What happened when Minneapolis ended zoning of single-family homes

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In December 2018, the Minneapolis City Council approved a new long-term housing plan called Minneapolis 2040, which, among other things, marked the end of single-family housing in the city. That means on the roughly 70% of the city’s land, where only detached single-family homes were allowed, as of January 2020, owners could build semi-detached or triple-family homes, or reconfigure and expand existing homes to add one or two dwelling units.

This change and subsequent similar moves — and failed attempts — in other cities, counties, and states drew a lot of attention. Some hailed this as a landmark move to make housing more affordable and end residential segregation. Others lamented it as the end of the American way.

Both sides may have exaggerated a little. Here’s what’s happened to duplex and triplex construction in parts of Minneapolis previously restricted to single-family homes since the new rules went into effect.

Minneapolis had a population of 425,336 as of mid-2021, the Census Bureau estimates, and 199,143 housing units as of April 2020. By my count, the end of single-family home zoning has allowed the approval of at most 97 new units (those above) so far Table shows number of buildings, not the units), some of which have not yet been built. If things continue at this rate, the end of single-family housing will have increased the city’s housing supply by just 1% by 2040.

Luckily, there are other types of housing in Minneapolis, where new housing units were built in the 2010s more than twice as much as in the 2000s (down 34% nationally) and after a slump in late 2020 and early 2021 permits are on their way brisk pace returned in the late 2010s.

As can be seen from the graph, almost all of these apartments are in buildings with five or more units. Spend some time in Minneapolis, as I did last week, and it’s apparent that most of them are well over five units — among the five-unit buildings allowed so far this year is 11 the average size 75 units. Apartment buildings have sprung up in business districts and thoroughfares throughout the city, mostly of the boxy, three- to six-story, timber-framed type that has transformed nearly every American city in the past decade. Closer to downtown, where the city requires new buildings to be at least 10 stories tall, they are taller and not made of wood.

For a city hemmed in by suburbs and with little vacant land other than parks, Minneapolis has been fairly successful at adding housing. For example, the 2,317 new housing units approved in the city in the first half of the year were more than those in Northern California’s trio of San Jose, San Francisco and Oakland combined. It’s a lot fewer than Austin, Texas’ 11,996 new units, Seattle’s 5,542, or Denver’s 4,707, but among Midwestern cities, Minneapolis ranks a solid fourth behind a much larger city (Chicago) and two (Sioux Falls , South Dakota and Omaha, Nebraska) that still have a significant amount of undeveloped land within or adjacent to the city limits.

As noted, Minneapolis was building at a similar pace before Minneapolis went into effect in 2040 — and the plan’s most prominent element, the end of single-family zoning, accounts for only about 1% of new units allowed since January 2020. A Federal Reserve tracker Bank of Minneapolis, which compares city housing production to a “synthetic control” based on other major cities, finds that multifamily permits did indeed lag control over the past year, albeit not by a statistically significant amount.

So the plan doesn’t revolutionize housing in Minneapolis, but that wasn’t really the intention. “It’s a mild land-use plan that acquired tremendous emotional significance largely because the general land-use discussion in the country was so ossified,” wrote urban planner Alex Schieferdecker (who was also the first to note that Minneapolis was San Jose, San Francisco, and Oakland in housing this year) in a review published in June. “It is a pioneering document at a time when these are remarkably rare and the crises we face together seem so immediate.”

It is also about more than just the abolition of single-family homes. Minimum parking — requirements that developers must provide a certain number of off-street parking spaces for each unit — fell by the wayside in May 2021, and there are signs that this is encouraging construction of more buildings in the 10- to 50-unit range , which in the first year after the conversion had a median of only about a quarter of parking space per unit, significantly less than larger buildings. Jason Wittenberg, a planning manager in the city’s Department of Community Planning and Economic Development, who provided me with the city data cited here, said that one of the most important changes is still underway: the codification of the city’s already extensive efforts at denser development to promote. Multi-family dwellings longer than four stories outside of downtown, which have historically required (and often received) negotiated height increases and zoning deviations, will be specifically permitted under the new zoning code in transit and commercial corridors, “increasing the level of predictability in development,” he said Wittenberg. “If you bring a project into town that meets accepted standards, we try to create a high probability that you can get away with planning permission.”

Unpredictability in US housing development is often the result of legal challenges to new construction, and implementation of Minneapolis 2040 was briefly delayed by a judge’s ruling this summer in a lawsuit filed by the Minneapolis section of the National Audubon Society and two Local anti-development groups have faltered. The judge then got things going again, but the litigation remains a shadow over the plan. Another cloud is the turmoil and increased violent crime that Minneapolis has seen since the May 2020 killing of George Floyd by Police Officer Derek Chauvin, which likely, along with the pandemic, played a role in the large drop in new permits in late 2020 and early 2020 has 2021.

While Minneapolis is a haven of housing affordability from a coastal perspective, with an average rent for a one-bedroom apartment in July of just $1,002 according to Apartment List and a 2.6% decline in rents overall since March 2020, there are wide economic disparities , mostly by race, mean many Minneapolis residents fear new developments will crowd them out. In neighboring St. Paul, voters in November approved a rent cap that applies to both new construction and existing rentals, prompting the number of new housing units approved in the first half of this year to fall to 342 from 1,633 in the same period in 2021 — no great result for housing affordability. Minneapolis residents also voted in favor of rent regulation in November, but the voting measure they approved only gave the city council the power to enact controls, which it has yet to do. The council, in conjunction with Minneapolis 2040, approved zoning requirements that require developers of larger buildings to either provide some units for lower-income tenants or make replacement payments or land donations to the city, an approach that simultaneously reduces the number of Increases Apartments that are explicitly labeled as affordable can reduce the supply and increase the overall price of accommodation.

In other words, there’s a lot going on in Minneapolis beyond the end of single-family housing development. Nonetheless, the departure from this is significant. Only in the US is the detached single family home “considered so inconsistent with all other types of urbanization that it warrants a legally defined district of its own, a district in which all other large land uses and building types are prohibited,” Sonia Hirt, professor of landscape architecture and Planning at the University of Georgia, wrote in her 2014 book Zoned in the USA: “I understand the appeal of quiet, leafy neighborhoods, but from Europe and some older US cities it’s clear that these can be perfectly compatible with and even enhanced by well designed commercial and apartment buildings.

Last Wednesday I rode around Minneapolis on a bunch of bike-share bikes (one of which is pictured above in the Bloomberg.com version of this column) to check out some of the new Duplex and Triplex models . It took me a map and chart of the city to find it as I came across large apartment buildings along major thoroughfares and the Midtown Greenway without even trying.

Smaller apartment buildings are what has become known as the “missing middle,” once a significant part of the country’s housing mix and now a tiny fraction of new construction. In the end, all I saw was one new triplex in a neighborhood that already had a lot of apartment buildings, albeit on a block that was maxed out for duplexes before 2020. The several new semi-detached homes I found blended in fairly well with their single-family neighbors — more so than a few expensive-looking new single-family homes I’ve come across. With street bars and back alleys full of garages that are the norm in residential Minneapolis areas, there didn’t seem to be any significant parking issues (though I’m sure there have been complaints). In the Como area near the University of Minnesota, where semi-detached houses were already allowed on some apartment blocks before 2020, so many new ones are being built that one can perhaps speak of a neighborhood in transition. Elsewhere, they’re sparsely distributed, giving a few more people access to backyards and quiet, leafy, walkable neighborhoods in a city that’s among the nation’s most livable, at least in the summer. That’s a victory, even if it’s not a revolution.

More from other authors at Bloomberg Opinion:

• Will house prices just flatten out – or collapse?: Jonathan Levin

• The Fed’s damage to the housing market in May in recent years: Allison Schrager

• US must bribe homeowners to adopt density: Eduardo Porter

This column does not necessarily represent the opinion of the editors or of Bloomberg LP and its owners.

Justin Fox is a Bloomberg Opinion columnist covering companies. A former executive editor of Harvard Business Review, he has written for Time, Fortune, and American Banker. He is the author of The Myth of the Rational Market.

For more stories like this, visit bloomberg.com/opinion

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