Agenda - Planning Commission - 11/07/2013

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expectations. The national forecast is significant insofar as the Twin Cities metro and Minnesota are part of nation, and the region's economic growth is tethered to national economic conditions. For more information, see: Minnesota Management & Budget (2012, and updated bi-annually), Economic & Minnesota Outlook, online at www.mmb.state.mn.us/feb-2013-forecast Second, Council staff update regional time -series tables with known numbers and facts on the ground: • 2011-2012 regional population by race and age are updated with estimates by US Census Bureau; • 2011-2012 regional industry employment are updated with counts from Minnesota Department of Employment and Economic Development statistics. A number of future expectations are adjusted to better reflect regional trends. There are variables in the model that are recognized as difficult to project. Generally, Council staff assumes a stable status quo or median values within the range of possibilities: • REMI's fertility rates schedules (fertility rates by race and by age of mother) are replaced with region -specific projections prepared by Council staff. In the Twin Cities metro, Council staff project the region's total fertility rate for whites increases to 1.78 per woman; the rate for blacks declines to 2.89; rates for Hispanic, Asian, and other race groups remain stable at 2.38. • REMI's survival rates schedules are adjusted to better match the Minnesota State Demographer's. The State Demographer projects, conservatively, that life expectancies advance by 2 years over the 30-year projections horizon. • College -going population by race is projected to increase in tandem with growth in the resident population of 17-year-olds by race. • Average property tax rates for the Twin Cities metro are updated to reflect tax increases during 2011-2013, and are projected to level off thereafter. • Consumer prices for energy are adjusted to maintain a constant ratio of regional prices relative to national average prices. Utility rates are held at 95 percent of the national average; fuel prices are held at 100 percent of the national average; there is not clear reason to project that Twin Cities metro relative prices would decline below these relative levels. The forecast models described above provide details on future demographics and industry composition at a macro -level, without geographic detail. Additional modeling, at a local scale, is necessary to project the geographic distribution of households and industries over time. Methodology of Cube Land. In 2009, Council staff conducted an internal needs assessment and a state -of -the -practice review of land use models. Council staff recommended adoption of a market simulation model capable of producing zonal projections of households, population and employment, as well as accounting future land use. In 2010, the Council licensed and implemented Citilabs Cube Land as a platform for local real estate market modeling and scenarios analysis. Cube Land was chosen in part for its potential to integrate with the Council's travel demand model, allowing land use patterns and transportation network conditions to iteratively adjust over time. The logic of Cube Land is the market sorting and equilibriation of real estate demand and supply (real estate types and locations), assuming best -use and value -maximizing decisions of households, site selectors and developers. Cube Land includes three submodels: • The demand submodel simulates an auction in which different market segments are willing to pay (or bid) differential amounts for combinations of real estate and place characteristics. Page 4