Three Cheers for Minneapolis (The 3 is for Triplex)

Minneapolis just took a huge step toward becoming a stronger city by passing an ambitious new housing reform. What particularly excites us is that Minneapolis has just become the first major U.S. city to move toward what Strong Towns has been urging cities to do about their housing policy for years: allowing every neighborhood to evolve gradually to the next increment of development.

Duplexes and triplexes will now be allowed in every neighborhood citywide, most of which were formerly reserved for nothing but single-family houses.

Streets with frequent public transit service will also allow greater building height and intensity, up to 4 stories in many locations and 6 stories closer to the city center. This will allow those areas, too, to grow to the next increment of intensity, and to make more productive use of transit investments by making it possible for more people to live in walking distance of transit.

This change is part of the city's required, once-a-decade update to its comprehensive plan, an overarching blueprint for policy priorities that, over the coming year or two, will make their way into finer-grained things like city ordinances and the zoning code. The new comprehensive plan, Minneapolis 2040, passed the city council on Friday, December 7th by a 12-1 vote.

The 2040 plan does a lot of things, but the residential zoning reforms have drawn the most local and national attention. You can read some of those national takes here:

The big takeaway we have to add is that Minneapolis's plan, if it works, will distribute both the benefits and the costs of growth and neighborhood change across the city in a way that is pretty unprecedented in the U.S. in the last half century.

A key Strong Towns tenet on neighborhood growth and change can be summed up in the following pair of statements—the first of which requires the second:

1. No neighborhood should experience radical change.

2. No neighborhood should be exempt from change.

Minneapolis is now the closest of any major U.S. city to turning that pair of principles into actual policy.

Why is This Approach Needed?

Minneapolis has a housing affordability problem. It's not the kind of problem faced by the most expensive coastal cities, where even well-to-do professionals double up with roommates to make ends meet. Compared to these places, homes in the Twin Cities remain relatively inexpensive. But not for everyone.

Source: CURA. Click to view larger.

The Center for Urban and Regional Affairs (CURA), a think-tank affiliated with the University of Minnesota, has documented the loss of affordability, or what it calls the "shrinking city." CURA researchers examined the ability of a typical Minneapolis renter to afford the median rental unit in each of the city's neighborhoods in 2000 versus in 2014. The resulting maps illustrate dramatic decreases in the number of neighborhoods where that is the case, particularly for non-white residents. (Minneapolis faces some of the worst disparities in the nation between white and non-white residents in access to housing and economic opportunity.)

The primary reason: rents have increased, while incomes have stagnated. Now, if you're an average renter in Minneapolis, the city—that is, the portion of it you can reasonably expect to find and afford a home in—has been slowly shrinking before your eyes.

Minneapolis—while growing at its fastest rate since 1950—hasn't experienced the explosive growth of a Seattle or a Denver or an Austin. But it has a housing policy debate that in many ways mirrors the ones in those cities. Amid increased interest in city living, the city hasn't added housing at a rate necessary to keep prices in check. 

The rental vacancy rate at the end of 2017 stood at 2.2 percent; since 2010, Minneapolis has added 83,000 households but only 64,000 homes. A healthy vacancy rate would be in the neighborhood of 5% or more; when vacancy is low, tenants face more competition for homes, and landlords can raise rents. (A graph of Twin Cities rents versus vacancy rates from 1996 to present shows clearly the inverse relationship between vacancy and the year-over-year increase in rents.)

Amid rising rents, low vacancy, and some high-profile losses of affordable apartment complexes (the sale of a single large one in 2014 in the inner-ring suburb of Richfield was enough to cancel out nearly a year's worth of new affordable housing production in the entire metro area), the city recognized the need for a release valve when it began work on its comprehensive plan update.

To the concern about housing can be added concern about climate change, another reason the 2040 plan cites to "establish a pattern of development and a transportation network that prioritizes pedestrians, bicyclers and transit users"—which means more complete neighborhoods and homes near transit. 

Trickle or Fire Hose Growth 

Minneapolis’s North Loop at night. (Source: Wikimedia Commons)

The dominant pattern of development in the Twin Cities in recent decades has been trickle or fire hose growth: concentrating the impacts of new development into a small handful of neighborhoods, while a greater number of neighborhoods see little or no change. In Minneapolis, the total dollar value of building permits from 2009 to 2016 in the booming North Loop (population 5,000, median household income $105,000) was more than three times that in all of North Minneapolis, the city's poorest quadrant (population 65,000, median household income $40,000).

Apartment construction in particular has been clustered in a few "hot" neighborhoods near downtown and/or along light rail lines. But the construction of single-family homes within city limits is also intensely concentrated, in this case in the city's affluent southwestern corner. These are overwhelmingly cases where existing homes were demolished to make way for very large, expensive ones—with no net change in the amount of housing in the city. This was by design: for decades, the zoning on those Southwest Minneapolis streets has not allowed for anything but a single-family home to be constructed, dramatically limiting the ability of new residents to move to what prices make clear are the city's most desirable neighborhoods.

Historic small-scale rental housing in Minneapolis’s Whittier neighborhood. This type of development was made illegal in many areas in the late 20th century, and would be allowed again under the 2040 plan. (Image: Wikimedia Commons)

Single-family zoning is actually a historical anomaly: much of it dates to the 1970s. Supporters of the 2040 plan's housing provisions pointed out that many "single-family" neighborhoods in Minneapolis already contain duplexes, triplexes, and fourplexes, and even small apartment buildings scattered throughout. These houses are "grandfathered in"—illegal to build today, but legacies of a time when neighborhoods were allowed to evolve and fill in incrementally even as the city also expanded its borders.

This is the traditional development pattern—incrementally up, incrementally out, and incrementally more intense. And it is a tried and true recipe for building real, sustainable wealth in a place over time.

The 2040 plan is a huge step toward a return to that recipe.

The Choice: Concentrate Change or Distribute its Impacts

Political pressures, mandates from the regional Metropolitan Council, and the stated priorities of Minneapolis's mayor and most city council members meant that improving housing affordability and accommodating growth were going to be priorities of the 2040 plan. But there were multiple ways that priority could have been expressed.

The city could have gone with the orderly but dumb approach of even further concentrating new development in a minority of neighborhoods, by offering dramatic upzones [increasing the building height and/or density of housing allowed] in relatively few areas as a way of trying to meet density and housing production goals. This would have been the path of least resistance in many ways. If you promise homeowners in wealthy neighborhoods that you won't mess with anything on their streets, you don't get an insurgency of apocalyptic yard signs. If you don't rock the boat in North Minneapolis, whose residents are sensitive to the question of gentrification and who will benefit from change, you probably don't help a whole lot, but you don't upset the status quo a whole lot either. 

Large, established developers would have liked it just fine. These are companies that know how to work the system and are happy to build large projects—100, 200, 300 apartments—in locations making the rapid jump to a much greater development intensity. Indeed, at least one prominent Twin Cities developer dismissed the triplex proposal as "silly"—i.e. not anything that would turn him a profit. It's much smaller-scale developers that tackle projects like triplexes in neighborhood interiors. 

Big developers would rather stick to the handful of hot neighborhoods. When an entire city's worth of demand for new homes is concentrated in a few locations, the resulting rapid transformation of those locations allows the biggest development players to squeeze would-be small developers out of the market by outbidding them for land (and driving up land prices, as long-time owners seek a windfall).

Meanwhile, the rest of the city would continue to be more and more off-limits to many current and aspiring residents. 

The Answer: Spreading Out the Benefits and the Discomfort

The blanket-upzone approach—allow a little bit of change everywhere instead of a lot of change in a few spots—is different. Instead of orderly but dumb, it's chaotic but smart.

It's far less likely to create speculative windfall gains for a few well-connected land owners, because this approach doesn't pick winners. Instead, it mitigates the tendency toward "hot" neighborhoods absorbing all of the new development, and lets a more organic form of feedback show us where people are eager to live. And it can benefit the whole city in different ways: 

In the wealthiest neighborhoods, parts of town where million-dollar home price tags are a clear indicator of huge demand, people have already been willing to pay a lot to tear down an old house and build a big house. It's not unreasonable to think some triplexes will now be built instead. More people will get to live in these neighborhoods. And the added population will support transit service and thriving commercial areas.

For middle-class neighborhoods: This plan will hopefully take some upward price pressure off existing housing, as there will be less competition for it. These areas are often the "second choice" neighborhoods for those who can't quite afford Southwest Minneapolis, so they should see a pretty direct filtering effect.

For "hot" neighborhoods, this plan may represent a chance to breathe a little, as some developers turn their attention elsewhere. One important observation is that if this comes to pass, it will better distribute the burdens of growth on the city's public infrastructure. Right now, a rush-hour bus ride from downtown to Uptown, a distance of about two miles, can take 45 minutes. Meanwhile, the streets in much of the city have plenty of excess capacity.

An Open Streets event on North Minneapolis’s West Broadway in 2016. (Source: Flickr)

For the poorest neighborhoods: One of the biggest obstacles to revitalization in North Minneapolis in particular is that the area is a commercial desert. Neighbors' spending power isn't sufficient to support locally-owned businesses, and there's a lot of vacancy on the commercial corridor of West Broadway as a result. North Minneapolis, quite simply, could use more people. This could set off a virtuous cycle, with dollars to spend locally, fewer vacant homes, and more eyes on the street.

Some North Minneapolis residents express an understandable fear of development. This isn't NIMBYism; rather, it's fear that when development comes, it'll feel like floodgates opening. The fire hose instead of the trickle. But allowing triplexes on single-family lots, in a neighborhood that is over 50% renters, isn't opening the floodgates. A bootstrapping small-scale developer can build and operate a triplex. People with roots in the community can be small-scale landlords.

The Public Engagement Process

Minneapolis has been having the same conversation, and the same intense conflicts, as many other cities. We spent a whole week in 2018 profiling Austin, Texas's failure to pass similar reforms. Single-family zoning is seen as a political third rail in more places than not: you don't touch it if you don't want to get voted out. In Minneapolis, 12 of 13 council members voted for the 2040 plan. (The one "no" vote was from the representative of the city's wealthy southwestern corner.)

How did Minneapolis do it? Janne Flisrand, one of the organizers of the pro-housing group Neighbors for More Neighbors, argues at that the "secret sauce" was a thoughtful approach to public engagement, in which city staff went far beyond traditional public meetings to meet residents where they were and include historically under-represented voices in the process.

[The city's planning] team rebalanced which voices get space in the process. Instead of harvesting lettuce, lettuce, and more lettuce, they harvested lettuce, eggplant, jabaneros, beets, corn, and more lettuce. Instead of hearing the same old powerful perspectives, we all got to hear diverse perspectives. It’s allowing us to begin the hard work we’ve been avoiding for decades: addressing our housing, racial justice, and climate challenges.

They made it possible to approve an ambitious vision I’m excited to experience when I’m 70.

 The details will need to be ironed out, and there's plenty that's incomplete or could go wrong. (Look for a follow-up article here at some point digging into that aspect with a more critical eye.) And the passage of the plan certainly doesn't mean that its critics have been won over or won't continue to push back.

And I get it. Longtime residents of a place, especially but not exclusively homeowners, are concerned about transformation: a fear of the unknown, a fear of losing the city they grew up with and stayed in because they loved it. They may feel a sense that those who are the loudest evangelists for change are somehow alien to their values and don't share their sense of what makes the place lovable.

There's no simple, pat solution to those anxieties. We have to talk with our neighbors and friends and work through them. But what is true is that the antidote to radical, disorienting, life-disrupting change in our cities is to accept a little chaos, to recognize that we can't put the places we love under glass. That they have to evolve.

Huge kudos to Minneapolis for passing a plan that reflects this understanding.