Twin Cities housing construction is strong, but not keeping up with demand
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Despite the pandemic, developers built almost as many Twin Cities houses and apartments in 2020 as they did in 2019, according to preliminary numbers from the U.S. Department of Housing and Urban Development.
The big picture: The Twin Cities metro area finished 2020 with 21,421 housing permits, 54% of which were multifamily units.
Why it matters: While 2020's numbers are among the strongest ever in the Twin Cities, they aren't keeping pace with demand.
The state of play: A housing development slowdown after the Great Recession created a shortage of homes that has persisted for a dozen years.
A Governor's Task Force on Housing report in 2018 said the state needs 30,000 new housing units a year to keep up with the population.
- Of note: Only about 2,000 units were built outside of the metro in Minnesota.
"The state, and more particularly the Twin Cities region, has been under-building since the Great Recession," Libby Starling, director of community development and engagement at the Federal Reserve Bank of Minneapolis told the Minneapolis/St. Paul Business Journal late last year.
"The Great Recession had an extremely chilling effect on housing construction everywhere, and particularly in our market. It simply hasn't caught up."
Numbers:
- St. Paul had its best year in modern history in 2020, with more than 2,000 new apartments permitted.
- Minneapolis finished with nearly 3,300 new apartment permits, on pace with its five-year average but down from a high-water mark in 2019 of 4,800.
- Lakeville was the busiest suburb with 1,154 permits. Woodbury was next with 891 units. followed by Maple Grove with 764.
The bottom line: Building 21,000 housing units in a pandemic year is a good sign for the health of Twin Cities' economy, but it still isn't enough.
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.