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Residential housing growth declines in Twin Cities

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Minneapolis construction
An apartment building being built in downtown Minneapolis is one of the few housing projects underway contributing to relatively low numbers in an EPA Smart Growth report that measures residential housing activity in the country's 50 largest metropolitan areas.
MPR Photo/Dan Olson

Rising on Washington Avenue in the heart of downtown Minneapolis, a brand new apartment building is considered "smart growth" in the urban development world. 

The residents will live close to bus and rail, giving them alternatives to always driving their car. 

But the construction of this new residential building is a bit of an anomaly in St. Paul and Minneapolis. A new Environmental Protection Agency report shows the Twin Cities' residential housing market has declined in the last year. 

John Thomas, one of the authors of the EPA's "smart growth update" said that runs counter to what's happening in lots of other cities surveyed.

"In about half the cities the market share of the central cities and the older close in suburbs have doubled," Thomas said.

The decades old trend of building outward continues. Metropolitan Council statistics show that in 2008 more than two-thirds of the region's housing permits were issued in developing suburbs -- places like Eden Prairie and Cottage Grove.

Only 9 percent of the region's new housing permits were issued in the cities of St. Paul and Minneapolis, and only 19 percent in so called developed or close in suburbs -- places like St. Louis Park and Roseville.

A more comprehensive set of Met Council stats show this: From 2000 to 2008 16,915 units were permitted by Minneapolis and St Paul, and a total of 142,986 units in the region.

Rick Packer said the EPA smart growth numbers for Minneapolis and St. Paul don't tell the whole story. Packer is a former Coon Rapids city planner, a former member of the Metropolitan Council and as a businessman he's spent more than 25 years buying land for suburban housing developments.

Packer argues one reason the housing numbers appear to be low is the two cities have managed to avoid the worst ravages of urban blight that hollowed out some other American cities over the past 40 years creating big swatches of land ripe for redevelopment.

"Minneapolis and St. Paul are both pretty healthy cities, there wasn't a crying need for redevelopment and there wasn't a lot of vacant land that could accommodate it either," Packer said.

Lee Munnich, a urban policy analyst for the University of Minnesota, said culture is another reason housing development in Minneapolis and St. Paul is slower than in some other cities.

Munnich remembers during his four years as a Minneapolis City Council member facing strong opposition from neighbors toward new or higher density housing proposals.

"I was involved in this on the Minneapolis City Council, some of the concerns about high rises around the lakes, and having a high rise right next to you, and parking issues and things like that," he said. 

Munnich said residential housing development numbers in some cities are stronger because they acted early to encourage it.

In Portland, for example, the residents decided to impose strict limits on suburban expansion.

In Denver, residents created a local source of funding for transit years before the Twin Cities got around to it.

Packer said the bigger picture painted by the EPA's smart growth numbers should probably be cause for joy among those wanting to rein in sprawl.

The data show that, compared to the early 1990s, the share of construction in urban neighborhoods was up 28 percent in mid-sized metropolitan regions.