Met Council revising its look into the future

When the Metropolitan Council last assembled a framework for how the seven-county Twin Cities region could sustain its projected development and population 30 years into the future, the biggest trend in residential real estate was the proliferation of McMansions in far-flung suburbs.

The Hiawatha light-rail line had yet to haul its first commuter and apartment vacancies were at all-time highs when that document, called the 2030 Regional Development Framework, made its debut in 2004.

Things have certainly changed. The homebuilding industry crashed in 2009 as a major recession, tight mortgage financing, higher gas prices and changing demographics shifted home buyer and commercial tenant preferences away from the distant suburbs to locations closer to the city.

Now the Met Council is in the early stages of updating the framework -- which serves as an overall growth plan for the region -- and is soliciting ideas from the hard-hit homebuilding and commercial real estate industries on the direction they'd like to see it take.

They call the updated plan "Thrive MSP 2040" and council officials have been conducting outreach sessions this year in which they're trying to get real estate professionals to think beyond the usual short-term timeframes and picture a future 30 years from now in which their customer bases will be much, much different.

"The changes over the next 30 years are going to be pretty dramatic," Met Council Member Harry Melander told members of the Institute of Real Estate Management last week. "Our communities are growing very diverse. Their housing, transportation and economic needs will change as well."

For example, he noted, the Twin Cities region will have 900,000 more people, with twice as many elderly. Also, by 2040, 43 percent of the region's population will be people of color, up from today's 24 percent.

"We need to get our arms around the idea that what is real today will be much different in 30 years," Melander told the attendees.

The agency says it has solicited the opinions of such real estate industry groups as NAIOP -- the commercial real estate development association -- the Builders Association of the Twin Cities (BATC) and the Urban Land Institute to gather input for Thrive MSP 2040.

"We've gotten wiser in the last 10 years and there are things that we've learned about what can happen to the economy, what the emerging issues are, how the world has changed already and how the world will be changing," Met Council Research Manager Libby Starling said in an interview. "Thrive will be incorporating and reflecting changes that a decade ago simply weren't on our radar screen."

The current framework was written at a time when the region was well on its way to an economic peak in terms of development and housing construction, when it was assumed there would always be increases in the number of jobs.

"But what we've seen in the few years is that employment did not increase between 2000 and 2010. Employment dropped in the seven-county area, so growth management isn't the issue it was before," she said.

A spokeswoman for BATC said the builders group didn't want to comment for this article, but in testimony before the Met Council in March, David Siegel, its executive director, urged that the plan not add to costly regulations that homebuilders must pass on to buyers.

"Some 25 percent of the final price of a home is regulatory burdens," he said. "That's not sustainable and is a challenge in this marketplace. We've got to look at a method by which we can reduce that regulatory burden on home construction because it's impacting home affordability dramatically."