Here’s Some Research Backing Up Minneapolis 2040

It's fine. Doesn't it look just fine?

A small six-unit apartment building under construction in Longfellow, minding its own business.

Some Minneapolis 2040 detractors have complained that no evidence has been offered that building more housing where people want to live (i.e. “density”) is good. “I just don’t see it as a way that we would get a measurable impact, and especially from an affordability standpoint,” Ward 13 Council Member Linea Palmisano told the Star Tribune. Another elected official recently wrote in a forum that easing density restrictions is racist and will “reduce the availability of affordable homes.” I’ve heard similar comments from planning commissioners and land-use lawyers.

Is this true? Will the Minneapolis 2040 plan actually undermine its stated goals, and harm people of color and increase the cost of housing? What do the experts say? Well, I have a Hennepin County Public Library Card and a Chromebook, so I thought I would spend an afternoon poking around the staggering expanse of human knowledge I have access to. Here’s what I read:

  • The Economic Implications of Housing Supply by Edward Glaeser and Joseph Gyourko. The National Bureau of Economic Research, 2017.
    • Quote: “The available evidence suggests, but does not definitively prove, that the implicit tax on development created by housing regulations is higher in many areas than any reasonable negative externalities associated with new construction. Consequently, there would appear to be welfare gains from reducing these restrictions.”
    • Upshot: restricting housing supply makes housing more expensive.
  • The Long-Term Dynamics of Affordable Rental Housing: Creating and Using a New Database by John C. Weicher, Frederick J. Eggers and Fouad Moumen. Cityscape, 2018.
    • Quote: “The net increase [in the stock of affordable housing stock] from filtering is nearly twice as important as the net increase from tenure shifts, and far more important than the net increase from new construction and demolitions (and other sources of additions or removals).”
    • Upshot: the country’s primary source of housing that is affordable to people with low incomes is housing that was occupied by people with higher incomes 20 or 30 years ago.
  • Perspectives on Helping Low-Income Californians Afford Housing by Mac Taylor. California Legislative Analyst’s Office, 2016.
    • Quote: “construction of market-rate housing reduces housing costs for low-income households and, consequently, helps to mitigate displacement in many cases… [D]isplacement was more than twice as likely in low-income census tracts with little market-rate housing construction… than in low-income census tracts with high construction levels.”
    • Upshot: high-demand neighborhoods that build housing have less displacement than high-demand neighborhoods that don’t build housing.
  • The Effect of Density Zoning on Racial Segregation in U.S. Urban Areas (PDF) by Jonathan Rothwell and Douglas Massey. Urban Affairs Review, 2009.
    • Quote: “[D]ensity zoning appears to have a strong influence on the pace of racial desegregation in U.S. metropolitan areas from 1980 to 2000. The larger the density score—the more liberal the zoning policy—the larger the percentage decline in Black–White dissimilarity and Black spatial isolation.” (Jargon note: “dissimilarity” and “isolation” are two ways of quantifying levels of how segregated groups are.)
    • Upshot: areas with less restrictive zoning are less segregated by race.
  • Do Strict Land Use Regulations Make Metropolitan Areas More Segregated by Income? by Michael Lens and Paavo Monkkonen. Journal of the American Planning Association, 2016.
    • Quote: “[D]ensity restrictions are associated with the segregation of the wealthy and middle income, but not the poor. We also find that more local pressure to regulate land use is linked to higher rates of income segregation, but that more state control is connected to lower income segregation.
    • Upshot: areas with less restrictive zoning are less segregated by income.
  • The [Obama] White House Housing Development Toolkit, 2016.
    • Quote: “The growing severity of undersupplied housing markets is jeopardizing housing affordability for working families, increasing income inequality by reducing less-skilled workers’ access to high-wage labor markets, and stifling GDP growth by driving labor migration away from the most productive regions.”
    • Upshot: outdated density restrictions hurt working people by making housing more expensive in cities with lots of high-paying jobs.

The general conclusion that was reinforced for me is that building more housing is good and it would make many people’s lives better. I want Minneapolis to be a more affordable and less segregated city, and it looks like the policies in Minneapolis 2040 are the way to get there. Let me know if there were any studies or papers I missed.

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10 Responses to Here’s Some Research Backing Up Minneapolis 2040

  1. Mike Sonn
    Mike Sonn November 19, 2018 at 2:52 pm #

    Thank you, Scott. I wish I had this during the Marshall Ave discussions but I’ll be referring to this during the St Paul 2040 process.

  2. Scott Shaffer
    Scott Shaffer November 19, 2018 at 5:03 pm #

    I should also mention that there’s a great working paper hot off the presses titled “Supply Skepticism: Housing Supply and Affordability” by Vicki Been, Ingrid Gould Ellen, and Katherine O’Regan from NYU. I didn’t include it in the blog post because it didn’t have original empirical analysis, but it’s really exceptional. The authors take lefty critiques of YIMBY seriously and their writing is unusually clear and accessible.

    http://furmancenter.org/research/publication/supply-skepticismnbsp-housing-supply-and-affordability

  3. Jeff Hoffmann November 19, 2018 at 11:55 pm #

    I think that there’s probably something to be said for the idea that there will be a reduction of existing stock of “affordable” housing (i.e., the lower end single family houses) but the question I have is are those really good ownership opportunities for lower income individuals? In general, the houses targeted for redevelopment are among the oldest and most rundown, meaning the cost of purchase may be low but the maintenance costs (and utilities, etc.) could be exceedingly high relative to new construction and if they are purchased by lower-income families with less financial security it could result in foreclosures or unmaintained/further degrading houses which negatively impacts everybody involved.

  4. Sarah November 20, 2018 at 1:11 pm #

    Just ran across this one, which looks interesting: Wheeler and Jagorsky, “Race, Land Use Regulation, and Housing Affordability.” https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3199298

    • Scott Shaffer
      Scott Shaffer November 21, 2018 at 9:38 am #

      “We find that mobile home bans have powerful and consistent effects on owner affordability. Affordability for African Americans is especially harmed by multi-family development limits and for Hispanics by restrictions on the pace of housing construction.”

      Wow, this is great! I’m bookmarking this one

  5. Marshall November 20, 2018 at 2:59 pm #

    It is baffling to me that people believe that an increase amount of housing units would not have a long term impact in the affordability of housing? Obviously, the city council instituting the Tri-Plex (or previously the Four-Plex) policy will not lead to lower prices overnight, but increasing available housing units, whether it is for rent or ownership, in places where people already want to live seems like a way to at least slow the increases in housing costs, and if implemented effectively, potentially do even more.

    • Rosa November 24, 2018 at 11:39 pm #

      the critique seems to be that it won’t have enough impact, not that it will have none.

      Which is true, we need to do other things also. But it’s not like anyone’s saying “don’t upzone, here is a billion extra dollars for public affordable housing instead!”

      • Bill Lindeke
        Bill Lindeke November 25, 2018 at 10:40 am #

        Yeah this is a good start. I am skeptical the triplex provision will make much difference, TBH, but it’s not a bad idea and might have marginal housing benefits. At least it would bring lots of existing housing into compliance with zoning.

  6. Bruce Brunner
    Bruce Brunner December 3, 2018 at 11:39 am #

    Bill, the legalizing of newly built duplexes and triplexes may not have a huge effect but it will start adding housing as people are already starting to build triplexes. It will also allow some SFH to be legally converted to duplexes.

    I think a bigger impact will be when non owner occupied ADU’s get legalized. There are over 23,000 duplex/triplexes and over 12,000 SFH rentals in Minneapolis. That is a lot of possible incremental housing options for an ADU. These can be added at lower costs as compared with tearing down/ rebuilding since there is no land/acquisition costs and utilities are already on site for connection. Now we just have to get the SAC/Park fee waived to make them even more affordable.

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