April 23, 2024
Finance

Minneapolis, Rochester led the way in 2023 housing permits


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The words YEAR IN REVIEW written in vintage letterpress typeSingle-family construction in the Twin Cities and beyond came on strong during the second half of 2023, but multifamily continued fall behind last year’s pace amid challenges in the capital markets, according to permit data.

Through November, cities in the 13-county metro area plus Rochester permitted 10,976 new housing units this year, down 40% percent from 2022, according to the Keystone Report.

After a slow start, single-family construction rallied and ended the year just 2% behind the 2022 numbers. Multifamily was a different story, as planned units were down 47% from the same period in 2022.

As measured by planned units, Minneapolis led the metro area for the second year in a row, followed by Rochester and Rosemount. Falling out of the Top 10 this year are Edina, Minnetonka, St. Louis Park, and New Richmond, Wisconsin.

Here’s the complete Top 10 list for 2023 (through November unless otherwise noted). (Sources: the Keystone Report and the city of St. Paul):

1. Minneapolis (1,356 new housing units permitted). Minneapolis easily had the top spot for the second year in a row. However, planned units were down sharply from last year, when the city permitted 4,348 new homes.

2. Rochester (953 new units). Rochester moves up from the No. 4 spot in 2022. More construction is on the way. In October, Finance & Commerce reported that North Rock Real Estate’s proposed Valleyhigh Development could eventually bring 850 new homes to a 75-acre farm site at Valleyhigh Road and 50th Avenue in northwest Rochester.

3. Rosemount (850 new units). Rosemount didn’t make the top 10 last year. But look for more growth to come. The Amber Fields site in Rosemount is expected to sprout 2,000 new housing units at full build-out.

4. St. Paul (795 units permitted through the third quarter). The unit mix includes 739 multifamily, 51 single-family, and five duplexes, according to the city. St. Paul was No. 2 on last year’s list. In general, the city’s rent-control policy isn’t popular with builders and developers. But big sites like Highland Bridge and The Heights offer ample opportunities for new housing.

5. Lakeville (690 new units). Homebuilding activity was down from last year, when the city permitted 768 new homes. Even so, Lakeville moved up from its No. 7 position on the 2022 list.

6. Maple Grove (676 new units). As measured by planned units, Maple Grove saw a big jump in homebuilding. In 2022, the city the city permitted 377 new homes and failed to make the Top 10.

7. Woodbury (437 new units). This east metro suburb permitted 235 fewer homes than it did last year. Even so, Woodbury moved up a spot from its No. 8 position in 2022.

8. Shakopee (344 new units). Shakopee cracked the Top 10 after failing to make the cut a year ago. In April, Finance & Commerce reported that DR Horton wants to build 601 new homes on the southwestern edge of town.

9. Blaine (300 new units). Blaine moved up one spot from its 2022 ranking.

10. St. Michael (291 new units). St. Michael continues to draw interest. As previously reported, St. Michael Developments LLC has completed city entitlements for a 128-unit apartment building at the southwest corner of Lincoln Drive and Hillcrest Drive Northeast in the city.



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