Housing Unit Production

• 2000 Baseline: 1,047,240 housing units
• 2030 Target: 1,537,000 housing units

Over the period from 2000 to 2030, annual housing production will need to keep pace with the region’s forecasted growth.  Growth rates are expected to slow in subsequent decades.  In the current decade, 18,000 units per year should accommodate growth; in the third decade of the century, 16,000 units per year should be sufficient. 

The region has experienced robust housing production activity. In the first half of this decade, housing stock gains surpassed the annual benchmark, reaching a peak with 2004’s units permitted and 2004-05 net change.  More recently, with tightening credit, rising vacancy rates, and increasing inventories of unsold new homes, the pace of construction has slowed.  Net growth in housing units fell to 16,737 in 2006 and, as national housing market conditions deteriorated, dropped to 11,714 in 2007.  On average, 17,206 housing units were added annually over the period; well within the target range. 

Net growth statistics reflect estimated completions of the previous year’s permitted units, conversions of non-residential structures into housing, as well as housing demolitions.

Source:  Metropolitan Council Research

Housing Unit Location - 2030 Growth Targets

• Developed Area:  133,000 units net growth, 2000-30
• Developing Area:  285,000 units net growth, 2000-30
• Rural Centers: 27,000 units of net growth, 2000-30
• Remaining Rural Area: no more than 40,000 units net growth, 2000-30

Regional housing production has been higher than targeted.  The geographic distribution of housing development is in line with benchmark expectations:  the central cities and developed suburbs accounted for 30 percent of the region’s net housing growth in 2001-2007; the developing suburbs, 60 percent, and the rural centers and remaining rural area, 5 percent each.

The recent slowdown in housing growth has led to some redistribution of net growth by location with an increasing share of net growth in the developed area relative to the developing area.  In 2001, 67 percent of net growth was in the developing area compared to 22 percent in the developed area; by 2007, 36 percent of net growth was in the developed area compared to 54 percent in the developing area. 

Source:  Metropolitan Council Research

Regional Employment Growth

• 2000 Baseline: 1,607,916 jobs
• 2030 Target: 2,126,000 jobs

The Twin Cities region lost a noticeable share of employment in the last economic downturn and has since recouped the loss and resumed growth.  While the seven-county area added over 27,000 jobs in 2006, helping the region return to pre-recession employment levels, 2007 was a weaker year with fewer than 5,000 jobs added.

Over the 2000 to 2007 period, the Minneapolis-St. Paul metropolitan statistical area (MSA) ranked 14th in its employment growth rate among the 25 largest U.S. metropolitan areas. 

Sources:  Quarterly Census of Employment and Wages, Minnesota Department of Employment and Economic Development; Current Employment Statistics, Bureau of Labor Statistics, U.S. Department of Labor

Employment Distribution—2030 Growth Targets:

• Developed Area: 286,561 jobs
• Developing Area: 215,712 jobs
• Rural Growth Centers: 7,443 jobs
• Remaining Rural Area: 11,579 jobs

Employment declines during the economic downturn this decade were deepest in the region’s developed core. Many of the developed communities have now added back jobs to their previous peak level, or nearly so.  However, in 2007 the developed core combined total still lagged behind its 2000 level by 3.3 percent.   Meanwhile, many developing communities experienced continuous job growth.  Rural area employment levels advanced moderately -- in line with the amount of growth forecasted for these areas.

Source:  Metropolitan Council Research analysis of Quarterly Census of Employment and Wages, Minnesota Department of Employment and Economic Development