Minneapolis apartment development nosedived in 2021
The years-long boom in Minneapolis apartment development has fallen off a cliff in the last five months.
Driving the news: Developers broke ground on 891 housing units from November through March, according to preliminary U.S. Housing and Urban Development numbers.
- That's down 61% from the same period a year before, when developers broke ground on 2,278 units.
Yes, but: Housing construction in the Twin Cities metro has otherwise been on fire, with a 22% increase in the past five months compared the same period a year before.
Be smart: Blaming this trend on any one thing wouldn't be wise, considering all that has happened to our area over the past two years.
- There was a glut of apartment construction in downtown Minneapolis before the pandemic. Landlords are still trying to lease up their new buildings, lessening the immediate demand for new units.
- City Council has approved a slate of new policies for development. The biggest was an inclusionary zoning ordinance that requires developers to include affordable units in most new projects.
- Most of the reasons someone would want to live in the city were taken away by the pandemic. And last summer's riots, the Derek Chauvin trial and an increase in crime certainly didn't help.
What they're saying: Developer Kelly Doran recently finished construction on the Expo tower near St. Anthony Main and has two more multifamily sites next door. Otherwise, he's only developing the suburbs now.
- "It's a combination of a lot of stuff. .... [T]here's people [saying,] 'I'm just not going to bother with Minneapolis, let's go someplace else.' And that's certainly what we're doing."
Looking ahead: Sean Sweeney develops apartments in Minneapolis neighborhoods and told the Minneapolis/St. Paul Business Journal recently that he has concerns about the short-term problems in the city, but is bullish overall.
- "I have a long-term approach ... I'm more than happy to bet on Minneapolis over the next 30 years," he said.
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