{"id":8844,"date":"2023-08-19T05:52:10","date_gmt":"2023-08-19T05:52:10","guid":{"rendered":"https:\/\/imsfund.com\/?p=8844"},"modified":"2023-08-19T05:52:10","modified_gmt":"2023-08-19T05:52:10","slug":"minneapolis-has-the-lowest-metropolitan-inflation-rate-in-the-country-it-started-with-zoning","status":"publish","type":"post","link":"https:\/\/imsfund.com\/index.php\/2023\/08\/19\/minneapolis-has-the-lowest-metropolitan-inflation-rate-in-the-country-it-started-with-zoning\/","title":{"rendered":"Minneapolis Has the Lowest Metropolitan Inflation Rate in the Country\u2014It Started With Zoning"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div :class=\"{ 'hidden': $store.proContent.showFullPrompt() }\">\n<section class=\"px-4 relative border border-slate-200 mobile-toc lg:hidden\" x-data=\"{open:false}\">\n<button x-on:click=\"open = !open\" class=\"flex items-center gap-4 my-2 border-none w-full\"><br \/>\n<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"h-6 w-6\" fill=\"none\" viewbox=\"0 0 24 24\" stroke=\"currentColor\" stroke-width=\"2\"><path stroke-linecap=\"round\" stroke-linejoin=\"round\" d=\"M4 8h16M4 16h16\"\/><\/svg><\/p>\n<h2 class=\"font-semibold text-slate-800 text-base m-0 js-toc-ignore\">In this article<\/h2>\n<p><\/button><\/p>\n<\/section>\n<p><span data-preserver-spaces=\"true\">The Federal Reserve has been actively trying to tame inflation for over a year now. Since March 2022, the central bank has hiked its benchmark interest rate 11 times\u2014all in hopes of getting inflation down below 2%.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">While the efforts have so far proven unsuccessful (the nation\u2019s inflation rate is 3.2%, as of last week\u2019s numbers), one city has bucked the trend: Minneapolis.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The Minneapolis-St. Paul metro area\u2019s inflation rate slipped below 2% back in May. By July, it had dipped to just 1%\u2014 the lowest of all major metros in the U.S.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">How did the Twin Cities do it? It all comes down to housing.<\/span><\/p>\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Bucking the NIMBY Trend\u00a0<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">Shelter accounts for a third of the overall consumer price index, so with\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/goldman-sachs-home-price-forecast-says-prices-will-go-sideways\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">ever-rising home prices<\/span><\/a><span data-preserver-spaces=\"true\">\u2014not to mention higher mortgage rates\u2014housing has played a big role in the run-up of inflation in recent months.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">So that\u2019s where Minneapolis started. Back in 2018, the city stuck it to the Not in My Backyard (NIMBY) crowd, passing the Minneapolis 2040 plan, which eliminated single-family zoning in 70% of the city\u2019s residential land.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">And the move was an unleashing. \u201cThe most wonderful plan of the year,\u201d as the Brookings Institution dubbed it, led to an explosion of new development\u2014and most importantly, more dense housing.\u00a0<\/span><\/p>\n<p><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/buy-a-duplex\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Duplexes<\/span><\/a><span data-preserver-spaces=\"true\">, triplexes, and\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/multifamily-apartment-building-case-study\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">apartment buildings<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0popped up left and right, and developers no longer had to jump through hoops for\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/property-rezoning\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">zoning changes<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0or face hard-nosed neighborhood opposition. At one point last year, a whopping 1,500 multifamily permits were approved in just one month. Across all of 2022? The city saw about 16,000 new multifamily permits approved\u2014up by about 3,000 from 2021 and even more from years prior.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The extra supply helped tamp down housing cost growth\u2014both for buyers and renters. The median home price in the city currently sits at $382,000, according to Redfin, significantly lower than the national average of $426,000.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The city has also invested more than $320 million in rental assistance and subsidies over the last few years, tempering local housing costs even further. In fact, according to the\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.pewtrusts.org\/en\/research-and-analysis\/articles\/2023\/04\/17\/more-flexible-zoning-helps-contain-rising-rents#\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Pew Charitable Trusts<\/span><\/a><span data-preserver-spaces=\"true\">, Minneapolis rent growth since 2017 is just 1%. Nationwide, it was 31%.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">As Minneapolis Mayor Jacob Frey recently told Bloomberg: \u201cI can\u2019t tell you how many people were like, \u2018Oh, look at all this supply, look at all these just brand-new buildings,\u2019 and kind of scoffing at it like this was going to lead to gentrification or rents skyrocketing. The exact opposite has happened.\u201d<\/span><\/p>\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Can Other Cities Replicate Minneapolis\u2019 Strategy?<\/span><\/h2>\n<p><span data-preserver-spaces=\"true\">Judging by the latest inflation numbers, Minneapolis clearly did something right. But is it a strategy other cities can replicate? That remains to be seen.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">The NIMBY movement has been vocal in recent years. It\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.bloomberg.com\/news\/articles\/2023-04-03\/rich-nyc-suburbs-fight-hochul-s-housing-plan-they-say-will-destroy-them\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">effectively killed New York Gov. Kathy Hochul\u2019s housing plan<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0earlier this year, which aimed to add 800,000 new housing units to the state over the next decade. It\u2019s also posing challenges in California, Georgia, North Carolina, Texas, and other states across the country.\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Those in this movement come armed with plenty of talking points, such as: Adding more dense housing to suburban areas will cause crime to spike. Property values will drop. Traffic will worsen. It will stretch local services thin or change the character of the neighborhood.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Whether those arguments are true is debatable, but they\u2019re arguments nonetheless. And until cities are willing to take on these movements, mimicking Minneapolis\u2019 approach will be all but impossible.<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">That said, California, which undoubtedly has one of the biggest affordable housing shortages in the nation, has tried to make inroads. The\u00a0<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.gov.ca.gov\/2023\/03\/09\/california-sues-huntington-beach-for-violating-state-housing-laws\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">state is actually suing<\/span><\/a><span data-preserver-spaces=\"true\">\u00a0the city of Huntington Beach for restricting certain development applications. Gov. Gavin Newsom even called the city\u2019s elected officials \u201cthe poster child for NIMBY-ism.\u201d\u00a0\u00a0<\/span><\/p>\n<p><span data-preserver-spaces=\"true\">Considering Huntington Beach filed its own lawsuit against the state, it\u2019s likely to be a protracted battle (and probably not the easiest path for other locales to follow).\u00a0<\/span><\/p>\n<div id=\"visibility-group-block_64dd561cede13\" class=\"visibility-group  hidden\">\n<div id=\"hero-block_62df1a82bfc88\" class=\"first:mt-0 hero-block py-4    has-background has-slate-200-background-color has-text-color has-theme-gold-color\">\n<div class=\"gap-10 lg:gap-20 flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n<div class=\"relative z-30 lg:w-1\/2 \">\n<main class=\"py-4\"><\/p>\n<p class=\"has-slate-800-color has-text-color has-large-font-size\" style=\"font-style:normal;font-weight:800\">Find an Agent in Minutes<\/p>\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color\" style=\"font-size:18px\">Match with an investor-friendly agent who can help you find, analyze, and close your next deal.<\/p>\n<p><\/main>\n<\/div>\n<div class=\"lg:w-1\/2 first:mt-0 relative h-full lg:flex lg:items-center\">\n<img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/bpimg.biggerpockets.com\/https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Agent-Finder-Block-2.png\" alt=\"find an investment-friendly real estate agent\" title=\"Minneapolis Has the Lowest Metropolitan Inflation Rate in the Country\u2014It Started With Zoning 2\"\/>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<div class=\"wp-block-group is-layout-constrained\">\n<div class=\"wp-block-group__inner-container\">\n<div class=\"wp-block-group__inner-container\">\n<div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n<div class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n<div class=\"relative z-30 w-full \">\n<main class=\"py-4\"><\/p>\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n<p><\/main>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<p class=\"italic\"><b>Note By BiggerPockets:<\/b> These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.<\/p>\n<\/div>\n<\/div>\n<p><br \/>\n<br \/><a href=\"https:\/\/www.biggerpockets.com\/blog\/minneapolis-tamed-inflation-by-changing-zoning-laws\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In this article The Federal Reserve has been actively trying to tame inflation for over a year now. Since March 2022, the central bank has hiked its benchmark interest rate 11 times\u2014all in hopes of getting inflation down below 2%. While the efforts have so far proven unsuccessful (the nation\u2019s inflation rate is 3.2%, as [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":8845,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"fifu_image_url":"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/08\/minneapolis-1024x517.jpg","fifu_image_alt":"","footnotes":""},"categories":[9],"tags":[],"class_list":["post-8844","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/8844","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/comments?post=8844"}],"version-history":[{"count":1,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/8844\/revisions"}],"predecessor-version":[{"id":8846,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/8844\/revisions\/8846"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/media\/8845"}],"wp:attachment":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/media?parent=8844"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/categories?post=8844"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/tags?post=8844"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}