRT — will have its grand opening June 14. The train will provide a connection between the Twin Cities’ two downtowns — though how efficient that connection will be is still an open question. Test runs have clocked the trip at a full hour.

In response to questions about that, Susan Haigh, chair of the Metropolitan Council, which is in charge of the line’s construction and operation, asserted Wednesday that Metro Transit is still working on syncing up signals. Anyway, “Not everybody will ride it end-to-end,” added Haigh at a press conference to draw attention to the $2.5 billion in new residential and commercial construction that has occurred within a half mile of the LRT

But the new line brings with it a concern more significant than the speed of travel. In cities across the nation, new transit lines see developers bidding up the cost of land, even before the train starts operating. That’s already occurred along the Green Line. Some land that cost about $8 a square foot 10 or 15 years ago now sells for $35 a square foot. Higher property values lead, of course, to higher rents, generally pushing out people with low or modest incomes.

The proof? A 2010 report by the Dukakis Center for Urban and Regional Policy at Northeastern University studied change in 42 neighborhoods served by new train lines in 12 cities. The results: between 1990 and 2000, rents increased more quickly in 62 percent of the new transit zones than in the surrounding metropolitan areas, and so did the incomes of the inhabitants. Urban renewal by transit worked out, in many cases, to be poor-people removal.

Well aware of this concern, the Big Picture Project, a consortium of some 43 representatives of community groups, government agencies, foundations, funders, nonprofits and consultants, got together two years ago to assemble a “Central Corridor Affordable Housing Coordinated Plan.” (One is the Central Corridor Funders Collaborative, which supports Cityscape.) Its overarching aim: to prevent displacement of low-income people by building and preserving low-income housing.

The entire corridor, of course, is not a low-income neighborhood. The 11-mile-long LRT line passes through six different areas. At one end is downtown Minneapolis, which includes both fancy-pants condos and the giant (low-income) Cedar-Riverside housing development. From there, the train proceeds to the University neighborhood, then through a kind of industrial area now referred to as Midway West, to the modestly gentrifying Hamline area (Midway Central), Frogtown (Midway East), hard-hit by foreclosures, and then to the Capitol and downtown St. Paul.

The Big Picture, with the help of Wilder Research, periodically tracks “change indicators” to measure progress. Out this week, the current report offers a big but also mixed picture. Yes, the feared influx of so-called market-rate housing is occurring. For every new subsidized unit added along the corridor from 2011 to 2013, there have been 12 new market-rate units. But the rising buildings are not yet displacing the poor.

70 housing developments

The Big Picture’s numbers tally somewhat with a spreadsheet provided by the Met Council (which has a more open-ended timeline of 2006 to 2016) listing some 70 housing developments along the Green Line that are either completed, underway or merely under discussion. Totaling about 12,000 housing units, some 46 percent will be market rate, 21 percent student housing, and 13 percent divided among senior (some affordable, some not), homeless and youth housing and housing whose type is as yet unknown. Only 21 percent or 2,440 units will be affordable, and 1,800 of them are in the Cedar-Riverside behemoths that were recently renovated. If you subtract them out, then, the portion is only about one in 20.

Central Corridor median rent

Source: Twin Cities LISC

Rents have also risen along the corridor. The median rent for a two-bedroom apartment leapt to $1,400 in the third quarter of 2013, up from $1,225 during the same period in 2011. But, as the Big Picture report notes, the rent increase in the area likely reflects the increase in apartments located in downtown Minneapolis and new student housing located near the University. In point of fact, it went on to say, “the changes do not appear to be pushing out lower income households.”

Eric Muschler, program officer for the McKnight Foundation, one of the constituent members of the Big Picture, was cautiously optimistic. “The signs so far are really positive,” he says.

In fact, if you pinpoint the new and pending developments on a map of the Green Line, you’d find most of the market-rate housing bunched where market-rate housing already exists: in Minneapolis’ North Loop and Downtown East neighborhoods and in downtown St. Paul. Affordable units are concentrated in Frogtown and along University Avenue. Environs around the U of M will be receiving large clumps of — duh — student housing.  

Source: Twin Cities LISC
Most of the market-rate housing along the Central Corridor is bunched where market-rate housing already exists.

So you could say that the existing character of the neighborhood — or the existing characters of the six neighborhoods involved — is staying pretty much the same. Unless there’s a huge sudden surge of the well-to-do moving in from Edina and Minnetonka, it’s unlikely that Frogtown or Cedar-Riverside will gentrify.

“You can’t force market-rate housing where market rates can’t support it,” says Russ Stark, St. Paul City Council member and chair of the Big Picture steering committee.

Adverse effect

The bunching of poor people in already poor neighborhoods, however, does have an adverse effect: It keeps them in highly segregated schools, which by their nature, are inferior. Stark and the other folks behind the Big Picture, however, are hoping for and encouraging developments with a mix of the have-somes and have-not-so-muches. As an example, Muschler pointed to the 250-unit Boeser project in Prospect Park, proposed by The Cornerstone Group. It is slated for an 80-20 percent combo of market-rate and subsidized units.

Efforts to keep poorer families in their homes have not surged, either. Only in one area — mortgage foreclosure assistance — has the project already exceeded its 2020 goal of 303. But the project has granted just 51 home-improvement loans — though its goal is 598. There have been 25 vacant properties redeveloped (the goal is 150) and 98 first mortgages, in contrast to a goal of 402.  Of course, there are five-and-a-half more years for this project to run. “We’re on a good track,” says Stark. “But we need to get more resources in home improvement.”

The Green Line, however, has potential benefits for low-income people that could offset possible hikes in their rent. Higher housing values around transit do generally result in denser development. The Met Council’s spreadsheet shows 50 different renovation and construction projects. Some are in the two downtowns, but out in the nabes there are plans for breweries, restaurants, office buildings and retail — all of them bringing jobs. And with more housing will come more opportunities.

Source: Twin Cities LISC
Poorer households may be less burdened by their rents if the Green Line allows them to cut their transportation costs.

Poorer households may be less burdened by their rents if the Green Line allows them to cut their transportation costs. The annual rush-hour fare on the LRT is $540. Owning and operating a small- or medium-size car runs nearly $9,000 a year.

But that could be a big if. While the Green Line may attract new residents who will commute to high-paying jobs in the two downtowns, current residents who moved in before the line was built may still have to travel by car to less accessible areas of the metro. In that case, rising rents will push them out.

Comments (5)

  1. Submitted by David Markle on 05/16/2014 - 11:24 am.

    Comparisons

    I haven’t seen the Dukakis report, but comparing the Green Line with other transit lines may be difficult or misleading. For one thing, the Green Line represents poor new transit in a route that for now, still has frequent bus service. For another, the examples previously cited by local planners and the Met Council, new lines in cities such as Portland, Oregon, tend to be comparisons with successful transit such as LRT lines that fulfill their function as trains, or modern streetcar lines that provide good local service. We have an instructive local comparison, between the Blue Line that’s quite successful as transit, and the Green Line which has been put forward as a development tool, not as transit.

  2. Submitted by Charlie Quimby on 05/16/2014 - 11:49 am.

    Other factors to consider are changing housing mix and density.

    I lived in three different buildings in the Loring Park neighborhood in the early 1970s when gentrification was just beginning there. All three are still standing, as are the neighboring buildings of the same vintage, and they appear to have escaped major gentrification. While rents have certainly gone up, not all properties were affected in the same way or rose at the same rate. The biggest change was the influx of new buildings and major renovations and condo conversions.

    (We moved when our insanely low rent rose to a point that equalled the payment on a starter home. With the single-family market in the Central Corridor not improving relative to rents, that could happen there, too.)

    It’s not necessarily bad if the line stimulates developers to build new market rate units on vacant or underutilized land. That $8/sf property was perhaps priced that low because no one wanted it—except perhaps to sit on in hope of an eventual upturn.

    New market rate units raise the median and average rents without necessarily eliminating lower rent units or pricing them unaffordably. It may just be a matter of demand and supply being in flux for awhile.

    Also, as more people move in, more businesses become viable where they weren’t before. Poorer residents may have shorter grocery runs and better choices, for example.

    It’s possible pockets of decent, affordable housing will remain in a generally improved neighborhood, but the Big Picture Project is wise not to leave it totally in the hands of market forces.

  3. Submitted by Ray Schoch on 05/16/2014 - 01:28 pm.

    I’m inclined

    …toward Mr. Quimby’s analysis, though, if travel between the two downtowns takes more than an hour, my first question is: “Why?” It has distressing similarities to Metro Transit bus service in my area. The mile-and-a-half from my house to one of the few relatively upscale restaurants in the area by bus requires that I walk half a mile, then endure a bus ride of 20 minutes and 6 stops. That’s 20 minutes and 6 stops in one mile. If the weather’s decent, I’d rather walk.

    Denver’s LRT line from the airport to downtown has yet to be built – keeping in mind that Denver’s airport is usually referred to by locals, only half-joking, as being “halfway to Kansas” because it’s about 20 miles northeast of downtown – but Denver’s West line from Golden to downtown is up and running, and it’s 14 miles from the Jefferson County Courthouse in suburban Golden to Denver’s Union Station downtown, with 6 stops. The trip takes about 50 minutes according to Google, but it’s more typically 45 minutes when I’ve ridden it.

    The MetroLink LRT in St. Louis has about 15 miles to travel between the airport and downtown. With 9 stops, it takes about 40 minutes for the trip. On really busy occasions (a Cardinal home game), it sometimes takes 5 minutes longer.

    Official final results may differ, but based on Google, it’s about 14 miles between the Twin Cities downtowns, and there are 14 stops between Target Field and the St. Paul Depot/Terminal. Google says 49 minutes, but if test runs are over an hour, real-world time is probably somewhere in between those two extremes. If it’s speed you’re after, taking LRT is apparently not the way to go, at least not here in the Twin Cities. In both Denver and St. Louis, I’ve found LRT to be significantly faster than either automobile or bus during morning or evening rush hour, but never having tried to commute between downtown St. Paul and downtown Minneapolis, I can’t make a similar comparison here.

    The issue raised by Ms. Harris, however, is the more important one, and it’s VERY difficult to prevent. I hope efforts to at least maintain the existing supply of moderate-income housing are successful, and increasing that housing stock beyond simple maintenance would be even better. Otherwise, and especially if left to developers, whose bottom line is financial, not housing equity, LRT here will simply be another amenity for the well-to-do, paid for by the considerably less well-to-do. In other words, it would be uncomfortably similar to a new football stadium, being paid for in large part by people who will never attend a game.

    The transportation cost figures quoted in the article, if accurate, might go a long way toward ameliorating the social and economic costs of gentrification on existing residents of modest means, at least in the housing arena. One difference, of course, is that your car typically nickel-and-dimes you to death with accumulating maintenance and operating expenses. Housing hits you with that big bill for rent or the mortgage payment all at once.

  4. Submitted by David Markle on 05/16/2014 - 03:51 pm.

    Speed and distance

    The Green Line route is only 11 miles long.

    The Blue Line travels much faster, except in downtown Minneapolis where it should have been tunneled.

  5. Submitted by Scott Herron on 05/19/2014 - 11:50 am.

    The changing face of DT St. Paul

    This is completely anecdotal, but I have noticed a great change in the downtown St. Paul area in the last 5 years as a number of properties have come under control of Bigos and REE. At Kellogg Square, there was an across the board increase of 30% on all apartments in 2013, as well as other additional costs and fees. This dislocated a large number of elderly on fixed incomes. Many of these families had been in the building for 20+ years.

    A number of the people I ‘grew up’ with in Lowertown over the last 10 years have also relocated to other neighborhoods or cities in the last 12 months as rental prices have shot up. Mostly these are people in their early 30’s whose rents have moved past their comfort level. None of them were really looking to leave the neighborhood otherwise.

    As for who has taken up these vacancies, I’ve noticed three contingencies – empty nesters, young professionals, and foreign nationals.

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