Development and Taxes in Linden Hills

Many neighborhoods want restricted development, low taxes, and ample city services. The problem is that they can have only two.

In August 2014, many residents of Linden Hills, a rich neighborhood in southwest Minneapolis, voiced their opposition to a proposed four-story mixed-use building in the neighborhood’s commercial node at 43rd St and Upton Ave. The development will replace a surface parking lot and a single-story national chain barbecue restaurant. City Council approved the project. (Here’s a PDF of the city’s staff report.)

In December 2014, many residents of Linden Hills sent emails to their City Council member, Linea Palmisano, complaining about high property taxes, and asking her to cut spending.

Here’s a point about property taxes that hasn’t been made often enough: Mayor Hodges and the city council raised the tax levy, but the tax bill for the average home in Minneapolis actually fell. This is a point that seems to have escaped the understanding of a corporate lawyer who ran for mayor in 2013, but we all know what Upton Sinclair said about salary and understanding. Tax bills fell because the tax base is growing faster than the tax levy, so the burden of running the city is borne by more shoulders. (A fun factoid: the City of Minneapolis grew its tax base by 2.4% in a single year, which is equivalent to the value of all the real estate in Brooklyn Center. It’s like Minneapolis built another Brooklyn Center within its city limits in twelve months.)

Here’s how the city’s finance department explains the situation: “With the significant growth in our tax base over the last year, the proposed increase in the levy means about 57 percent of all residential properties will see no increase in the City portion of their property taxes, or will see a decrease.”

But if taxes for the median home decreased, why have taxes in Linden Hills increased? It’s because their homes are appreciating in value very quickly. According to the city assessor, the average home in Linden Hills increased in value by more than 13% from 2013 to 2014, compared to the 6.76% city-wide average. Congratulations, southwest homeowners! Your homes are appreciating at astronomical rates, and many of them have topped pre-recession prices. But yes, that means your tax bills will rise, too. Not everyone has it so good—most home prices in north Minneapolis are growing in the 0-2% range. Luckily, Minneapolis recently legalized accessory dwelling units, which give homeowners new housing options that would help them age in place.

Flux apartments. Photo by flickr user Matt Lewis.

Flux apartments. Photo by flickr user Matt Lewis.

A growing tax base is keeping property taxes lower than they would be otherwise. According to my rough math, a single new apartment building like Flux in Uptown pays $869,000 in taxes per year. So, every time a new development is shut down because the neighbors deem it inconsistent with the existing character of the neighborhood, the budget gets a little tighter, and City Hall has to choose between cutting services and raising taxes on existing property. Preserving neighborhood character is an important ideal, but it’s not all-important and it’s more complex than just an architectural style popular in the 1890s, or a ratio of homeowners to renters.

Chris Iverson recently explained how new development affects nearby rents. New development and property taxes are related, as well. Without new development, property taxes will be higher (or city services will be lower) than they would be with new development. So here’s the big question that the residents of Linden Hills (among other places) need to wrestle with: to what extent are well-funded city services and moderate property taxes a priority for you and your neighbors?

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65 Responses to Development and Taxes in Linden Hills

  1. Thomas Mercier January 12, 2015 at 9:10 am #

    Maybe they’d prefer that taxes become a flat amount borne equally by all classifications of property (residential, dense residential, commercial, etc.). I’m sure that kind of regressive taxation would be well supported by those most able to afford it.

    • Matt Steele
      Matt Steele January 12, 2015 at 12:54 pm #

      Property taxes are already regressive, compared to a land value tax.

  2. Sean Hayford Oleary
    Sean Hayford Oleary January 12, 2015 at 9:19 am #

    Excellent article for something I think readily understood by most urbanist types but not necessarily something the average citizen/voter/homeowner has thought through.

    The specific argument would need to be expanded somewhat for cities who aren’t landlocked — since people tend to assume you can just as easily build out as up, and don’t consider the cost of serving a larger city — but it still very much applies with the right information. And this applies directly to Minneapolis, St. Paul, or any other metro cities who aren’t on the suburban fringe.

  3. Shawn January 12, 2015 at 10:17 am #

    Good article, thanks for the insight.

    A point on “neighborhood character”:

    Folks choose where to live based the essence of the neighborhood as much as the buildings themselves. Of course it’s more than architectural style and homeowner to renter ratios. When you drop in a significantly higher density structure it necessarily changes the complexion of the neighborhood. Residents are right to be concerned with how this affects them but they should be willing to consider tax implications.

    It is good that you draw this connection, but density for density’s sake is also not a good plan. I’d bet homeowners would rather pay a reasonable amount more in taxes to than drastically alter the character of their neighborhood.

    Complaining about taxes is an age-old hobby. Sure, their property values went up, but they’re not getting 14% cleaner water or 14% faster snow plowing. 🙂 Property Taxes are an imperfect means of distributing the costs of running a city.

    • Adam Miller
      Adam Miller January 12, 2015 at 10:33 am #

      What if homeowners are wrong about what density will mean for their neighborhood, and/or concerns are really about not continuing to get other people to pay for things they want (e.g., on street parking)?

    • Alex Cecchini
      Alex Cecchini January 12, 2015 at 10:42 am #

      “I’d bet homeowners would rather pay a reasonable amount more in taxes to than drastically alter the character of their neighborhood.”

      I doubt that. In fact, that’s the reason Scott used LH residents as an example – the disparity in the things they’re asking the city to do for them. They clearly do not like the increase in property taxes despite their neighborhood seeing very little change over the past 30 years.

      It’s my opinion that arguments based on the “essence of a neighborhood” claim a much higher level of importance on keeping static that feel relative to the complex decision-making process that went in to buying that property in the first place. In the realm of all Maslow’s personal needs, this has to rank pretty low on the importance scale – which is why I don’t think it should be the city’s job to protect that desire. Especially when the trade-off is reduced affordability by limiting housing/commercial supply, keeping people who want to live in the city out, and an artificial ceiling on the tax base (which can help pay for programs that really help other communities).

    • Scott Shaffer
      Scott Shaffer January 12, 2015 at 10:48 am #

      Thanks for your comment!

      Maybe it’s just because I’m neurotic, but when you talk about “essence of the neighborhood” and its “complexion,” I get skittish and remember the racist history of homeowners associations. https://streets.mn/2014/01/30/minneapolis-conservation-districts-are-a-terrible-idea/

      But here’s a point that’s not tax-related: the people who would live in a new development have feelings and desires, too. They have an interest in living in a great, walkable, amenity-rich neighborhood like Linden Hills. Why should the preference of some existing residents for a certain ambiance trump the interests of these would-be residents?

      • Shawn January 13, 2015 at 11:35 am #

        Yea… there’s always race history going on. I’ll leave this here:
        http://ncase.me/polygons/

        ” the people who would live in a new development have feelings and desires, too. They have an interest in living in a great, walkable, amenity-rich neighborhood like Linden Hills. Why should the preference of some existing residents for a certain ambiance trump the interests of these would-be residents?”

        I just want to try and boil this down.

        I have a cup of potato soup. You have a bowl of Pumpkin. You’re suggesting that because You have a bowl of pumpkin soup that I should give up my potato soup.

        What?

        If this analogy is confusing and imperfect, so is your suggestion that the current residents – those who have built their lives in the neighborhood and invested [lots of] their money in the neighborhood – are LESS important than those who might move in. I just want you to think about that for a second.

        It’s more important that we prepare for the next resident than attend to the current one.

        Think about that.

        Isn’t that weird?

        • Shawn January 13, 2015 at 11:36 am #

          Where would that cycle of ignoring the current residents for unknown future residents end?

        • Adam Miller
          Adam Miller January 13, 2015 at 12:08 pm #

          He said “some” existing residents.

        • Scott Shaffer
          Scott Shaffer January 17, 2015 at 6:57 am #

          Here’s a better soup analogy:

          People are sitting in a restaurant, eating potato soup. Someone enters the restaurant, sits at an empty table, and orders pumpkin soup, but the potato-soup-eaters kick that person out because they don’t like the smell of pumpkin soup.

    • Wayne January 12, 2015 at 12:24 pm #

      “When you drop in a significantly higher density structure it necessarily changes the complexion of the neighborhood.”

      I’m going to give you the benefit of the doubt and assume this is questionable word choice and not outright racism.

      “I’d bet homeowners would rather pay a reasonable amount more in taxes to than drastically alter the character of their neighborhood.”

      This smacks of privilege and the kind of snobbery that leads to ultra-rich enclaves and cities where no one but the rich can live. If you let the richest decide your housing policy, only the rich will be allowed to live there because they don’t want ‘the poors’ around them. Anti-development attitudes justified like this lead to things like san fransisco, where they’re too afraid to disturb the existing nature of anything and now all but the richest tech playboys have been priced out. I’m sure people in SW Minneapolis would love to price the rest of us out, but I’m very glad they don’t control our housing policy. I’m sure they wish they could buy politicians on the local level the same way they do nationally.

      • Aaron January 12, 2015 at 3:31 pm #

        I’m for the project. I was for Linden Crossing before it became this project. Despite that, I wouldn’t get carried away extolling the virtues of this project in opening up LH to anybody but the rich. This is not an affordable housing project; it’s a luxury project. Imagine the response to somebody building an actual affordable housing complex in Linden Hills.

        I don’t really understand the opposition. This building (http://goo.gl/wsGJCH) is literally one block from the site.

        • Wayne January 12, 2015 at 4:33 pm #

          Oh I didn’t think it would make that area affordable–nothing really will. But if that kind of *thinking* takes hold, the entire city will eventually gentrify into something unaffordable like SF. Some neighborhoods will always be ritzy, but if you let them add new (expensive) units to those areas it doesn’t spill over and gobble up the affordable ones so quickly.

          • Shawn January 13, 2015 at 11:01 am #

            Whoa. Chill… Privilege, snobbery, racism? Those are some pretty powerful assumptions to bring into the discussion. Why would you assume any of that? Are you projecting your your own internal fears and biases.

            I’ll quote Carl (1/12/15 10:35am):
            “People wanting to protect the charm of their neighborhoods within reason is a good thing. … As Linden Hills becomes more like Lake of the Isles I don’t cheer, something will be lost, my something will be lost. The City may gain taxes, but something special something this site writes about and fights for will be lessened. My monetary gain I guess, the City’s loss.”

            I’m still completely amazed at the willingness of the authors and commentators here to [literally] discard the current residents of a place because some higher density thing became an option. It is so easy to displace other folks when you don’t have to care about them.

            (I”m not a resident of Linden Hills.)

            • Eric Anondson
              Eric Anondson January 13, 2015 at 1:11 pm #

              What resident is being displaced from the condo development?

            • Wayne January 13, 2015 at 3:17 pm #

              So it’s ok for people who currently live somewhere to displace all future people who might be able to live there too? It smacks of “I’ve got mine, now you can piss off.”

              And seriously, you don’t see the racist overtones of “change the complexion” as a turn of phrase regarding denser development?

              • Shawn January 16, 2015 at 3:27 pm #

                Hey man, you can see what you want to see. When all you have is a hammer, all you start to see are nails.

                I’m not denying racism isn’t a thing. My argument that folks have a right and reason to care about their neighborhood is simply race independent. I’m sorry if you don’t see that.

  4. Carl January 12, 2015 at 10:35 am #

    Linden Hills is more than a tax area to raise money for the City, it is a neighborhood. A neighborhood with the appraised value of houses going up because of teardowns and larger houses being built. I bought my house there ten years ago from a retired couple who raised a family there with only the husband working in a warehouse. My house has gone up in value since I bought it. I won’t see any benefit from that unless I decide to sell. I don’t want to sell. I moved there because I love the City, the lakes, the parks, the bike paths, the small retail areas (I wasn’t opposed to the new condo, I thought it would be a nice addition).

    People wanting to protect the charm of their neighborhoods within reason is a good thing. I read the articles on this site about eliminating “stroads” , building sidewalks, pedestrian retail, not for the rich but for just people, and cheer. As Linden Hills becomes more like Lake of the Isles I don’t cheer, something will be lost, my something will be lost. The City may gain taxes, but something special something this site writes about and fights for will be lessened. My monetary gain I guess, the City’s loss.

    • Alex Cecchini
      Alex Cecchini January 12, 2015 at 10:51 am #

      Linden Hills would be pretty nice if it looked more like Lowry Hill. Lowry Hill wouldn’t look so bad if it were more like Loring Park. You may think something terrible is lost, but the end-result of that scenario is double (?more?) the people being able to enjoy walking, biking, transit, lakes, trails, proximity to downtown, etc. It’s that much more opportunity for businesses to pop up and serve local communities thanks to a larger population nearby. Clearly these future people (and the city’s tax base/ability to afford better levels of service) won’t think it’s the city’s loss. Do you mourn the loss of the single family homes that once stood in the current downtown area?

      • Mark January 12, 2015 at 11:45 am #

        And the city neighborhoods become ugly with chain stores and generic buildings, over crowded and the streets are less safe to walk and bike. While more and more people move to the burbs.
        http://www.newgeography.com/content/004532-millennials-a-powerful-suburban-living-generation

        • Alex Cecchini
          Alex Cecchini January 12, 2015 at 12:34 pm #

          Are streetcar-era buildings & most of our single family housing stock also not generic? https://streets.mn/2014/12/23/a-corner-store-classic/

          In the case of Linden Hills, the current site was occupied by a Famous Dave’s (chain), blighted surface parking lot, next to a Dunn Bros (chain, in an OLD building!). It will only take 1 unique shop (in 4 total retail bays) to beat the current configuration, and the street presence is infinitely better. I guess I’m also not a lover of chains, but I don’t like to detract from them as it makes a value judgment on others who might like the predictability of the food/drinks/hours/merchandise they can find. That’s their prerogative.

          The area being more crowded will make this place safer to walk and bike – cars will naturally drive slower in the presence of people, shops, etc.

          Finally, I think the overgeneralizations about “The Millennials TM” are frustrating. But you can’t claim that more housing units will mean more people moving to the burbs. Plus, there are actually many people like myself (29, with a wife and young kid) who have zero plans of leaving Minneapolis, and many of us do find increasing the number of shopping/dining options available to be a positive thing over the next 40-60 years of our lives.

          • Shawn January 13, 2015 at 11:09 am #

            Famous Dave’s Linden Hills was hardly just a “chain” with a ‘blighted parking lot’. It was store number 2 or so opened in 1995 of this then-based MN restaurant that was founded in 1994.

            Where would you have had them put parking for up to 75 guests?
            http://www.famousdaves.com/our-barbeque/meet-dave

            Dunn Brother’s? MN chain founded in 1987.
            http://dunnbros.com/about/

            I’m not saying your points are out of line, but your history is misguided. FD and Dunn are MN Success stories, not bastions of cookie cutter corporatism.

            • Peter January 13, 2015 at 12:53 pm #

              FD is probably moving to Illinois because that’s where the new CEO lives. Dave manages a single restaurant and isn’t really involved at the corporate level anymore. FD is quickly becoming another example of cookie cutter corporatism.

            • Rachel Q January 14, 2015 at 3:17 pm #

              Thanks for pointing this out Shawn. I was going to jump in and add that the “chain” Famous Daves was practically born in this location, so it’s really a historic site. That’s not to say that I disapprove of the site being used for something else, but it’s a far different story than if it were a McDonalds on the site. Great Harvest Bread down the road from there is also now a “chain” but I would never want to see that depart from the neighborhood. Same with Creative Kidstuff. The fact that multiple business in this neighborhood have gone on to national recognition and other opportunities is a testament to how amazing this neighborhood is.

      • C. Phillips January 12, 2015 at 12:05 pm #

        I don’t think your reasoning works; the vast majority of the new development in the area isn’t dense infill (leaving Linden Corners, specifically, out of the equation, which Carl says he supported), but large new single family houses replacing smaller single family homes — not the Lowry Hill of apartments lining Hennepin, but the interior Lowry Hill of large, single family mansions. It’s a richer population, but not necessarily a larger one or one that is any more interested in walking or biking or taking the bus or in supporting local business.

        I will be curious to see how ADUs play out in Linden Hills; it would be wonderful to see them take off in the neighborhood.

        • Alex Cecchini
          Alex Cecchini January 12, 2015 at 12:13 pm #

          The interior of Lowry Hill has quite a few duplexes, triplexes, converted mansions, and even small (2.5-3.5 story) apartment buildings. Linden Hills could have these as well.

          ADUs are a huge opportunity, especially in a mostly “residential” (to be more specific, single family home residential) area like Linden Hills. But as I wrote in my ADU suggestion piece, I’m not certain it will be a huge impact. Timing, cost, site details, etc may make it so we only see a couple units a year per neighborhood. Plus, pure conjecture here, but I have my doubts that the ultra-wealthy will be really keen on having a stranger living in their back yard.

          • Sean Hayford Oleary
            Sean Hayford Oleary January 12, 2015 at 12:21 pm #

            One quirk of Linden Hills, compared to the rest of Minneapolis, is that relatively few blocks have alleys. This makes on-street parking tighter (due to many more driveway cuts), and means a lot more of the lot is used up for a long driveway to the back. It would seem to limit ADU options, at least somewhat.

            • C. Phillips January 12, 2015 at 7:14 pm #

              Not sure about how it will work with the Minneapolis codes, but for whatever it’s worth, we’ve lived in two rear homes in other cities accessible only via the driveway; perhaps that can even be a plus, if the existence of a driveway to the front street doubles up as a spacious entrance sidewalk.

              As to the comment about wealthy people and ADUs, I can also imagine that there could be some who would like to build an ADU to use as a guest cottage; that may not make any difference for actual housing now, but could be converted to rentals in the future (or by future owners).

              • Sean Hayford Oleary
                Sean Hayford Oleary January 12, 2015 at 11:11 pm #

                It really depends on the size of the main house and configuration of the lot. A very popular format for *new* homes is the tuckunder, and using as much of the width of the lot as possible for the principal structure. This basically precludes an ADU in back — or at the very least means you couldn’t provide any off-street parking for the ADU resident.

                But that’s not the case with older homes, where it often is common to have a narrow driveway going to the back. In those existing cases, building an ADU might work.

        • Scott Shaffer
          Scott Shaffer January 12, 2015 at 12:19 pm #

          “I will be curious to see how ADUs play out in Linden Hills; it would be wonderful to see them take off in the neighborhood.”

          I agree totally. I think it will provide an attractive alternative to teardowns.

          A note on mansions: I live in one of those old Hennepin-adjacent apartments in Lowry Hill, and I really enjoy biking past extravagant houses on my way to Kenwood Park or Hidden Beach. (That’s not to say that it’s appropriate for the city to use its powers to secure my preferred form of architecture.)

    • Adam Miller
      Adam Miller January 12, 2015 at 10:54 am #

      Why do you think you get no benefit from getting richer?

      Making use of your new-found wealth is a little more complicated because you want to keep your appreciating asset, but it’s not exactly hard.

      • Shawn January 13, 2015 at 11:19 am #

        Hrm? Increased home value doesn’t directly equate with increased “riches”. The increased home value doesn’t provide funds with which to pay the increased taxes.

        As you say, you have to get money out of the appreciating asset – but most people don’t like taking out loans from their equity to pay their property taxes and regular lifestyle living expenses, right?

        • Adam Miller
          Adam Miller January 13, 2015 at 11:55 am #

          I didn’t say, “riches.” I said “richer.”

          Your home is an asset like any other. When it appreciates in value, you own a more valuable asset and you are richer. That’s true regardless of whether the asset is a house or a share of Amazon.

          So the complaint shifts to, “but I don’t want to sell it!” So what? That doesn’t make you any less rich. It means you have both an appreciated asset and a preference to keep it.

          It really isn’t that hard to figure out how to deal with that situation, and responding that you don’t “like” the most obvious ways to do it does not make you more sympathetic. You’re still a person who is complaining that circumstances have made you more wealthy.

          • khoover January 15, 2015 at 10:57 pm #

            Call me old-fashoned, but my house is our family home, not some stock in an investment portfolio something most people don’t have anyway. This is my second fixer-upper – lived in the first 17 years and this one 16 so-far, and no, I didn’t sell the first for a profit, But I fixed up a 1909 house with bad plaster & good bones, and it’s good to go, provided people take care of it, for another 100 years. My current house wasn’t in good shape when I bought it, which made it, I confess, affordable. I loved my old house, but needed more 1st floor for my mom & moved about 10 blocks to the new house, also in S. Mpls. The electrician was here for 2 1/2 weeks just to bring it up to code. I’ve invested a lot of money and thousands of hours of my own work in it. I raised my daughter here; took care of my mom. Now, it’s nearly paid off, maybe 8 years. But my property tax, which was steep when I bought it, now exceeds my mortgage payment. Yes, we do have a property tax break in MN for lower-income people, but the maximum refund is only about 20% of my property tax. My house, after the recession, is still worth less than I’ve put into it, not including my labor, but not by so much. My tax has increased by well over 100% in 15 years, while my income is lower than when I bought the house. The real problem is the regressive nature of property tax.
            I actually liked the original proposal for Linden Hills, but I think you need to understand how realistically fearful people are about being taxed out of their homes.
            Also, who would actually want to live in a city where people traded their homes on the spot market like shares of Amazon?

          • Shawn January 16, 2015 at 3:33 pm #

            Adam,
            I’m not convinced you’re a home owner. Most people live in their homes for decades. They can’t easily capitalize any appreciation in value as that results in either increased debt servicing or extended payment terms. That results in the net appreciation value of a home being nullified by the costs associated with getting the value out of the asset. It’s pretty much a wash.

            There’s very little wealth generation, and you’re not really richer – you don’t have any additional income with which to change your lifestyle.

            But let’s say you do get some value out, how long does it last? How much do you trust the housing and job market? A Home as an investment vehicle is a risky proposition. Ask 2008.

            • Adam Miller
              Adam Miller January 16, 2015 at 4:16 pm #

              If your house has appreciated by$100,000 and you’re got 100% equity and can’t find a way to make use of any of that new-found wealth, it’s because you don’t want to, not because you can’t.

              And it most definitely does not make you someone who is poor or deserving of special treatment.

  5. Carl January 12, 2015 at 11:07 am #

    The dozen condos they want to build are mostly million dollar plus. The 1500 SF houses they tear down are replaced by $800,000 McMansions squeezed on small lots, they don’t look like Lowry Hill. More money not more people. More BMWs not more buses. Also more fences and gates. Do a drive though or a walk through, you’ll see.

    • Alex Cecchini
      Alex Cecchini January 12, 2015 at 12:10 pm #

      Funny, the original proposal for Linden Corner (now Crossing) would have had units in the $400-450k range. Far more affordable. http://www.startribune.com/local/minneapolis/270413271.html Funny how neighborhood concerns have unintended consequences. Besides, these units, even at $1million, are replacing no previous housing, so they’re simply acting to keep price pressure on area houses down. Some empty-nesters with a ton of money might have otherwise decided to bid up a bungalow instead.

      And I’m not surprised that brand-new construction on a lot that has seen its land costs rise quite a bit thanks to zoning restrictions would be high price from day 1. $800k McMansions could be duplexes, small apartments, townhomes with garden units, etc if zoning weren’t so restrictive as well.

      • Sean Hayford Oleary
        Sean Hayford Oleary January 12, 2015 at 12:16 pm #

        I’ve heard similar arguments for why more luxury apartments in uptown are a good thing (even when wiping out more affordable housing). It seems specious. If all units of housing were identical widgets, then it might be a perfect supply/demand curve. But they’re not. New, much more expensive can have one of two effects:

        1. Because more units are available, a landlord (or homeowner selling) lowers the cost of their housing to compete. (Supply/Demand.)

        2. Because the new units are much more expensive and luxurious, and because they’re being filled, landlords realize they can toss a cheap slab of granite down and charge twice as much money for rent. (Gentrification.)

        Anecdotally, I’ve heard of one instance ever of #1 happening. And many, many instances of #2 happening.

        I’m not against this apartment building, for the record. But I do think #2 is a real consequence — and a well-established result of gentrification.

        • Adam Miller
          Adam Miller January 12, 2015 at 12:42 pm #

          Which uptown luxury apartments wiped out more affordable housing?

          When we’ve discussed this before, the only example I’ve seen is the building on the corner of Lake Calhoun on Lake Street (the one featured in the “dime store Ryan Gosling” promotional video).

          As for anecdotes, it’s definitely worth reading the Chris Iverson analysis that is linked in the article.

          • Sean Hayford Oleary
            Sean Hayford Oleary January 12, 2015 at 12:52 pm #

            Was making a nudge at 2320 Colfax with the uptown reference.

            I enjoyed Chris’s analysis, but I think his note here is important: “Unlike traditional gentrification situations where increased housing units and density attracts more population, the studentification only attracts a specific, already present population and skews the surrounding market.”

            A place like Linden Hills is a lot less pure, since most people who move there could just as easily live somewhere else. And someone living somewhere else (if they can afford it) can just as easily live there.

        • Alex Cecchini
          Alex Cecchini January 12, 2015 at 1:01 pm #

          So, would #2 not happen if the new apartments weren’t built? That landlords see there is still existing demand and they can throw a slab of granite down means supply has not caught up with demand.

          There may be virtuous cycle effects where new development comes with new amenities (like ground floor shops, or calmed streets, or even reduced crime) which ends up making the area more desirable, feeding its own demand curve. But 1) is that a thing we should discourage? Making the city more desirable? and 2) those effects are less than restricting supply.

        • Wayne January 13, 2015 at 4:38 pm #

          #1 won’t happen for a while because we have a severe rental housing shortage. As soon as supply catches up to demand (which, well … see above about it will be a while) the addition of new units would have that effect. But not building anything will guarantee rising rents. If we keep building at the same pace they’re adding units now we *might* catch up in 5-10 years and by then all the new ‘luxury’ buildings will be getting marked down rents because they won’t age particularly well.

          I live in one of these new buildings (not in uptown, though, ick) and I can tell it wasn’t built super well. It’s fine for me now and it’s nice and new, but I can see it not being so great in ten years (seriously I know lumber is cheap but come on). Also “luxury” is just a marketing term. I sincerely doubt you’ll find many brand new buildings anywhere that don’t at least allude to luxury, if not outright market themselves as such. Nobody gets excited about their new “market rate domicile.” ( ;

  6. Keith Morris January 12, 2015 at 11:09 am #

    So, basically the same people who opposed a four story development, which fits the character of other similarly sized buildings just a block away, are complaining about taxes which would have gone down a bit if they had instead approved said development. I don’t get it.

    • Scott Shaffer
      Scott Shaffer January 12, 2015 at 11:17 am #

      To be fair, I haven’t found a Linden Hills resident who publicly spoke out against both taxes and development. It might just be that there are two groups of Linden Hills residents who are working at cross purposes who don’t know that they’re working at cross purposes.

  7. Carl January 12, 2015 at 11:39 am #

    My hundred year old 1500 SF 1 1/2 story has gone up in value some. It will never be near the value of the McMansions being built. It’s value is in being torn down, but the lot alone which is almost its only value now is worth about what I paid for the house and lot 10 years ago.

    I didn’t buy into the neighborhood to make money, I bought there to live. What’s happening there now will change the character of the neighborhood, it will bring in more tax money for the City, it won’t increase the population in that area for more people to enjoy it. It will probably lessen the population.

    I don’t expect sympathy for my plight. I’m experiencing gentrification first hand.

  8. Elliot Altbaum
    Elliot Altbaum January 12, 2015 at 11:50 am #

    Carl, “I don’t expect sympathy for my plight. I’m experiencing gentrification first hand.”

    I think this is one of the most interesting patterns emerging in SW Minneapolis right now. Middle class whites in 1500 sqft bungalows are psychologically in the same place as some black and immigrant communities throughout Minneapolis and St. Paul. Both groups use similar rhetoric of community and stability to guard against wealthier people from moving in.

    • Matt Brillhart January 12, 2015 at 3:35 pm #

      I was thinking the same thing. Middle class people getting “priced out” of their homes (and making a pretty penny in the process) is *not* gentrification. (see The Onion: http://www.theonion.com/articles/report-nations-gentrified-neighborhoods-threatened,2419/)

      Perhaps not in Linden Hills, which I believe has always remained extremely white and higher income (relative to the rest of Mpls), but in say, The Wedge, these folks doing the loudest complaining today are the original gentrifiers themselves! They just can’t see it now that 40 years have passed and they’re possibly now living on fixed incomes (not including untapped equity in their quadrupled-value homes).

      As a thought experiment, is it really so bad if, say, Whittier moved further upmarket over the next decade or so? The folks living near the bottom of that housing rental (or purchase) market today would have to instead look at Powderhorn or Phillips or Northeast. Repeat the cycle as the bottom end of those neighborhoods is raised by 5-10% or whatever. In a generation or two, we might actually start building houses on the hundreds of vacant lots in North Minneapolis that nobody wants right now.

      • khoover January 16, 2015 at 12:01 am #

        Oh, my, the Onion as an authoritative source. It’s so hard to understand irony or humor on web posts.

        Since I’ve been around a while, the original “gentrifiers” in the Wedge got there in the late 60s through mid ’70s. You’re saying these are the people complaining now? There weren’t many — most of the Wedge has been a rental neighborhood since the early 1960s if not before. The people who bought there now did so in the ’80s or after. They’re probably not on a fixed income yet, and given the state of the housing there after a generation or more of absentee-landlords, it seems a little unlikely that they’ve made a lot of money on their “investment.”

        Your thought experiment is interesting, though it raises some concerns. Is it rather like the libertarian notion that moving factory work from nation to nation based on the lowest wage will build global prosperity, except that eventually we run out of nations? And as John Maynard Keynes suggested in the Depression years, it is possible that the market is self-correcting in the long-term, but that’s not where people, or civil society, actually live. Maybe I’m wrong about your example, but more facts would help.

        BTW, there used to be a lot of working class people in Linden Hills, carpenters, plumbers, electricians – retired union members, and yes, they were mostly white, so far as I know, not all.

        • John Edwards
          John Edwards January 16, 2015 at 8:15 pm #

          Gentrification is a hobby of longtime Wedge residents that never stopped. I’ll write a post about it for you. Stay tuned.

  9. Nathaniel M Hood
    Nathaniel January 12, 2015 at 12:05 pm #

    Your fun factoid is absolutely amazing.

    “The City of Minneapolis grew its tax base by 2.4% in a single year, which is equivalent to the value of all the real estate in Brooklyn Center. It’s like Minneapolis built another Brooklyn Center within its city limits in twelve months.”

    I am going to steal this example. Great article.

  10. David Brauer January 12, 2015 at 3:26 pm #

    Just to remind folks of a point that gets lost in the Linden Hills chest-beating … the opponents, many of whom I know, were fine with increased density, under the existing zoning. What they objected to was going beyond that. That’s a different debate — not “density vs. no-density-increase” but “zoning code vs. a-bunch-of-exceptions-to-the-zoning-code.”

    I would also suggest, ever so gently, that those standing on soapboxes about the marketed price point of this project should grab some skepticism. It’s entirely possible the original (more affordable) price point was vaporware, and this new one is too. Anyone know how the units are selling? They didn’t the first time (NOT the fault of the NIMBYs, I’d argue) and word is they’re not this time (though I am only going by rumors, I admit).

    I still say there are great corridors, and great ways, to densify the city, but the Linden corner isn’t either. In any event, it will be interesting to see if this rookie developer, after many months/years, can pull it off, or if a savvy development vet will have to step in.

    • Alex Cecchini
      Alex Cecchini January 12, 2015 at 3:42 pm #

      9 of 19 sold thus far: http://www.lindencrossing.com/#floor-plans

      I’m curious how the epicenter of Linden Hills, in one of the highest-priced residential areas of the city, near Lake Harriet (& its bike trail access), surrounded by mixed-use/residential buildings ranging from 2-7 stories, and right on a branch of the 6 is a bad spot for development.

      • David Brauer January 12, 2015 at 4:30 pm #

        There you go again. Not *bad* for development. But the taller buildings nearby do not shade houses, fwiw. They exist in sort of an institutional cluster. Linden Corner isn’t quite that creamy – it s much closer to single family homes.

        Ps I was told by someone who inquired as a buyer that they could have their pick of any but 2. But like I said, my info isn’t definitive.

        • Alex Cecchini
          Alex Cecchini January 12, 2015 at 4:52 pm #

          You’ll have to excuse me. When you say “not great” when referring to the current design (or previous), with its height/massing/shading/unit density, I guess I take that description (knowing you’d be fine with something less dense) as “bad” or “not appropriate.”

          Theres clearly something about this area that makes it as (more?) desirable as Hiawatha/NL/Green way. Maybe it’s the lake a block away. Maybe it’s the proximity to Edina. Who knows. I’m of the opinion that every one of these units is a bungalow saved. And I place the shading of nearby homes pretty far down the list of nuisances, especially considering it’s not a constitutionally protected right, even in zoning-happy America.

          • David brauer January 12, 2015 at 6:16 pm #

            I think the theme of this piece is not engaging in “floor wax/dessert topping” magical thinking, and I’d argue the notion that Linden Corner will save bungalows is equally so. Those bungalow buyers are building large houses that I doubt even luxe condos would substitute for (most of the former are families; I’d bet the latter not so much).

            I think if there’s substitution, it will be from riverfront/North Loop to Linden Hills, or Lowertown/Linden Hills, or plush burb/Linden Hills. Great for the tax base, I admit, but I suspect if anything will only lead to more large houses, as land costs will continue to rise and demand bigger structures, including homes, to justify the expense.

    • Adam Miller
      Adam Miller January 12, 2015 at 3:44 pm #

      If the Linden Crossing website is right, they have sold 9 of 19 units, I think: http://www.lindencrossing.com/

      Or at least scrolling your mouse over 9 of the floor plans sparks a “sold” banner.

      As to whether it’s all about the zoning (or the height regard Frank/Lyn), I’m sure lots of people say that, and may even believe it, but I’d wager some of them would find other reasons to be opposed if they needed them.

      • David Brauer January 12, 2015 at 4:31 pm #

        Well, considering I’ve held hands with some of em in their lengthy efforts, I can at least say some were fine with 3 stories.

    • Matt Brillhart January 12, 2015 at 3:49 pm #

      David, I think your 2nd paragraph is probably accurate, or at least plausible, but I disagree with paragraphs 1 and 3.

      1. Zoning code is not carved on stone tablet. Yes. we’re dealing with a pretty rigid and unwieldy instrument here, but the code as written is not meant to be the final answer on everything. Requesting variances is not the same thing as breaking the law. Conditional Use Permits and the variance process exist for good reason, and the Planning Commission and City Council voted on all of these requests, following a *very* public process. No wrongdoing occurred here. “We’re fine with the existing zoning” seems to gaining popularity as a counter-argument by those who don’t fully understand zoning. I’m not saying you don’t, but the average resident at a public meeting does not. Some of this stuff takes a while to fully understand (see “unwieldy”); that’s why people go to school for it and are paid professionally to understand it. The zoning code and the nuance of its implementation are really not meant for immediate public consumption. (Again, I’m not suggesting you don’t get it. In fact, I suspect that you do, owing to your professional background)

      3. I’m not sure why you’d say that Linden Corner/Crossing/whatever isn’t a great place for increased density. It’s a (closed) BBQ shack and a parking lot, at a commercial intersection with a fairly frequent bus line, and will compliment what’s already there. What would you instead put at that corner?

      • David Brauer January 12, 2015 at 4:38 pm #

        Matt, in saying it’s not a great development area, I’m not saying it isn’t appropriate for higher density. But I think the existing code (varied or not) reflects that it’s not the same as, say, the Greenway or Hiawatha or North Loop, or even the area at the top of the hill. which are much more optimized for height.

        Again, to reiterate my point, I’m not saying it isn’t appropriate for multi-unit or multi-story. I don’t think it’s great for the kind of density that advocates seem to feel it is.

        It’s not all or nothing here. That’s not what I’m arguing, though advocates seem to keep hearing that. I regard it as one reason why this debate gets bogged down.

        • mplsjaromir January 13, 2015 at 8:57 am #

          There is always a more appropriate place for development, there is always a better smaller development.

          Give a NIMBY an inch they take a mile. The self-perceived preciousness of the Southwest Minneapolis is nauseating.

          • David Brauer January 13, 2015 at 9:02 am #

            Another good example of not listening to what’s actually being said. My argument here is that it’s fine for a certain scale of development – quite a bit more intense than what’s there – not just everything the ideologues want. Who exactly is being precious?

      • Wayne January 13, 2015 at 4:47 pm #

        Seriously, regarding #1, how many construction projects of any sort (in the city) are even built straight to zoning code without some kind of variance or CUP? I feel like the overly restrictive zoning codes are intended as a bargaining chip for the city to steer development in a better direction as part of a give-and-take process with developers that has more granularity than a rule book would allow. It’s not quite form-based planning, but it has its advantages at times. People who insist on slavish adherence to zoning are basically begging to get it changed to something far more permissive if they use it to block every project that comes up, which would be like one of those clichés about harming yourself to spite someone.

  11. Doug Trumm
    Doug Trumm January 13, 2015 at 7:09 pm #

    Gentrification seems to have become such a generalized term that it now just stands in for “any type of development I don’t like.” Replacing a Famous Dave’s is not gentrification. If we going to attach a fancy term to it I’d vote for de-barbequification.

    Obviously there are some losers in the real estate rush on Linden Hills and I do feel bad for the middle class folks who are slowly getting priced out. But I don’t this process is nearly as disruptive as gentrification of a lower class neighborhood.

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