The reality and myth of the Minneapolis 2040 plan


The Minneapolis 2040 plan is back in the news, but not for fun reasons.

Last week, a Hennepin County district court judge ordered the City of Minneapolis to stop implementing that groundbreaking comprehensive plan until the city could demonstrate that the plan complied with state environmental legislation. The plan, which was adopted over three years ago, has been under legal threat since then by a coalition of environmental groups acting as a front for reactionary residents. These groups were laughed out of court until they somehow persuaded the Minnesota Supreme Court to rule that comprehensive plans can be subject to environmental review. Now they have seemingly buffaloed a judge into ruling, essentially, that cities must conduct exhaustive and expensive studies into every hypothetical impact that might arise from the act of planning for the future. I’m not a lawyer, but it’s a ruling that seems so genuinely nutty that there’s reason to hope it’ll ultimately be reversed.

But in the interim, the ruling is an opportunity to take stock of the plan, what it has and hasn’t accomplished, and perhaps do a bit of (what Alon Levy calls) “meme weeding” about the most famous piece of American housing policy this side of the Sierras.

The Minneapolis 2040 plan did not cause a surge in housing production

Everyone knows that there is a disconnect between campaigning and governing. It’s nothing new to note that rhetoric does not match reality. Both opponents and proponents of the Minneapolis 2040 plan have found that in the political arena, their interests are aligned in exaggerating the impacts of the plan. Opponents have emphasized the possibility that the plan will lead to a massive wave of redevelopment that will destroy existing and beloved neighborhood fabric. Proponents have emphasized the possibility that the plan will lead to a massive wave of redevelopment that will expand housing supply and lower rents.

Because housing issues now have a national audience, this activist framing has become a widely held belief. In a recent viral tweet, a New York City politico wrote that “Minneapolis saw a huge increase in new housing supply under its 2040 updated zoning code…”

The only problem is that this is not correct. The adoption of the Minneapolis 2040 plan did not lead to a surge in housing production in that city.

Last year, I wrote two articles on this general topic, one looking at housing starts across the MSP metro and the other looking at planning commission approvals in Minneapolis particularly. Earlier this year, I updated the charts from those articles with another year’s worth of data, and somewhat more recently, I’ve been posting a chart of the 12 month moving average of housing starts in both core cities. It does not take any special understanding of statistics to see that the enactment of Minneapolis 2040 did not lead to any discernable surge in housing production in the city. In fact, housing production swiftly declined after the plan went into effect in January of 2020.

12-month moving average of housing starts in Minneapolis and St. Paul. Data source: U.S Department of Housing and Urban Development.

But for those who do like more complicated statistical analysis, the Minneapolis Federal Reserve has also been looking into this. The Fed’s approach is to look at what is happening in the city and compare it to a synthetic control, essentially a hypothetical Minneapolis without the 2040 plan with estimated housing production based on the trajectory of peer cities. This analysis finds something surprising: since passing the 2040 plan, Minneapolis has produced less housing than would’ve otherwise been expected.

So wait—did the Minneapolis 2040 plan somehow reduce housing production instead of increasing it? There’s at least one reason to believe that this occurred. As a part of the political compromises that passed the plan, the City Council concurrently passed an inclusionary zoning policy, which may have depressed new development by imposing costly affordability mandates on builders.

But the inclusionary zoning policy remains in effect, while housing production soared in late 2021 and early 2022, approaching the levels that were seen before the policy was passed. If these mandates were so onerous as to crush the pipeline of new construction, why would their effects have disappeared despite a lack of changes? The far more compelling explanation for the downs and ups of Minneapolis’ housing production is the same explanation for everything else these days: shortly after the enactment of the plan, there was a once-in-a-century pandemic that completely upended work and the economy. Then, unique to Minneapolis, there was an especially horrific police killing that led to a week of unrest, years of political turmoil, and a fraught legal saga. There’s just no adequate comparison to what the city has been through in this period. Whatever organic effect Minneapolis 2040 may have had is impossible to discern in data that has been buffeted by far stronger forces.

The Minneapolis 2040 plan did not cause a surge in triplex production

The most ballyhooed part of the Minneapolis 2040 plan was the elimination of single-family-only zoning. Henceforth, property owners would be able to build up to three dwelling units on every parcel in the city. This was what opponents of the plan emphasized as the biggest threat, and consequently this is what proponents of the plan mobilized to defend. When the plan was adopted, triplex zoning was among the first priorities for implementation alongside inclusionary zoning.

Related to the idea that Minneapolis 2040 led to a surge in overall housing production is the idea that the plan led to a surge in small multi-family housing production. A recent viral tweet by a Chicago architect helped popularize this view before the author deleted it after getting better information.

Here’s that better information: the production of units in small multi-family buildings has increased in recent years, but is comparable to what was being built before the late-’00s housing crash and is small in absolute terms. In 2021, just 76 units were produced in these types of buildings in Minneapolis and St. Paul combined, broken up among 15 duplexes, five triplexes, and two fourplexes.

The good news is that 2022 is off to a decent for this type of housing. In the first third of the year,  two duplexes, three triplexes, and two fourplexes have started construction, for a total of 25 units. All but one of the buildings is in Minneapolis. Assuming that pace continues (and we really have no way of knowing either way), 2022 would nearly repeat 2021’s relatively elevated level of unit production in small multi-family structures. But again—these are not large numbers. An entire year’s haul of duplexes, triplexes, and fourplexes has been equivalent to a single medium-sized apartment building at best.

Reporter Jake Blumgart recently wrote in Governing about this. Summarizing comments made by streets.mn contributor Janne Flisrand, he wrote that the triplex zoning was “by nature incremental. It allows for more possibilities, but doesn’t guarantee them and certainly does not produce them quickly.” This is a critical point.

Demand to live in the Twin Cities is steady but not overwhelming

Many of us are terminally online these days. One of the great benefits of this is that good ideas and good stories spread rapidly. This is why many people around the country are unusually well-informed about Minneapolis’ comprehensive plan. But a downside is that the conversation becomes flattened and differences between places and circumstances are erased.

Among the community of people who discuss housing policy online and in the media, places like San Francisco, Los Angeles, and New York City loom large. These are places with large populations, a lot of journalists, and absurd housing prices. Occasionally the discourse makes room for sunbelt cities that everyone knows are growing and sprawling, or for rust belt cities that everyone knows are barely growing if at all.

But Minneapolis is not any of these cities. It belongs alongside places like Columbus or Indianapolis that are growing at a modest, steady rate. Demand to live in these places is constant, and it is putting pressure on housing supply, but it is not unmanageable.

The Minneapolis 2040 plan needs to be understood in this context. While it may make political sense to talk about the plan as a kind of just-so story, in which the plan was implemented and the effect was clear and immediate, this is not what happened and was never going to be what happened. Before voting in favor of the plan, then-planning commissioner Nick Magrino pointed out that despite being zoned for higher density, there were still single-family homes within the downtown area. That’s still the case today.

Unlike in other places, where zoning restrictions act like a cork holding back a shaken bottle of champagne, and where similar reforms might be expected to have a big effect, in Minneapolis they were capping something more akin to a flat soda. The city was and is a relatively affordable place to live even before the adoption of the comprehensive plan, and at best has gotten marginally more so in the time since.

So should we even care about the Minneapolis 2040 plan?

It’s always easier to tell stories about heroes and villains, great triumphs and abject failures. It’s not as compelling to talk about qualified, incremental success. Yet that’s what Minneapolis 2040 is. It’s a mild land use plan that took on enormous emotional significance mainly because the overall conversation around land use in the country was so ossified. It’s a forward-looking document at a time when the crises that we collectively face seem so immediate.

There have been real impacts at the margin. Thanks to the plan’s height minimums, 45 extra households will be able to live in downtown than would’ve otherwise occurred. An innovative, low-carbon, transit-accessible apartment building was recently approved (after some delay) on a Northeast street where it wouldn’t have been allowed before.

There have also been procedural impacts. The plan’s adoption cleared the way for progressive changes like the elimination of parking minimums and the legalization of single-room occupancy projects, which may not have been so smoothly accepted had they come forward piecemeal. The effects of any of these policies is tempered by the naturally long process it takes to design, approve, and build a unit of housing. But we can see movement below the topline figures. Already in 2022, the ratio of parking units to housing units has hit the lowest point since parking minimums were first imposed.

But I think the plan’s two biggest consequences may be much harder to see. One is that, by passing the plan, Minneapolis sent a clear message that it would proactively welcome further growth and that doing so could make the city better and fairer. Many cities and communities instead take an adversarial approach towards new residents and new housing. A lawsuit filed by a handful of malcontents does not do much to change the strength or nature of the signal that Minneapolis sent locally and nationally.

Second, Minneapolis 2040 set in motion changes that will better prepare the city for the future. We do not know what exactly that future may hold. But we know that some of today’s fastest growing American cities are also some of the most environmentally or geologically precarious. It’s true that Minnesota has brutally cold winters, but at some point in the near future that might seem like a fair price to pay if the alternative is toxic dust storms. By expanding its zoned capacity, Minneapolis gave itself new flexibility to adapt to whatever the future holds, and it greased the wheels so that it can make further changes if need be in the next comprehensive plan cycle. These are changes that won’t show up in the numbers until suddenly they do.

One of the absurdities of the district court decision that halted the implementation of the Minneapolis 2040 plan is its insistence on assessing the plan as if every possible housing unit was built at once. This is a ridiculous standard. Planning doesn’t work that way. A plan like Minneapolis 2040 is, at its core, about things that are hard to define and measure. Things like increasing flexibility for an unknowable future. Things like increasing choices for a multiplicity of actors. The purpose of the plan is to bend the arc of the future, not to rigidly shape it. It cannot be judged any other way.

Top image credit: Alex Schieferdecker





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