Minneapolis' downtown development stayed hot in 2020
The city of Minneapolis permitted just shy of $1.8 billion in construction projects in 2020.
- The big picture: That's right on par with the past five years, which have been some of the hottest in the city's history.
Why it matters: The narrative that a summer of civil unrest and concerns about high-density living — even after the pandemic — would scare residents and developers out of the city isn't bearing out.
- From luxury hotels and condos to low-income housing, developers kept building at a healthy clip.
Yes, but: Developers who had secured financing for projects pre-COVID-19 were not going to throw away months — in some cases, years — of work, so they broke ground despite the uncertainty.
The state of play: The city is expecting another strong year of private construction in 2021, according to Andrea Brennan, Minneapolis' interim director of planning and economic development.
The evidence, driven by historically low interest rates and cash-flush investors:
- There's been steady activity at the Minneapolis Planning Commission for new projects. Urban planner Alex Schieferdecker, who has been tracking the commission for years, said it approved the most housing units in a decade during 2020.
- Developers can't build housing fast enough to keep pace with the city's growing population. Seven of the 10 biggest Minneapolis projects in 2020 were primarily housing.
- A public meeting last week to discuss the city's new building guidelines for its controversial 2040 Plan drew more than 100 developers, prompting Brennan's staff to schedule an additional meeting.
What's next: Expect the development to spread away from downtown, according to Brennan. The 2040 Plan is opening up more corridors for denser and taller projects — and virtually every city lot is zoned to allow triplexes.
- "That shift will continue as we see more interest in smaller and mid-scale infill development," Brennan said.
Worth noting: Building permits in St. Paul for 2020 totaled $397 million. The city averaged about $450 million annually between 2015 and 2019.
This story first appeared in the Axios Twin Cities newsletter, designed to help readers get smarter, faster on the most consequential news unfolding in their own backyard.
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