Investment Matters. Location Matters.

These indicators examine business ownership and where in the region job growth at young firms, investment in small businesses, and commercial and residential development is occurring. Indications of a more inclusive economy might include growing numbers of minority-owned businesses; businesses and employers locating in areas where talent is plentiful, proximate and under-tapped; lenders addressing the shortage of capital flowing to under-served areas; and community-desired development accruing to places that have suffered from disinvestment.

Business Ownership

Number and share of MSP businesses owned

Entrepreneurship and business ownership are important means of wealth creation in a community. Studies have also shown that companies owned by persons of color hire a greater share of employees of color. Locally, 48% of positions at MEDA-supported businesses in 2017 were filled by people of color

Number of MSP businesses owned (2016)(thousands)

Note: White individuals owned 85.0% of MSP businesses in 2016, while making up 75.6% of the MSP population

Share of MSP businesses owned vs. share of MSP population (2016) (%)

Source: Annual Survey of Entrepreneurs (ASE), American Community Survey (ACS)

What we’re seeing

  • Black individuals underrepresented as business owners: Only 1.7% of MSP businesses are Black-owned, despite Black residents making up more than five times that share of the MSP population (8.7%)

  • American Indian and Hispanic individuals are also significantly underrepresented as business owners: The shares of American Indian-owned (0.3%) and Hispanic-owned (1.4%) businesses are notably less than the American Indian (0.9%) and Hispanic shares of the MSP population (4.9%)

  • White individuals overrepresented as business owners: The share of MSP businesses owned by White individuals exceeds the White share of the MSP population by nearly 10%

How many people live in MSP, by race/ethnicity?

Data for Hispanic or Latino business ownership includes all individuals who identified as Hispanic, regardless of race.


Number and share of jobs at young firms (0-5 years old) in MSP

New businesses serve a disproportionate role in the economy in “commercializing innovations, stoking competition, and driving productivity growth… critical to achieving wage-boosting full employment” (Economic Innovation Group). It is, in part, “not the size of the business that matters as much as the age” (Kaufman Foundation).

Note: Census tracts with a poverty rate >20% have been designated as high-poverty. All others have been designated as low-poverty.

Number of jobs at young firms (in thousands)

Source: LEHD Origin-Destination Employment Statistics (LODES)

Share of jobs at young firms 2011-15 (%)

Source: LEHD Origin-Destination Employment Statistics (LODES)

What we’re seeing

  • Bigger source of jobs in low-poverty areas: In 2015, young firms provided nearly 100,000 more jobs in low-poverty areas than in high-poverty ones, or 4% more of total jobs in those areas

  • Recent decline in share of jobs at young firms: In 2015, jobs at young firms grew more slowly than total jobs in both low- and high-poverty areas , producing a decline in the share of jobs at young firms

  • Post-recession drop in share of jobs in high-poverty areas: Starting in 2012 and in each following year, young firms provided approximately 4% fewer jobs in the region’s high-poverty areas than in its low-poverty areas

How many MSP residents live in high-poverty census tracts?

Data for private sector firms only; 2015 is the most recent available data year from LEHD.


Source: LEHD Origin-Destination Employment Statistics (LODES)


Bank loans to MSP businesses with less than $1M in gross annual revenues

Most businesses need capital to launch and grow. When capital needs go unmet, investment can come from philanthropy, community development financial institutions, and various public sector programs – however, these institutions lack sufficient resources to fully serve demand. Traditional lending institutions remain vital to business growth.

Total bank loans to small businesses 2013-2017 ($M)

Source: Federal Financial Institutions Examination Council (FFIEC), Community Reinvestment Act Data

Majority-POC census tracts in 2017 (%)

Source: FFIEC & ACS 5-Year (2013-17) Estimate for Workers Residing in Area

What we’re seeing

  • Less lending than expected in majority-POC areas, given the number of workers in those areas: In 2017, the share of the region’s workers in majority-POC areas (9.7%) was nearly twice the share of the region’s bank lending to small businesses that went to these areas (4.5%)

  • Wide and persistent gap in bank lending to small businesses: In 2017, banks lent over $800M to small businesses in majority-white areas, while loaning only about 5% of that total ($40M) to small businesses in majority-POC areas

  • Annual increases accrue to majority-white areas: Annual lending to small businesses in majority-white areas has increased approximately $120M since 2013, while it has increased only about $2.5M in majority-POC areas

How many MSP residents live in majority-people-of-color census tracts?

Includes only loans originated, not purchased; does not include loans to farms; 2016-17 data for number of workers from ACS 2013-2017 average and 2013-15 data from LODES WAC counts.


Source: Federal Financial Institutions Examination Council (FFIEC), Community Reinvestment Act Data

Regional Investment

Number and value of building permits in MSP (7-county metro area only)

Development can increase the local tax base, provide jobs, and spur additional private investment. It’s also important that transit and transportation services, along with a full range of housing options, are considered in areas with significant economic development and that as housing development increases, options are available at a variety of price points.

Note: Census tracts with a poverty rate >20% have been designated as high-poverty. All others have been designated as low-poverty.

Value of commercial, industrial, and public permits 2013-2017 ($B)

Source: Metropolitan Council

What we’re seeing

  • One-year jump due to stadium construction: In 2014, the total value of building permits in high-poverty areas jumped upwards due to the construction of US Bank Stadium in Minneapolis

  • Twice as much building in low-poverty areas: In 2017, the total value of building permits in low poverty areas was over $1.8B, more than twice the value in high-poverty areas (about $0.9B)

  • Similar growth in high and low-poverty areas: Between 2013-2017, the total value of building permits increased by about $0.8B in both high- and low-poverty areas

How many people live in high-poverty census tracts?

What you can do with these maps

In the top map, you can explore the number and dollar amounts of commercial, industrial, and public building permits in different MSP census tracts. The selection tools allow you to examine how building permit activity varies if census tracts have poverty rates of 20% or greater or in tracts where the population is majority of-color. In the bottom map, you can see the number of new housing units permitted in cities across the metro from 2013 to 2017.

Value of commercial, industrial, and public permits ($)


Source: Metropolitan Council

New housing units permitted, by city (#)

City New Housing Units (2017)
Golden Valley809
Apple Valley790
St. Paul644

What we’re seeing

  • Residential development in inner and outer suburban cities: Residential development is occurring regionally, inclusive of the two central cities (Minneapolis and St. Paul), as well as inner and outer suburban communities

  • Multifamily housing production occurring across region: In their analysis of 2016 residential permits, the Metropolitan Council found that 60% of permits were for “attached units” (e.g. apartments, condos, townhouses, etc.) Alongside Minneapolis and Saint Paul, suburban cities including Minnetonka, Maple Grove, and Blaine added hundreds of units of multifamily housing between 2014 and 2016.

  • Residential development needed: In 2018, Metropolitan Council staff reported that the region needs to add 13,400 units of housing in order to reach a balanced 5% vacancy rate. In this same analysis, analysts found that housing production lagged population growth by 43% which likely affects housing costs.

Source: Metropolitan Council; Data includes both rented and owned housing units.



Small businesses are vital to the success of our economy - creating employment opportunities, spurring innovation and helping individuals and families achieve financial independence. To ensure thriving communities, you must have thriving small businesses. In North Minneapolis, entrepreneurship is not uncommon, and not always easy. Northsiders face the challenges of starting and running a small business similar to other entrepreneurs nationwide. We're proud to highlight three entrepreneurs - Anissa Keyes, Arubah Emotional Health; Connie Beckers, Goddess of Glass; Frank Brown, Minuteman Press Uptown.

Video Credit: Northside Storyville

MEDA supports business owners of color throughout the region with training, financing, and other supports. Read more from MinneInno.

Video Credit: MEDA

What you can do


Supplier diversity

Businesses and public institutions can grow and support minority owned businesses by creating supplier diversity leadership positions, committing to annual procurement targets, and creating partnerships with organizations that support minority owned businesses.

In Minnesota, corporations can join local chapter (North Central) of the Minority Supplier Development Council where participation requires a company commitment and plan to advance supplier diversity and annual reporting on measures such as: number of minority companies invited to bid, number of minority companies awarded contract opportunities and total dollar purchases from minority companies.


Targeted Capital

When traditional financial institutions fail to invest adequately in certain places and populations, targeted loans and investment dollars from the public and philanthropic sector can address some of that need, while potentially inspiring private capital to follow. Culturally-specific financial institutions and technical assistance providers also play a major role in addressing these gaps. In MSP, several organizations provide these services, including:



Incubators help new and startup businesses by providing opportunities for shared space, training, access to networks and potentially financial investment. In MSP, several business incubators are targeting startups led by entrepreneurs of color. Examples include:



In order to help minority-owned construction and contracting firms successfully compete for state and other large contracts, the Minnesota Department of Transportation created a DBE Learning Hub and Small Business Resource Center to provide technical assistance in business planning and proposal writing.

In 2016, the City of Minneapolis created the Small Developers Technical Assistance program (D-TAP) to build diversity and capacity for small real estate developers. 

Note: MBE=Minority Business Enterprise; DBE=Disadvantaged Business Enterprise


Worker-owned Businesses

In 2017, Nexus Community Partners commissioned a study by Project Equity that found six out of ten business owners were looking to sell their businesses in the next decade. Business sales can create new opportunities for both minority business ownership and/or worker-owned business conversions.

Nexus has created the Worker Ownership Initiative (WOI) to scale business conversions to worker ownership as a means to build community wealth and maintain local ownership of businesses. Nexus is partnering with Project Equity to work on their first Twin Cities conversion, with plans to complete 6-8 more by the end of 2022.


Commercial Land Trusts

In MSP, community land trusts (CLT) have successfully created and sustained affordable home ownership for decades; now two of them are piloting new models to keep commercial space affordable.