Jan 25, 2022 - News

Builders didn't shy away from Minneapolis and St. Paul in 2021

Data: City of Minneapolis; Chart: Jacque Schrag/Axios

The cities of Minneapolis and St. Paul remained popular places for real estate investment in 2021.

Why it matters: Both cities were battered by the pandemic and damaged by the 2020 riots — and now they're seeing a rise in homicides and carjackings. But developers continue to bet on their long-term health.

State of play: Minneapolis permitted $1.63 billion worth of construction in 2021, which is down about 6% compared to 2019, but on par with the five-year average between 2016 and 2020.

  • In St. Paul, the value of permitted construction projects hit $753 million in 2021.

Of note: St. Paul has typically measured building permits a little differently, but the total value of commercial, institutional and mixed-use projects rose 22% in 2021, compared to 2020.

Driving the trend: Apartment construction continues to lead the way.

  • In Minneapolis, seven of the 10 largest projects were multifamily and three new downtown towers will be under construction this year.

Yes, but: Several developers have delayed or paused projects in St. Paul due to a new and strict rent control ordinance, including Ryan Cos. which has halted some of its Highland Bridge construction.

  • The Minneapolis City Council will debate a potential rent control policy this year, though the mayor and council president have not supported a strict ordinance.

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