Is this the end of the Minneapolis and St. Paul population boom?

Luke and Emily Kramer loved living in their 900-square-foot bungalow in south Minneapolis but were ready to move their growing family and two dogs to a place with more space in the suburbs.

Around the same time, Jeanne Walthoer downsized to an apartment in the city's Prospect Park neighborhood that was close to her daughter and more suitable for aging.

A record number of moves like these have been reshaping the populations of Minneapolis and St. Paul, which swelled last decade thanks to empty nesters and young adults flocking to newly built apartments and condos.

New data released this spring seems counterintuitive: New housing continues to go up, yet it appears that growth in the Twin Cities has at least slowed, and could even be heading back into decline.

There's a lot of uncertainty about exactly what's happening. Even under normal circumstances, estimating a city's population can be tricky.

The last couple of years have been exceptionally challenging because estimates rely on assumptions that previous birth, death and migration patterns will remain largely unchanged. That didn't happen during the pandemic, and it's too soon to tell whether its effects are causing a temporary blip in trends or more permanent shifts.

There are also larger demographic trends that started before the pandemic — such as aging and lower birth rates — that have accelerated so far this decade.

"It's not clear in my mind how much of the slowing in Minneapolis and St. Paul is due to the big demographic changes that are unfolding versus the migration and residential preferences," said Susan Brower, the state demographer. "I think the big demographic changes are kind of a heavy blanket that's on all of these smaller changes."

Shrinking household sizes

It's certainly possible, Brower said, for a city to have significant growth in housing units and a simultaneous decline in population.

"That's not to say the demand for housing isn't there — it is," she said. "It's just saying that you can have slower population growth even when you are adding housing that is being filled as it's built."

The 2020 census found Minneapolis had a population of about 430,000 and St. Paul a population of about 312,000, but since then, new estimates from the U.S. Census Bureau indicate both cities may have lost population. Estimates from the Metropolitan Council paint a slightly different picture.

The census estimates say Minneapolis lost about 1% of its population — about 5,500 people — while the Met Council estimates show the city gaining about the same amount.

Both data sets show St. Paul's population declining, but the census estimates a decline of 3% — nearly 8,000 people — while the Met Council's estimated decline is minimal, at less than 1%.

It's not unheard of for these estimates to diverge since the two authorities use different methodologies. But the conflicts present a degree of ambiguity that's challenging for planners, city leaders and developers.

However, the housing market has already been responding to a trend that both sets of estimates agree on: The average size of a household is shrinking, especially in the urban core.

This comes as no surprise to demographers monitoring the two largest generations, the millennials and the baby boomers. The former are having fewer children than previous generations; the latter are reaching retirement and the age where mortality rates increase. Both are boosting demand for smaller rentals like the one where Walthoer lives.

In 2020, nearly half of the 7,416 apartments built in the metro were in Minneapolis, according to Marquette Advisors.

Because of the abundance of young professionals and empty nesters who need housing, most of those apartments cater to singles and couples.

"We have found that our residents seek the one-bedroom or alcove units, both for the price point and other efficiencies," said Jamie Korzan, vice president of investor relations at Oppidan, the developer of the Pillars at Prospect Park.

Walthoer was drawn to the senior building because it has an on-site day care and 10 apartments set aside for college students.

"It's important for us seniors to have that in our lives," she said, recalling how she loves rocking babies in the day care and the days when there were children and families on every street in the Minneapolis neighborhood where she grew up.

"There are fewer families now," she said. "I've seen the gradual change."

Fewer families?

The population of children between the ages of 7 and 17 living in both cities has dropped by more than 6% since before the pandemic, according to a Star Tribune analysis of data from the Minnesota Department of Education. Minneapolis and St. Paul, along with two inner suburban districts, were the only ones in the metro to see declines of that size.

After seven years in Minneapolis, the Kramers and their son, Henry, left for a four-bedroom Minnetrista home in 2021.

At first, there weren't many families in their new suburban neighborhood, where many of the homes had been built just a couple of decades ago. Now, many older, longtime homeowners are being replaced by growing families like the Kramers, who welcomed baby Frances since the move.

"The neighborhood is starting to turn over," Luke Kramer said. "The families that have moved in do have kids."

Both the census and the Met Council data show that though population growth has slowed for the seven-county metro region as a whole, the gains happening were largely concentrated in farther out suburbs between 2020 and 2022 — perhaps partly for reasons similar to the Kramers.

For many millennials who flocked to urban centers in their 20s, maybe it was simply time for a lifestyle shift after becoming parents.

Compared with just two years prior, the number of family households in Minneapolis— defined as people who are related by blood, marriage or adoption — dropped by 5,000, according to the American Community Survey. That would be considered mostly stable in this large city. But at the same time, the share of non-family households, which mainly consists of people living alone, now makes up nearly 60% of households in the city, up from about 56% in 2015.

House prices in Minneapolis far outpaced many suburbs last year and the rise of remote work meant many people no longer had to worry about commutes. Civil unrest in 2020 and a subsequent spike in crime caused many to reconsider their options.

Those factors weren't an issue for the Kramers, who recently visited their former neighborhood, where they saw about a half-dozen new families with kids had moved in.

Many of families that are moving to the city have kids who are not yet in school, and while the city's school-age population is influenced by the kinds of move the Kramers just made, it's also affected by the declining birth rates and aging.

"Looking over the course of decades, things shift. They go in waves," said Matt Schroeder, senior researcher for the Met Council. "It's not necessarily this kind of one-direction decline or increase in the population."

'Wait and see'

Demographers urge caution when interpreting the population estimates, which are produced annually until the next census in 2030.

"Everyone's just kind of taking their best guess because no one really knows what the population is," Schroeder said. "We're using different data sources trying to come up with some combination of them that makes sense for the region."

Both sets of estimates use the 2020 census as a starting point, which poses problems in and of itself. The pandemic created delays and challenges for the once-a-decade count, which was later determined to have undercounted Hispanic, Black and Native American residents more than in the past.

Demographers across the U.S. have also expressed concern that the 2020 census overcounted populations in urban areas, said Hamilton Lombard, a demographer with the Weldon Cooper Center in Virginia.

The other data that both sets of estimates rely on were also likely affected by the pandemic, which resulted in a period of unprecedented change.

"Things did change really, really quickly after 2020 and that may be where you are getting conflicting trends," Lombard said.

The Met Council, for instance, relies heavily on housing stock and building permit data, as well as estimates of vacancy rates and the average household size. Changes in the household size, in particular, can be slow to catch up to fast-moving trends because they're based on five-year averages.

On the other hand, the census relies on birth, death and migration patterns reflected by tax returns, which officials say can be harder to pin down at a local level.

That's not to say the estimates aren't important. In addition to influencing a community's reputation and planning, the figures help determine how to distribute millions of dollars in state and federal aid.

City officials say they don't expect the latest population changes to move the dial in terms of federal funding. And looking ahead, Nicolle Goodman, St. Paul's planning and economic development director, is optimistic.

"While our population has remained essentially steady, we anticipate growth through the addition of housing options, climate migration and the gradual normalizing of the market after COVID," she wrote in a statement in response to Star Tribune questions.

Staff from both Minneapolis and St. Paul pointed to policy work like their efforts to eliminate single-family zoning, a move aiming to increase the variety of housing choices and density — one of the paths to growth in cities that are fully developed.

"We just have to wait and see," Brower, the state demographer, said. "We may be returning to some of the trends that were occurring before the pandemic, but we also may be on a new trajectory because of the pandemic. That's what we're watching now."