This year in urbanism: The five biggest Twin Cities planning stories of 2023

It’s December, budgets have been passed, and cities turn to introspection. Despite the 50-degree temperatures, it’s a good time to hole up with a cup of cocoa and look back at the year in Twin Cities urbanism. In case you missed them, these are the biggest stories that passed over my desk in 2023.

Ongoing housing crisis

For the umpteenth year in a row, this is the most important urban story all across the U.S. and Canada. Housing prices keep rising, and rents along with it, as an ongoing shortage of homes that has grown more acute in the last 15 years has led to a Darwinian housing market (i.e., survival of the richest).

What to do about it is another matter: Cities and counties all through the metro area have invested significant dollars in improved affordable housing funding — see this year’s $18 million investment from Minneapolis — and the state government approved almost $300 million in funding for affordable housing subsidies and preservation. Still, it’s not nearly enough.

Apart from perhaps gasoline (sigh), housing costs are the primary driver of people’s perceptions of inflation. This kind of emergency footing should shift city planning priorities — for example, minimizing the design regulations I wrote about in July or accelerating zoning reforms like the ones I wrote about in March. There are no easy state and local solutions for this widespread problem. At the very least, cities need to do more to boost housing construction; without that, any other programs are fundamentally kneecapped.

Environmental lawsuits and comp plans

On a related note, the yearslong legal saga over Minneapolis’ innovative 2040 Comprehensive Plan plan is a bad sign for both climate action and housing affordability. I wrote about this back in September when Judge Joseph Klein issued another injunction that put a stop to housing projects all across the city. As described in the Star Tribune, the reversion to the 2030 comprehensive plan jeopardized things like desperately needed housing for unsheltered people.

Environmental review challenges for comprehensive planning pose a big problem for housing and any other issues that cities might reasonably be tasked with solving. By applying the Minnesota Environmental Rights Act (MERA) to a comprehensive plan update — inherently a vague document — the litigants and the proceedings in Judge Klein’s courtroom have set a dangerous precedent for applying environmental review to broad-scale municipal zoning.

The worst-case scenario would be something like what California has seen with the misuse of its California Environmental Quality Act (CEQA) law, where an almost Alice in Wonderland irony has emerged of the best policies for climate action being halted in the name of environmental protection. The Minnesota Legislature needs to fix this before any other comp plans get tied up in similar frivolous litigation. Minneapolis, too, needs to get denser zoning back on the books as soon as possible.

Post-COVID offices and downtowns

The future of downtowns are probably the biggest unknown factor for cities, with huge ramifications for the future of municipal finance and urban life. Nobody really knows how shifting office work trends will impact the central business districts, where so much transportation infrastructure comes together. A lot depends on the habits and preferences of businesses and workers, and there’s no real way to predict exactly where those behavioral relationships will land.

It seems clear that change is sweeping through Twin Cities downtowns and also, as I wrote about in April, suburban office parks. One big impact will be a reduction in the commercial tax base, and in a way that will be unevenly distributed. In some ways, downtown Minneapolis might be more resilient to disruption than the rest of the region’s commercial real estate market, but with such high valuations, they also have much farther to fall.

Meanwhile, the ongoing labor shortage hasn’t made it easier to ask workers to “come back” to the office. For example, the vast majority of St. Paul government desk jobs are still fully remote, leaving City Hall a ghost town. If city staff are missing in action, it doesn’t bode well for St. Paul’s downtown economy. Incentivizing housing conversions, as I wrote about in August, or improving downtown public space seem critically important.

Adjusting the freeway / transit balance

This year was a banner moment for legislative policy, with one-party control and a massive budget surplus that removed normal constraints on government ambition. Behind the scenes, too, the DFL “trifecta” allowed a long-postponed shift in transportation policies. Since then, we’re getting a sense of how all this new money might play out. So far, it’s not nearly as simple as I’d imagined.

For example, thanks to the complexity of developing a new bidding process, it’s going to take years for the portion of the metro-area sales tax dedicated to biking infrastructure to actually affect city and county budgets. Transit funding, too, is not as straightforward. The new money shifts responsibility for operations away from counties and into the Metro Transit budget, which impacts differently across the region.

Yet new dedicated revenue puts Metro Transit in a different spot than many of its peer agencies around the country, who are facing a “fiscal cliff” with the disappearance of federal relief money. Most U.S. cities will likely have to make harmful cuts to service; the biggest barrier for Metro Transit, on the other hand, will remain staffing and attracting post-COVID ridership.

Meanwhile, the Legislature’s new carbon emission reduction policy for freeway expansion should eventually nudge our roadway improvements toward reducing carbon pollution, although right now it seems like it will take years to return dividends. MnDOT has been quietly expanding freeways around the region, for example, adding a lane to Interstate Hwy. 494 through Richfield and Edina through an accumulation of “auxiliary improvements.” The agency’s “Corridors of Commerce” fund allows the Legislature to bypass usual process and earmark highways like I-94 near Monticello for expansion. Even when freeway removal is put on the table, it’s really hard to put an end to business as usual after a century of freeway consistent construction.

Met Council governance

Finally, there’s a potential transformation to regional planning, long a relative strength for the Twin Cities over the country’s mass of disorganized metros. The state’s Metropolitan Governance Task Force has been meeting since the summer to decide whether or not, or how, to change the way the Metropolitan Council functions.

The committee is strange because some of the members would like to see the Met Council weakened, while others would like to see it given a stronger ability to set policy around transportation and land use in the Twin Cities. While this makes for odd debates and reflects state politics, the regional consensus is likely to be different in an increasingly Democratically aligned metro area.

In conversations with both Met Council members and staff over the years, I’ve seen a lot of frustration on both sides, and something should change. Many options seem to be on the table, including breaking off Metro Transit governance from other council duties and/or shifting to an elected level of government. The current system isn’t broken so much as in the doldrums, but it will be critical for the task force to get this right because the Met Council is a potential huge asset to the Twin Cities.

There’s a public listening session with the Metropolitan Governance Task Force at 2 p.m. today, Friday, Dec. 8, at St. Paul’s Wilder Foundation headquarters, plus more next week. The task will be presenting some of their work, hosting panel discussions, and giving community members a chance to weigh in.