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How Minneapolis Is Growing As Chicago Shrinks

The Twin Cities area is building connections, both transit and political, between its municipalities while sharing the financial burden. And it’s reaping the benefits.

The Twin Cities’ new Green Line light rail links the downtowns of Minneapolis and Saint Paul for the first time since the 1950s.   Photo: Mary Bergin/Chicago Tribune

During the most recent winter of our discontent, a blog post made the rounds (and the news) for saying what we’re not supposed to say, that we’d all just as soon live somewhere warmer, and that’s a main reason why the author’s friends were leaving.

It’s one advantage the Sun Belt has over the Rust Belt. The former also developed later—in part because it took until the advent of air conditioning to cancel out its own temperature issues—so the South has been pulling people and jobs away from the North for years.

So how do you explain Minneapolis?

“Minneapolis just seems to be growing like crazy,” says Chrissy Mancini Nichols, director of research and evaluation for the Metropolitan Planning Council. After the numbers caught her by surprise, she’s been studying and writing about what’s going on in the Twin Cities metro area. “Last year [the Minneapolis metro] grew by one percent, or 33,000 people. The Chicago region grew by 9,000. It’s not just a percentage; in terms of the raw numbers, they’re growing by leaps and bounds over Chicago.”

That growth is happening in Minneapolis and St. Paul, but also in those cities’ edge suburbs. At this rate, the metro area as a whole could add half a million people by 2030.

Instead of competing on taxes, suburbs collaborate

One way the metro area is growing is that it’s working together as a metropolitan area, rather than a bunch of cities and towns fighting to move jobs a few miles here or there. Mancini Nichols cites a 40-year-old law called the Fiscal Disparities Act, which is a bit like a TIF district, or maybe its opposite. “The program puts 40 percent of the growth in the commercial-industrial tax base in each municipality annually into a seven-county regional pool and then distributes those funds back to participating municipalities and school districts based on tax base and population,” Mancini Nichols writes.

So everyone benefits, at least somewhat, from growth across the region, which also means that poorer municipalities have support beyond their own low tax bases. In and around Chicago, for instance, the effective residential property tax rates in the struggling municipalities of Harvey and Chicago Heights were 8.87 percent and 5.58 percent as of 2012; their commercial rates were 15.1 and 11.3 percent. Barrington’s rates, meanwhile, were 2.03 percent and 4.63 percent; in Glenview, 2.03 and 4.64. With less wealth to draw from, poor municipalities have to raise taxes, an impediment to growth that would lower them.

“They realized that inefficient competition—there’s no benefit,” Mancini Nichols says. “A suburb taking jobs from another suburb, or the city taking jobs from a suburb, what’s the net growth from that? There’s really none. And Minneapolis wanted to keep property taxes level for the entire region. They implemented this law in the ’70s, and it’s one of the few places in the country that has this type of program in effect. It seems to be working…. They’ve managed to reduce the gap in the property tax base between the richest and poorest municipalities in the region.

“In Chicago, our gap is one of the highest in the nation between our effective tax rates on property and the disparity between the richest and the poorest places. That really does inhibit development in a low-property-tax-wealth community, because your tax rates and effective property tax rates are going to be high. Minneapolis wanted to just eliminate that. At the time, they came together as a region to do that. It seems to me that mayors and leaders across Minneapolis, even those that do pay into the system, like it because they’re not worried about their neighbor poaching their jobs; they can focus on actual growth instead of, say, Naperville coming in and offering a tax incentive.”

Better bus transit means shorter commutes

And the city has worked to connect these municipalities as well, through policies and infrastructure that have been slower to arrive in the Chicago area. R.T. Rybak, Minneapolis’s mayor from 2002 to 2014, made it a goal to increase the city’s population growth without increasing the number of cars in the city—a goal also dependent on regional cooperation.

“They have much better commute times than the Chicago region—it’s up to an extra day a month that they gain by not sitting in traffic than Chicago,” Mancini Nichols says. “They’ve implemented many things to reduce their commute over time. They were part of a federal pilot that allowed congestion pricing on existing highways; they implemented it on I-394. And they didn’t just say, we’re going to have a toll lane and you can have the benefits of paying more and getting to where you’re going faster; they paired it with bus rapid transit. They invested a lot in their bus system.”

Bus ridership has been increasing in Minneapolis; in Chicago, it fell eight percent last year, which the Tribune’s Jon Hilkevitch attributes to “better service reliability on trains compared to buses, which are frequently stuck in heavy traffic.” Bus rapid transit is supposed to mitigate that, but it’s been a tough sell in Chicago.

Meanwhile, the combination of congestion pricing and bus rapid transit in Minneapolis was so successful, Mancini Nichols says, that "they applied to continue the project on I-35, and were able to do it there. They implemented full bus rapid transit that went from the suburbs to downtown, and they’ve seen bus ridership grow extensively. They’ve been heavily investing in new rail. They’re also investing more in their bus system, adding more off-peak hours, more express buses. While Chicago lost ridership on our bus lines, their bus ridership is growing.”

Besides speed, the other element of public transportation is proximity, and the region is pushing high-density residential development along transit lines, with a high percentage of affordable housing.

“In Minneapolis, their metropolitan council, just from January 11 through December 13 of last year, financed seven [transit-oriented] developments, and that created almost 700 units of housing; almost 75 percent of those were affordable,” Mancini Nichols says. “In the city of Chicago and in the region, we haven’t taken an active approach at doing that. Either some of the highest [priced] real estate is next to transit, or it’s in areas where they may have good transit access, but the adjacent neighborhood isn’t attractive for developers.”

Recently Minneapolis and St. Paul were connected by a rail line for the first time in six decades. Along that line will be several mixed-income housing developments. Connecting the two cities is part of a whole: the region is working together politically and physically, rather than battling each other for the pieces.


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