Trying to forecast growth in the Twin Cities metro as demographics shift

Talking to a demographer is a lot like talking to a fortune teller: both involve someone who sees the future, but won’t tell it to you in anything but a vague way.

Earlier this fall, the Met Council’s demographic office released its latest population growth projections, which take regional trends and population growth out to the year 2050 in as specific a way as they can. Based on a complicated model, the predictions show relatively slower pace of growth in the Twin Cities metro compared to the previous decade. Likewise, a similar shift is predicted to take place around the distribution of growth, with the percentage of population moving to the urban core declining from the previous high point.

Demography is an inherently big picture enterprise. Instead of focusing on the patterns of one place or group of people — a plot of land, a neighborhood, a family — you zoom way out and think about populations spread out over space and through time. Individuals are anonymized and subsumed into numbers and trends, and things that might seem substantial at the micro level can “wash out” at larger scales.

In that light, regional shifts are part of a bigger picture, says Todd Graham, the principal forecaster at the Met Council. Population trends are tied to economic growth, and the last decade was a boom time throughout much of the metro.

A pivot away from the rapid growth inside the urban core — think Minneapolis, St. Paul and some first-ring suburbs — and out toward the more distant suburban belt represents a shift. The decade of the 2010s had seen a very significant  spike in housing demand in the central cities, where after decades of declining population both Minneapolis and St. Paul were growing again. 

According to Graham, that trend will continue at a relatively diminished pace. The results are more about an evolution and logical progression of the increasing density.

“In the future, all parts of the region are going to have a share of the growth but it’s not going to be as urban as what we saw in the previous decade,” he said. “[There were] historic levels of apartment development, towers were going up not just in Minneapolis but a lot of the first-ring suburbs as well. But the developed core is running out of undeveloped land, or places you could put more apartment towers, so [they will get] only one-third of the growth in the coming decades.”

Urban growth

Zoom out, and the larger story remains one where the housing landscape settles into a pattern. After all, one-third of the regional growth is still a significant portion for the “urban core” when compared to the trends of the late 20th century, a time when city populations were literally shrinking every year. 

“It’s [also] a matter of taste with the pattern really changing every decade,” Graham said. “The most recent decade in the 2010s was the most ‘return to the center’ urbanizing decade that we see in the time series.”

The Met Council model uses what Graham calls a “equilibrium model” that looks at local real estate “location choice” over the last 10 years and extrapolates patterns into the future. It also uses local land use and zoning maps to guess where change might occur at a relatively fine-grained level. The result is a complicated mix of big picture population trends and census-block-level information. 

“[Developers] want to see that the kind of housing succeeds in the community context where they’re putting that housing, [so] there is sort of a snowball effect to this,” Graham said.

Just as financing for housing construction looks for recent “comparable” examples to follow, developers tend to follow along existing trends. It’s relatively rare for projects to buck those patterns, but when they do, things can change more quickly. Those shifting geographic shifting eddies are not something that the Met Council model necessarily can account for, but on the big picture scale, it’s pretty accurate.

For example, the Met Council model predicts that household size will continue to decline as people age — especially seniors — and birth rates level out with families having fewer children compared to the past. But he also sees that key household size number hitting a plateau around 2.4 in 2040, creating a stable floor that will affect larger pollution trends.

At the same time, local detail can get missed by the wide-angle demographic lens. Take Arden Hills, a small Ramsey County suburb north of Roseville. Met Council projections have it growing modestly by about 1,000 people by 2050, alongside similar cities in the region. But that prediction misses the massive opportunity for growth at a large 427-acre site that is currently looking at development proposals that could double the size of the city in 20 years. Those kinds of outliers can be “washed out” by the big-picture model.

(Of course, a lot hinges on how local control may yet affect development plans. The upcoming election might jeopardize again Ramsey County’s efforts to build housing at the site, pointing to the unpredictable nature of large-scale development in the first place.)

Policy choices

The other variable is how local policy affects housing construction in the first place. Theoretically, the Met Council requires all 182 municipalities in the metro area to zone land for new housing demand, places where each city’s “share” of the increasing population might live. In practice, some local governments are better at this than others, and the subtle zoning rules and approval regimes shape how development actually plays out. 

The Minneapolis 2040 comprehensive plan, for example, might change future land use trends to look somewhat different from the past, but not all cities are on board with these kinds of pro-housing policies.

“A city like Minneapolis has tremendous capacity because its land-use policies are very permissive of middle and higher density,” Graham said. “Minneapolis is making deliberate choices about where they will allow high-density apartment buildings.” 

One final question mark is shifting taste in housing, especially cloudy knowledge around how the pandemic is affecting cities. For example, many statistical measures use the year 2020 as a baseline for growth in household size. But that was the year that, due to economic uncertainty and a housing shortage, many younger people moved back in with their parents or never left home, making those numbers an unreliable one-year data point. How to resolve these unpredictable fluctuations remains a challenge going forward.

In the big picture, the Twin Cities is still growing, but seemingly at a slower-than-ideal rate. That makes the real challenge one of attracting newcomers to the region to ensure that the labor supply can meet the demand by local businesses.

At the recent MinnPost Festival, that question was front and center for a panel that included the state demographer, Susan Brower, and folks from the state tourism board and the Center for Economic Inclusion. The discussion focused on bringing people to the state through attractive social policies and savvy marketing. Both will be needed if the labor force is going to keep up with the strong regional economy and unprecedented lows in the state’s unemployment rate.

The Met Council has already received feedback from the public and local governments about its projections and is reviewing those comments to make small-scale corrections. The next step is taking these top-line demographic predictions and using them to shape city plans. 

As cities start planning for 2050, they’ll have to include some room for growth that’s evenly distributed. If it seems too soon, like the 2040 plans have just settled onto the regulatory and zoning landscape, you’re right. But the work of comprehensive planning is never really done, it just repeats itself again and again, moving like a horizon into the future.

Bill Lindeke

Bill Lindeke is a lecturer in Urban Studies at the University of Minnesota’s Department of Geography, Environment and Society. He is the author of multiple books on Twin Cities culture and history, most recently St. Paul: an Urban Biography. Follow Bill on Twitter: @BillLindeke.

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