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 it 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 lower courts until they somehow persuaded the Minnesota Supreme Court 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 (especially those not actually living in or closely watching the Twin Cities) 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: 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 start for this type of housing. In the first third of the year,  two duplexes, three triplexes, and three 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 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 Sun Belt 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 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. This 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 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 bold heroes and heartless 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 those are remarkably rare and the crises that we collectively face seem so immediate.

There have been real, tangible 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 in approved projects has hit the lowest point since I started keeping track, and probably since parking minimums were first imposed.

But I think the plan’s two biggest consequences may be much harder to measure. 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

June 24, 2022: this article has been updated with small wording and phrasing changes to improve clarity and accuracy. Readers are welcome to view prior versions at the Wayback Machine.

June 21, 2022: this article has been updated to correct an error in the number of construction starts on fourplexes in Minneapolis in the first third of 2022, from two to three.

13 thoughts on “The reality and myth of the Minneapolis 2040 plan

  1. Sheldon Gitis

    “Alex Schieferdecker is from New York City, lived in Minnesota for six years, and now lives in Philadelphia. He is still unhealthily invested in Twin Cities politics and development. Please help. ”

    Please help what?

    “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.”

    As if the coalition of density fetish-er “urbanists” isn’t a front for AECOM and other corporate welfare addicted real estate development interests.

    Jane Jacobs must be rolling over in her grave every time Alex Schieferdecker pens another piece.

    1. Al

      What? You have deeply misunderstood what Jane Jacobs stood for if you think she’d be opposed to increased density. Her whole thing was “eyes on the street” to create safe cities with diverse, thriving communities and people-oriented streets, and you need density to help make that happen.

      1. Sheldon Gitis

        Jane Jacobs claim to fame, or at least its origins, was an opposition to a Robert Moses planned “expressway” bulldozed through Manhattan, precisely the sort of AECOM “density” project for which Alex Schieferdecker is a shill. The last thing cities need to make streets safer and more oriented to people rather than cars is another AECOM concrete project.

        1. Alex SchieferdeckerAlex Schieferdecker Post author

          Sheldon, thanks for reading and taking the time to comment.

          The proposed LOMEX project that occasioned the fight between Robert Moses and Jane Jacobs was about whether thousands of homes should be torn down for a highway that would’ve served residents of far-flung Long Island communities. In other words, Robert Moses proposed to destroy dense neighborhoods to privilege a low-density lifestyle. Jane Jacobs fought to preserve the existing density and wrote eloquently about its benefits. I’m afraid to say that you’ve got the parable exactly backwards.

          As for my employer, wow I would love to have a say in what types of projects the company pursues. Unfortunately for me, I’m an early career planner with absolutely no say in the kind of work that comes across my desk. The idea that AECOM has decided to use a junior employee in a different city to write articles on a hyper-local blog as a kind of reverse bankshot marketing strategy is one of the most imaginative conspiracy theories I’ve seen in a while. Regrettably, I have to inform you that it is completely false.

          1. Sheldon Gitis

            Fun fact about Robert Moses, he never got a driver’s license. As far a motives are concerned, I doubt he had any idyllic view of driving to and from the downtown office. I suspect he just enjoyed getting and spending enormous amounts of the proverbial “roads and bridges” money building monumental concrete projects.

            While it may seem counter-intuitive to suggest a similarity between Moses’ Manhattan Expressway and AECOM’s Central Corridor Project in terms of density, in terms of planning and finance, the projects are practically identical. The Central Corridor Project, for which AECOM supplied the bulk of the paperwork, was classic Robert Moses. Appointed public officials formed a coalition of banks, insurance companies, government agencies and other business interests to get and spend a very large sum of Federal Highway Department dollars. Obviously, the one big difference is Moses’ Manhattan Expressway fortunately wasn’t built, and AECOM’s Central Corridor Project, unfortunately, was.

            I’m confused Alex. As a Junior Planner at AECOM, you say you are given assignments not of your choice. So what? Who asked you whether or not you get to choose your assigned work? Maybe you should write something about your Junior Planner job. If it doesn’t involve strategic communications, what does it involve?

            Call it “conspiracy theory” if you like, Alex, but it is not far-fetched to suggest AECOM would target its strategic communications toward an academic, government agency oriented blog like StreetsMN. AECOM has raked in an obscene amount of “hyper-local” money just to complete a couple federal grant applications for the Central Corridor Project and the SWLRT.

    2. Adam MillerAdam Miller

      “As if the coalition of density fetish-er “urbanists” isn’t a front for AECOM and other corporate welfare addicted real estate development interests.”

      It really is not.

      1. Sheldon Gitis

        Apparently we agree, there really is a coalition of density fetish-ers who have glommed onto the “urbanist” label. Among-st that group, I think it’s safe to say there are some subgroups that are fronts for business and government interests seeking to get and spend lots of money on the sort of concrete projects that AECOM specializes in.

  2. Zak Yudhishthu

    For purely intellectual reasons, it’s too bad that the judge’s pause on the 2040 Plan happened at the same time as big increases in interest rates. A sudden pause like this could make for an interesting natural experiment that would further inform us about the effect of these zoning changes, but instead we have the huge confounding variable of quickly changing macro conditions.

  3. Mike

    The other benefit to 2040 worth mentioning is that the types of projects that may in the past required tortured variances or CUP and generated routine litigation from neighbors shoudl be easier to advance, especially once the zoning comes into match the comp plan. This is especially true now that the city has put more detail around max transit corridor height vs the vauge unbounded “or higher, if advances comp plan goals” that was in the 2040 plan as approved.

    Also on the triplex issue people tend to always to go the teardown/replace with a new 3 family building, where the other benefit is to simplify the process to retrofit large single family homes into legal duplexes or triplexes by right vs another painful exception process. I agree with the pieces opening premise that for every fearful red sign bulldozer alarmist there was a economically naive affordable housing activists, both of whom misunderstood the practical plan impact.

  4. Janne Flisrand

    This is a great overview of the complexity of what is and isn’t happening in Minneapolis and why. Thanks for writing it, Alex. I’d like to add my thoughts about one paragraph.

    You wrote, “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.”

    As one of those proponents of the plan, we absolutely expressed support for legalizing 4plexes anywhere, and that’s what the media loved to ask us about most. That said, we also organized hard to get comments supporting the elimination of parking minimums, and to expand corridor zoning further from main streets, and many other less-recognized strategies that would make it easier to build more homes for more neighbors. Because there was essentially no opposition to those changes, and because there was support for them, they weren’t part of the conversation or the post-adoption story.

    I don’t know why triplex zoning was among the first priorities for implementation, I suspect that it was both because it was symbolic, and because it was a simple change, just changing the number of units allowed in R1 zones. It was clear that built form also would need to be changed for it to be feasible, but that more complex change wasn’t made for a year.

    1. Alex SchieferdeckerAlex Schieferdecker Post author

      Good points, especially about the mismatch between the zoning implementation and the lag in built-form to match (and it really still doesn’t support triplexes super well).

  5. Monte Castleman

    I’m not really surprised that there haven’t been a lot of takers. If you’re the type to buy a single family detached house, probably a big factor in buying it is not wanting to have to share your private property with unrelated adults, something that would be negated by building additional official units on your property by rebuilding or converting your house to
    a duplex or triplex or building an ADU. And you’ve always been able to let grandma or adult kids live in your place without going to the work and expensive of creating official additional units.

    1. Alex SchieferdeckerAlex Schieferdecker Post author

      I don’t know Minnesota’s specific history, but it took a US Supreme Court case (Moore vs East Cleveland) to legalize the rights of grandparents to live with grandchildren at a national level. So it’s certainly not the case to say “you’ve always” been able to do that. It took a lot of fighting to get rid of zoning barriers like that!

      It was never likely that ordinary property owners would convert their single-family homes to triplexes in large numbers. But it’s interesting that developers haven’t really stepped into that market in any way. One thing that they might be waiting for: more regulatory certainty that triplexes will be allowed into the future. This lawsuit certainly imperils that.

      There are other barriers as well, and I’m working on a proposal for how that could be addressed! Stay tuned.

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