St. Paul is a college town. It should start acting like one.

David Schultz

St. Paul faces a serious economic development challenge. Much of the discussion has understandably focused on downtown. Revitalizing downtown matters, but it cannot be the city’s entire strategy. Nor can the city fix what is broken without building on what already works: St. Paul is overlooking an enormous economic asset hiding in plain sight: its colleges and universities.

That challenge is not just about downtown vacancies. It is an eroding tax base. Multi-family construction permits fell from more than 2,000 units in 2020 and 2021, the most since 1970, to just 404 in 2024 and 357 in 2025, a collapse a 2026 Federal Reserve Bank of Minneapolis analysis ties in part to the 2021 rent stabilization ordinance. The same analysis finds multi-family owners paid 27 percent less in property taxes in 2025 than at their 2022 peak, shifting the burden onto homeowners. St. Paul’s property tax levy has also grown considerably faster than Minneapolis’s over the past decade, per state levy records, while Census Bureau estimates show the city’s population falling from about 311,500 in 2020 to roughly 303,800 by 2023, even as the state grew. Rising taxes, a shrinking housing supply and worsening affordability are plausible contributors to that decline.

Turning that around will take more than fixing tax and housing policy. It also means building on the asset St. Paul already has. According to the City of St. Paul, approximately 58,000 students study at 11 colleges in the city, one of the highest concentrations of higher education institutions per capita among American cities, historically described as second only to Boston.

That suggests a simple economic development question: St. Paul attracts tens of thousands of young adults to the city for college. How can we turn four years of enrollment into 40 years of residency, employment, entrepreneurship and tax-base growth?

Few people think of St. Paul as a college town, and there’s a reason: think about Ithaca, Ann Arbor, Madison, Berkeley or Iowa City. Each has an identifiable college district filled with restaurants, coffee shops, bookstores, apartments and entertainment.

St. Paul is different. Its colleges are scattered across the city and embedded in neighborhoods. But that apparent disadvantage could actually be a strength.

St. Paul has always been more a city of neighborhoods than a city defined by its downtown. Colleges can serve as anchors for strengthening those neighborhoods.

A first step should be encouraging private businesses around college campuses, using zoning, small-business assistance, streetscape improvements and other incentives to attract restaurants, coffee shops, entertainment, services and retail.

St. Paul should also create a College Compact bringing the city and its colleges together around economic development, focused on graduate retention, housing, entrepreneurship, internships, workforce development and neighborhood investment.

There is a strong economic theory behind this: Harvard economist Michael Porter has emphasized the importance of economic clusters, geographic concentrations of interconnected businesses, institutions and skilled workers. Successful economies grow when these reinforce one another rather than operate independently.

Higher education is already one of St. Paul’s economic clusters. The opportunity is to use it to strengthen others.

Health care and medical technology are obvious next steps, given the region’s existing strengths. Artificial intelligence and data science offer further opportunities, with colleges coordinating programs and research while the city works to attract businesses that want access to educated workers.

Such cooperation would help the colleges too. Higher education faces significant demographic pressures as the number of traditional college-age students declines, and some institutions nationally will shrink, merge or close.

St. Paul’s colleges have as much reason as the city to make this partnership work, and can make the city itself part of what they sell prospective students.

Come here for college, and you gain access to internships and employers. Graduate here, and you gain a path to build a career and life in the city.

That also requires a housing strategy: affordable apartments and starter homes for recent graduates, then a path to single-family homes as they build careers and families, without leaving the city.

The city should also launch a “Start in St. Paul” entrepreneurship initiative, helping graduates find affordable commercial space, navigate regulations and secure financing, with colleges providing mentors and expertise.

The goal is not to encourage colleges to acquire more property; they are nonprofit institutions whose property is generally tax exempt, and higher education’s future will increasingly be online and hybrid.
Instead, St. Paul should leverage what its colleges already produce: educated people, knowledge, ideas and economic activity.

Downtown matters, but St. Paul’s economic future also lies in its neighborhoods and in the students who arrive here every year.

We already educate them here. The question is whether we can persuade them to build their futures here.
St. Paul does not need to become a college town. It needs to recognize that it already is one.
David Schultz is a professor at Hamline Universisty, and Editor-in-Chief of the Minneapolis Time.s