Agenda - Planning Commission - 11/07/2013

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Metropolitan Council's Preliminary Forecasts Methodology Long-range forecasts at Metropolitan Council are updated at least once per decade. Population, households and employment levels are projected with a 30-year time horizon. The regional and local forecasts express future expectations based on an understanding of regional dynamics, and representing expected outcomes of policies and planning. Consistent with Minnesota Statutes 473.146 and 473.859, these forecasts provide a shared foundation for coordinated, comprehensive planning by the Council and local governments. A preliminary regional forecast was presented at Metropolitan Council's Committee of the Whole on April 18, 2012. Preliminary local forecasts were issued on September 11, 2013. The ultimate results of this project — a final regional forecast, together with local forecasts — will be included in the Thrive MSP 2040 plan for Council approval in April 2014. Overview of forecasting project. Metropolitan Council's long-term forecasting is premised on understanding the Twin Cities' situation within the larger, national economy: The region's business conditions and competitive advantages determine regional economic and employment levels, which in turn prompt population growth through migration. Subsequent to the regional forecast, local forecasts address geographic distributions within the region. Regional population, households and employment will site in specific places. Metropolitan Council assumes that real estate demand and supply dynamics, interacting with future transportation accessibility, primarily determine outcomes, influenced by regional land use policies and local plans. Considering the multi -scale nature of future planning needs, Metropolitan Council employs multiple forecast modeling tools: • A regional economic model for forecasting region -level economic activity and migration flows in response to economic opportunity. • A demographic model packaging population forecasts into various household types • A land use model simulating and projecting real estate market dynamics, in order to locate future land use, households and employment to communities and zones. Methodology of REMI Pl. In 2011, following a review of best practices in regional economic modeling, the Council selected REMI PI as the model best fitting the Council's understanding of regional growth. REMI PI is a structural macroeconomic simulation model. It makes use of computable general equilibrium (CGE) techniques for simultaneous solution of macroeconomic accounts, as well as input-output matrices to represent inter -industry flows and impacts. Also, the model employs new economic geography techniques to represent regional differentials and aggregated interactions among regions, mainly trade and migration flows. Page 2