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What's so Miraculous about Minneapolis?

Minneapolis combines prosperity with plentiful affordable housing, an increasing rarity. Geographical factors play a role, but longstanding "fiscal equalization" policies may make the difference.
February 23, 2015, 6am PST | Philip Rojc | @PhilipRojc
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Minneapolis offers mobility and career opportunities that belie its affordable housing prices. Derek Thompson puts forward "fiscal equalization," a set of laws dating from the 1970s and unique in the U.S., as prime cause of that success. The policies require "all of the region’s local governments—in Minneapolis and St. Paul and throughout their ring of suburbs—to contribute almost half of the growth in their commercial tax revenues to a regional pool, from which the money would be distributed to tax-poor areas."

On top of this public-minded redistribution, the Twin Cities benefits from its status as a regional hub, drawing talent into the metro area without suffering an outflow of workers to larger cities. Minneapolis also has no shortage of land potential for expansion. A strong, affordable economy is the result.

But that might not be the full story. Another of Minneapolis' developmental "benefits" is its demographic homogeneity. Like social success stories in northern Europe (and unlike New York, Los Angeles, Chicago) the Twin Cities has never tackled significant racial challenges. As minorities migrate into the historically white region, whether a Minneapolis miracle can prevail is up for debate.

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Published on Monday, February 16, 2015 in The Atlantic
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