A new streetcar line in Minneapolis looks well on its way toward approval, and construction has begun on a new central station where five rail lines (some completed, some underway, some planned) will converge. And controversy over the preferred route for the Southwest Light Rail continues to bubble and boil over. Discussion and debate have naturally flowed forth. At the core of the debate is the recurring urban theme of the 21st century: How do you make the city competitive on both a national and a global scale? And how do you attract and keep new residents? A recent argument was made that transit and a more urban environment were what young people sought as amenities and incentives to live somewhere, and thus they could help make the city competitive. While true, we must argue that the diversity and robustness of markets play an equal if not greater role in helping the city maintain its competitive edge and attracting a broad cross-section of people who are in it for the long haul. And that market diversity can only come with increased population density.
Dense, diverse concentrations of people in urban areas translate into diverse constituencies of buying power. Manhattan is a logical example of this phenomenon. Despite high commercial rents and an increasing presence of chain retail, the island is still populated with large numbers of smaller independent businesses, oftentimes highly specialized, highly niche-oriented businesses. The only way that this is possible is that the island’s density and diversity allow for critical masses of specific, niche-oriented consumer groups. So, for example, there are enough people both within access to and who have a fondness for a Hungarian bakery on the Upper West Side that the bakery can manage to compete with the numerous other bakeries – including chain bakeries – in the city. Likewise there are enough people within access to and who have a fondness for Japanese baked goods to keep a small Japanese bakery in the East Village going strong. Bolstering these businesses even further are influxes of capital from both foreign investors, foreign consumers, and in some cases those who divide their time between New York and another city abroad. These extra boosts of capital can only emerge within cities that attract a broad cross-section of people at high densities.
In the case of Minneapolis, the city is, save its downtown core, by and large a low-density city. It has also been heretofore a relatively inexpensive city as compared with other cities it is often compared to – Seattle, and Portland, to name a couple. While the relatively inexpensive nature of the city can allow businesses to set up shop with low overhead, it cannot solve the problem of small, relatively un-diverse markets. As such, low overhead means little to a niche-oriented business if the necessary revenue from niche consumer markets is not there. And this is the conundrum that Minneapolis currently faces. Yes, we can hope that people will move to MInneapolis for its high quality of life, for its expanding rail system, for its unbelievable amounts of greenspace, but they will not all be able stay in Minneapolis if the population density and the corresponding diverse markets to support them are not there.
We could be content to argue that niche-market businesses are not needed in Minneapolis and thus who cares? We’ve got our nice concentration of white-collar employers, and this is enough. This attitude would be a mistake. The city is fast falling behind when it comes to supporting and fostering innovation, in large part because of small, limited markets. Innovators and entrepreneurs seek out cities with actual markets for their innovations, and markets that are robust enough to allow their businesses to flourish for the long haul, not simply those that provide a dose of cash here and there for a flash-in-the-pan one-off product. We can speak directly from our own experience in this case, having had to expand our reach to Los Angeles to capture a larger market for our work, a market that would otherwise be too small if we only worked in Minneapolis, despite the city being a lovely place to live, ride your bike, and so on.
In a day and age when American cities are no longer all the same and when cities are actually competing with each other for residents, capital, and jobs, Minneapolis needs to get serious about density and markets and understand that its hope that young people will move here and stay for the long haul will only be a pipe dream if the markets aren’t there to sustain their employment and entrepreneurial endeavors on a long-term, enduring level.