Our hyper-focus on population numbers overlooks important trends in the number of households.
By: Kelly Asche, Senior Researcher
Leaders in communities are obsessed with population numbers – are they growing or declining and by how much, over how long of a time period? – and they believe that the trendline is a marker of their community’s overall trajectory economically and civically. Granted, a community’s capacity to support its many aspects does depend on people-power—organizational leaders, purchasing power at its local businesses—and its ability to deal with the economies of scale that come with a smaller population and how that impacts numerous activities. But there are other community aspects that depend on households rather than people. For example, property taxes help pay for schools, road maintenance, and other essential infrastructure components of a city and county, but property taxes don’t depend on the number of people living in a place. It depends on the type and size and value and number of properties there. So, although population is important, it doesn’t impact everything.
Also, interestingly enough, tracking the number of households helps communities understand why they may have a housing crunch despite a decline in population: the rates of population and household change are different. In many instances, a county can be experiencing population decline, yet have an increase in the number of households. These households require housing and are also paying taxes toward essential services and infrastructure.
Minnesota-centric Categories
It’s well documented that there is a relationship between the population-change patterns of a county and how rural that county is. If you’ve read any of our reports, you know that at the Center for Rural Policy and Development, we like to use the Minnesota State Demographic Center’s modified Rural-Urban Commuting Areas, and that’s because the counties in each RUCA group tend to share similar characteristics, including population patterns.
On reviewing the academic research on migration trends, however, we found that we needed to add an additional descriptor: whether a county is recreational or not, something that was added at the federal level as well. The designation of “recreational” depends on three characteristics:
- Wage and salary employment based in the entertainment and recreation, accommodations, eating and drinking places, and real estate industry sectors as a percentage of all employment (Bureau of Economic Analysis);
- Percentage of total personal income reported for these same categories (Bureau of Economic Analysis); and
- Percentage of vacant housing units intended for seasonal or occasional use (2010 Census).
Two last refinements were then made: to take into account the similarities between Greater Minnesota’s entirely urban counties and the Twin Cities’ suburban counties by combining them into one group; and recognizing the unique population trends in Hennepin & Ramsey counties compared to the rest of the state. So, now the county groupings look like this (Figure 1):
Figure 1: Minnesota’s six county groups and how counties can be grouped by their similarities in population trends. Data: Minnesota State Demographic Center, “Greater Minnesota Refined and Revisited” | USDA ERS, “County Typology”
Population vs household change
It’s common to look at population trends and ascertain some sort of status regarding the “health” or sustainability of a county. It’s common sense to think that more people means more human resources to support civic and social infrastructure, as well as a tax base to support ongoing community maintenance. Interestingly, people rarely think about the number of households. Households are important because that is the unit that continues to pay property taxes and support infrastructure in our communities. Figure 2 shows that the change in households has been differing significantly from population trends. For example, in our town/rural mix counties, population has declined by 2%, yet the number of households has increased by 30%. And this is the case for all other counties. Even in our entirely rural counties, which have experienced a group decline of 32% in population, the number of households has only declined by 10%.
Figure 2: Since 1970, the number of households has increased significantly faster than population. Even our most rural group of counties, which lost 32% of population since 1970, has only lost 10% of its households. Data: U.S. Census Bureau, Decennial Census
Figure 3 shows a map of the change in the number of households and population since 1970. It clearly shows that the change in households has been significantly more positive than the change in population, even in the northwest and southwest portions of the state.
Figure 3: There is a larger population in 2020 than in 1970 across a majority of counties in Minnesota. The declines have been focused in Southwest and Northwest Minnesota, but even here, the number of households has not dropped as much or even gone up. Data: U.S. Census Bureau, Decennial Census
The data shows that the number of people and the number of households have significantly different rates of change, because of how much the size of our households have changed over the last 50 years. Figure 4 shows that in 1970, nearly half of the households had 1 or 2 people living in them while 20% or more had 5 or more people. By 2023, those percentages have changed significantly: around 70% of households now have 1 or 2 people while not even 10% of households have 5 or more people.
Figure 4: Significantly more households have 1 or 2 people only in 2023 compared to 1970. Data: U.S. Census Bureau, Decennial Census & ACS 5-year
And this illustrates just why so many rural communities that have experienced population decline are still dealing with a housing shortage. There are fewer people in each household, yet there are more households needing housing.