Fuel costs take toll on outer-tier suburbs

East Bethel's population has grown more than 20 percent since 2000, but that spurt apparently has run out of gas. And that's fuel for thought for those paying attention to the pumps, East Bethel's finance director says.

It's the price of fuel and commuting, and not just the housing market, that's choking the Twin Cities' outer-tier suburbs, East Bethel finance director Bob Sundberg said recently. Unpredictable gas prices and unforgiving stop-and-go roadways have kept potential commuters from moving farther away from Minneapolis and St. Paul, he said.

Officials from other suburbs blame the housing market, and representatives from Realtors associations throughout the metro area say they have not heard of gas prices hurting the housing market.

Nevertheless, officials at the Metropolitan Council have seen evidence that rising gas prices are influencing people's behavior, including increased use of transit and park-and-ride lots.

So it follows that high prices at the pump could also affect potential buyers' decisions of where to purchase homes, spokeswoman Bonnie Kollodge said.

East Bethel is 35 miles north of Minneapolis. With no supermarkets, major industry or other amenities that more established suburbs have to offer, residents of East Bethel must drive to Blaine or Cambridge to do their grocery shopping, Sundberg said.

That could change if East Bethel maintained its recent population expansion -- from just under 11,000 in 2000 to 13,500 today. But the growth has slowed, leaving East Bethel's potential development hanging at the gas pumps.

"We're geared up for fast growth, but right now we have empty lots instead of new homes, and the price of gas has a lot to do with it."

Catching a ride

In the city of Ramsey, in Anoka County, an increasing number of commuters are willing to pay $9 per day -- or nearly $200 per month -- to take the Ramsey Star Express commuter coach to Minneapolis, rather than fight traffic and pay high gas prices and $200 monthly parking fees, said Diana Lund, Ramsey's city financial director. The bus service began in January, and ridership has tripled over the past 10 months, city officials say.

Further north, in the city of Isanti, where commuters must drive in stop-and-go traffic on Hwy. 65 before completing their 40-plus-mile commute to Minneapolis, "we have a lot of the same concerns about the price of gas," said Carla Vita, Isanti community development director.

Vita notes that gas prices are also responsible for higher grocery costs, but says it's impossible not to talk about the problematic housing market when discussing the growing pains some suburbs are feeling.

Elk River planning manager Jeremy Barnhart was also hesitant to blame higher gas prices for temporarily lowering cities' expectations about bringing in new residents.

"If that were the case, every city would be affected, whether that city was 20 miles or 50 miles from Minneapolis," said Barnhart. "I just don't see it happening that way."

Neither does Ron Covert, CEO of the Southern Twin Cities Association of Realtors. Nor does Patrick Ruble, a official with the St. Paul Area Association of Realtors. "For everyone, gas prices and transportation are issues," Ruble said. "But I have not heard one Realtor tell me they were having problems selling houses because of gas prices."

But in East Bethel gas prices have been a major concern of potential home owners for two years, one developer said.

Brian Mundle, whose BDM Construction company is based in East Bethel, said he'll often take interested browsers through model homes and often is told, "I wish this was 10 miles closer [to Minneapolis or St. Paul]."

St. Michael -- 35 miles west of Minneapolis in Wright County -- has been growing steadily for a decade, more than doubling from 7,000 in 1996 to 15,000 today. St. Michael has benefited, in part, from the outlet mall in neighboring Albertville.

Bob Derus, St. Michael's city administrator, blames stunted suburban growth on the overall housing economy "and the mortgage mess."

"This area, along [Interstate] 94 is a real strong growth corridor -- if we can take care of the traffic congestion," he said. "Gas prices haven't helped.

"Many of the breadwinners in our city commute to Minneapolis to work," he said. "People have to be creative and try secondary routes to avoid congestion.

"But gas prices? I don't know what the answer is for that one."