What really created the Minneapolis apartment boom

Minneapolis got national media attention last week for solving some of the metro area's inflation woes by building a ton of apartments in recent years.

Why it matters: Cities, states, and even President Biden want to replicate what Minneapolis did, but they'll need to look closer at what exactly happened here.

Context: There's plenty that a recent Bloomberg story got right. The region has seen strong housing construction numbers, and a big part of that growth has come in Minneapolis.

• Apartment seekers are enjoying this trend, as there are all kinds of sweet deals offering one or two months of free rent with a new lease.

Reality check: The Bloomberg story largely misidentifies what created the apartment boom, crediting the city's controversial and pioneering elimination of single-family zoning in 2018.

Be smart: The idea behind that policy, which was part of the city's 2040 comprehensive plan, is that developers would tear down or expand single-family homes and replace them with duplexes or triplexes.

• Back when it passed, plenty of homeowners were up in arms, worrying that they'd soon be surrounded by triplexes.

By the numbers: That never happened because the city has not changed its building codes to allow floor plans that make reasonable sense for a triplex.

• Less than 2% of the 7,759 new housing units permitted in Minneapolis over the last two-and-a-half years have been in two- to four-unit structures, according to U.S. Housing and Urban Development numbers analyzed by Axios.

Yes, but: That doesn't mean the 2040 plan didn't have a huge impact. It changed zoning in most major transit corridors in the city, basically allowing developers to build six-story apartment structures without having to battle with neighbors over height and density variances.

• That has led to a boom along corridors like Marshall Avenue, Lake Street, Nicollet, and Broadway.

Plus: The city eliminated parking minimums — first along transit corridors in 2015, and then citywide in 2021. Developers no longer had to spend big bucks — or dedicate big pieces of their building sites — to parking ramps or surface lots.

What's ahead: The building boom is already over. The city is on pace to permit 1,800 units this year, its lowest output since 2015, according to HUD numbers.

• There are a lot of factors at play. Interest rates and construction costs are high. There's uncertainty about the Twin Cities population trends and some developers say lenders are worried Minneapolis will adopt rent control, even though the city council effectively killed a ballot initiative in June.