Mar 17, 2022 - Real Estate

Dinkytown grows up

Cranes at a Dinkytown construction site

A 308-unit development under construction in Dinkytown. Photo Nick Halter/Axios

A 15-year boom around the University of Minnesota has reached new heights this spring as a massive influx of construction changes the look and feel of Dinkytown.

Why it matters: The new housing is allowing more students to live near campus and making the U more competitive in attracting prospective Gophers.

  • Plus, many of these new apartments offer more security than other options in the area. Some are even staffed with guards.

Driving the news: Construction is underway on a pair of large projects — a 308-unit redevelopment of the former McDonald's and Dinkytown Liquors site, and a 274-unit redevelopment of the former Wilderness Inquiry site, among others.

  • Developers have already pitched separate 16- and 17-story towers that would bring another 1,000 units.

What they're saying: "The U's reputation 30-40 years ago was a commuter school, but that's really changed a lot with the building of more dorms on campus and the addition of all these other units nearby," said Myron Frans, the university's CFO and COO.

  • "It really has created this sense of university community that I think adds to the atmosphere," he added.

Yes, but: The development has displaced some beloved businesses around the U, like Big 10, Village Wok, Dinkytown Liquors, Pagoda and McDonald's, the last of which was a rowdy late night spot for many alumni.

  • The good news: McDonald's will re-open in a new development, according to the Minnesota Daily.

The intrigue: Is there really a demand for all this new student housing?

  • Kelly Doran developed – and then sold — six U-area student housing buildings in the early 2010s.
  • "When we were looking at (the U back then) we came to the conclusion that the University of Minnesota was lagging behind its peer group of mainly other Big 10 schools in the type and quality and variety of housing," he said.
  • "The university has always been gauged as a good college but it's in the land of the frozen tundra and it had sh--ty housing. How do you get the best and the brightest when they're looking at the whole package of where to go to college?"

Between the lines: According to advertised rents and recent U graduates, a room in one of the new apartments could cost $200 or $300 more a month than a room in an old house.

  • But housing costs, Doran said, aren't rising as fast as tuition.
  • And of course many students are doing with rent increases what they already do with tuition increases — adding it to their debt.

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