39Bloomberg Businessweekkept Americans from making an additional
$3,685 per person per year by 2009, they found.
Minneapolis isn’t Silicon Valley, and no one
is suggesting that allowing more development
in a midsize Midwestern metropolitan area will
turbocharge U.S. growth. But the city’s drive
to boost density could have benefits beyond
its borders and set an example for the rest of
the country, Moretti says. “It’s not just good
for Minneapolis, it’s good for the rest of the
U.S., as well.”bout a dozen city staff worked on
the 2040 plan for roughly two and
a half years. But its biggest polit-
ical champion was Minneapolis
Council President Lisa Bender, a 41-year-old for-
mer city planner and cycling advocate. She’d
moved back home to the Twin Cities with her hus-
band in 2009 after stints in New York and the Bay
Area, lured by the great parks, top-notch public
schools, and what then was reasonably priced housing. Even
so, Bender says, she could see that Minneapolis faced a “loom-
ing affordability crisis.”
In 2013 she decided to contest her local council member’s
seat. A Facebook post from the time shows her, nine months
pregnant, canvassing on a bicycle. “I ran for election explicitly
saying we need more housing,” says Bender, who gave birth to
her second child a month before winning office.
Minneapolis’s population was already growing rapidly,
jumping by about 46,000 people, or 12%, from 2010 to 2018,
as younger people settled in the city instead of the suburbs.
Rents rose briskly, and apartment vacancy rates plunged to
some of the lowest levels of any major U.S. metro area. The
inventory of homes on the market dwindled, spurring bidding
wars. “The price of coffee hasn’t changed in five years, but
housing costs 40% more,” says Aaron Eisenberg, a real estate
agent who often works with first-time buyers.
Millennials struggling to find houses in their
price range were just the tip of a much deeper
problem. Minneapolis, like many U.S. cities,
has a history of segregation reinforced by fed-
eral, state, and local housing laws. Almost 60%
of white residents own a home in the city, but
only about 20% of blacks do, one of the largest
differentials in the nation and a big reason for the
yawning racial wealth gap. In the 20th century,
“you had these intentionally segregationist and
racist policies” that barred blacks from living in
certain parts of town, says Mayor Jacob Frey, 38,
who backed the plan. When those laws became
illegal, the city “started doing it in other ways,
through our zoning code,” he adds. “That’s what
we’re pushing back on.”
In her freshman term, Bender championed aPHOTOGRAPHS BY ACKERMAN + GRUBER FOR BLOOMBERG BUSINESSWEEK
△ Bender
law that allowed homeowners to build backyard cottages as
a way to encourage more density in single-family neighbor-
hoods. She also quietly began laying the groundwork for more
ambitious reform. Every 10 years, local governments in and
around the Twin Cities are required to submit a long-range
plan to a regional council. Minneapolis had done a good job of
charting a vision for its transit system, Bender says. But it had
never focused on what it would mean to make access to hous-
ing more inclusive. The city likes to think of itself as progres-
sive, but Bender knew changing zoning would be controversial.
People “start to have a lot of emotion around what’s my com-
munity going to look like, how do I fit in here” when you start
talking about what could get built on their corner, she says.
Another challenge: Work on the plan would straddle an
election year, putting into question whether there’d be politi-
cal backing for some of the more controversial ideas. As Bender
campaigned for her own reelection, she also threw her sup-
port behind other pro-growth candidates committed to mak-
ing housing more affordable and racially equitable.
One was Phillipe Cunningham, a black, transgender former
mayoral aide who won a seat in 2017, beating a long-serving
council president. Cunningham had witnessed the effects of
the housing crunch in his own ward, a diverse, working-class
area in north Minneapolis. Buyers who were getting priced
out of other parts of town were increasingly moving into his
neighborhood, driving up home values. Investors had targeted
the area, too, snapping up single-family homes that could be
turned into rentals. “I’m not OK with my constituents being
displaced by people with higher incomes,” Cunningham says.
“We need to build more places for people to live.”
By the time the new council was sworn in at the begin-
ning of 2018, city staff were deep into their work on the 2040
plan. They held dozens of information sessions around the
city, including on public transit. “We’d just get on the bus
and talk to people,” recalls Heather Worthington, director
of long-range planning.
The city released a draft in the spring. The backlash