As population growth slows in Minnesota and the country, outer ring suburbs in some Twin Cities are seeing growth rates accelerate since the COVID-19 pandemic, new regional estimates show.
It’s a marked change from the 2010s, when the biggest advances occurred in the urban core. Population growth in Minneapolis, St. Paul and many inner suburbs has stalled in recent years, or even declined.
However, in the outer suburbs, new housing construction (mainly single-family homes and townhouses) is driving faster growth. The northwestern metropolitan city of Dayton saw its population increase by 40% between 2020 and 2023, according to new estimates from the Metropolitan Council. Lakeville added 5,700 residents during the same time period, the most of any city in the metro area.
It is a resurgence of trends seen at the beginning of the century.
“Our growth levels and the distribution of growth in the region look very similar to those of the 2000s,” said Matt Schroeder, a senior fellow at the Met Council. “But the underlying dynamic is somewhat different.”
Demographers have long predicted slower growth in the region due to lower birth rates, aging and a decline in international immigration. Some of those trends accelerated at the peak of the pandemic, when death rates rose and immigration declined more steeply, Schroeder said.
But the Met Council’s population estimates, calculated each year between the US Census Bureau’s decennial count, rely heavily on housing data.
The average household size has been shrinking for some time, at least partly in response to aging and lower birth rates. The decline is most dramatic in the urban core, where many of the units added in recent years have been studios and one-bedroom apartments that may be less attractive to families.
The data also showed that occupancy rates will fall across the metro in 2023, Schroeder said, especially among multifamily units. That could be partly because it’s taking time to fill all the new apartment buildings built in recent years, she said.
Building permits for multifamily developments, an indicator of future construction, also plummeted in 2023 after interest rates soared.
“One of the things we’re really watching is development,” Schroeder said. “Based solely on development trends, it appears that growth will continue to lean more toward outlying suburbs than Minneapolis, St. Paul and more first-ring suburbs.”
The end of the urban boom?
Population growth over the past decade in Minneapolis, St. Paul and America’s big cities was driven by young adult millennials flocking to newly built apartments and condos. Because the generation is one of the largest, its changes have had a more seismic effect.
Multifamily development recovered more quickly from the Great Recession, outpacing single-family development for several years. Moves to the suburbs, typical of young people from previous generations, were postponed.
Now, as more millennials age and become homeowners, growth has dissipated from city centers to the suburbs, said Susan Brower, Minnesota’s state demographer.
“That was something that started happening before the pandemic,” he said. “Minneapolis and St. Paul are very much in line with what’s happening nationally.”
International immigration also declined during Donald Trump’s presidency and the pandemic, a trend that had a greater impact in central cities that have historically favored new immigrants, Brower said.
He emphasized that the suburbs are not now seeing the levels of growth that the urban core experienced in the past decade.
“We’re seeing slowed growth everywhere,” Brower said.
But the growth that is occurring is more concentrated in the suburbs.
While Dayton’s 40% growth rate is the fastest in the metro between 2020 and 2023, neighboring Corcoran saw its population increase by nearly a third, according to the Met Council. Lexington in the northern suburbs and Lake Elmo to the east each grew by about a quarter.
While these suburbs have relatively small populations, their growth rates are faster than those of the metropolitan core. Overall, the seven-county Twin Cities metropolitan area grew about 2%.
Growth in these suburbs coincides with the acceleration of residential construction. For example, of all new building permits for single-family homes and townhomes since 1970, more than 30% in Dayton and Corcoran have been issued since 2020. That percentage was about 25% in Lake Elmo and about 12% in Lakeville. all well above the regional rate of 6%.
Demographic headwinds against housing
Schroeder said it’s important to realize that the Met Council’s figures are estimates.
There are still uncertainties about how the pandemic affected the 2020 Census, the starting point of the estimates. Fast-moving property trends can also take a while to capture, as the Met Council relies on five-year averages of data.
Many questions remain about how future social changes might shape demographic trends. William Frey, a demographer at Brookings Metro, said in a recent article that the future of remote work, new waves of immigrants and the preferences of younger generations could all have impacts.
Take Brooklyn Park as an example. The city lost approximately 2,600 residents between 2020 and 2023, according to the Met Council.
Single-family housing was long an engine of growth in the suburb, although production slowed substantially after the Great Recession. The city began adding units in a series of multifamily projects starting in 2015, based on Met Council building permits, but that type of development has also slowed since the pandemic.
Brooklyn Park “hasn’t built as much as it needed to to offset those demographic headwinds” in recent years, Schroeder said. City officials said that’s a topic of conversation, not a topic of concern.
“Over a longer period of time, we’re still seeing growth,” said John Nerge, the city’s GIS and data analytics coordinator.
And they hope more will come.
Paul Mogush, Brooklyn Park planning director, said the city has about 1,000 acres of undeveloped land, as well as ample opportunities for infill and redevelopment. City officials also say they believe the planned extension of the Blue Line light rail, which is expected to bring five new stations to Brooklyn Park, will lead to further growth.
“There’s going to be a different type of development,” Mogush said: more apartment buildings, mixed-use properties, walkable communities.
“It’s not just potential: it will become a reality. We will continue to grow,” he said. “It’s just about timing, you know? When will it happen?”
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