Minneapolis Sees Building Boom; 2012 Projects Top $1B

Minneapolis is in the midst of a building boom, with the total value of construction projects permitted this year topping $1 billion for the first time since 2000.
 
According to 2012 permit numbers from the City of Minneapolis, the city had issued 12,161 building permits collectively worth about $1.01 billion as of Monday. The last time the city’s construction projects surpassed the $1 billion mark was in 2004, when the city permitted $1.14 billion worth of building projects.
 
In addition, the city said that it has issued more housing unit permits this year than at any time during the condo boom of the last decade. As of November 27, the city had issued building permits for 3,530 new housing units—including both single and multi-family units. That represents a 263 percent increase compared to the 972 housing units permitted last year, and a 255 percent increase from the 1,048 units permitted in 2010. The previous record for housing unit permits was achieved in 2004, when the building of 2,732 units was approved.
 
The majority of the housing units permitted this year are apartment units: 2,888 apartment units in 22 new buildings, plus 562 units added through existing building conversions and additions, the city said. Building permits were also issued for 74 new single-family homes, four townhouses, and one new duplex.
 
A number of the planned apartment units will be in downtown Minneapolis, including some at the Soo Line Apartments building at 501 Marquette Avenue South and others within the Loring Park Apartments building at 1369 Spruce Place—a $73.1 million proposed luxury apartment tower, which is the biggest among all construction projects approved this year in terms of value.
 
The Whole Foods and 222 Hennepin Apartments project ($45.2 million), the Orchestra Hall addition ($39.5 million), the Soo Line Apartments ($30.1 million), and an addition to the Children’s Hospitals and Clinics of Minnesota’s Minneapolis campus ($29.1 million) rounded out this year’s top five projects in terms of value.
 
According to the Star Tribune, Minneapolis’ boom in apartment construction is fueled by urban-loving Millennials as well as Baby Boomers who are downsizing their homes. Since the beginning of the recession, more people are reportedly choosing to rent, and luxury apartments—with amenities such as rooftop decks, pools, fitness centers, yoga studios, and dog runs—appear to be a popular choice among both developers and renters.
 
“Apartments are an interesting phenomenon,” Mark Stenglein, CEO of the Downtown Council, told the Minneapolis newspaper. “There’s a reason why there’s such interest in rentals—nobody ever thought they’d ever lose money on their house, but we’ve seen that’s not always true.”
 
Stenglein said that the development boom is also due to an improving economy and developers’ ability to access capital to fuel projects. Another factor contributing to building in urban areas is the growing popularity of mass transit, including both existing light-rail service and the planned Central Corridor light-rail line that will connect downtown Minneapolis with St. Paul, Stenglein told the Star Tribune.