Minneapolis approves more than $1 billion in construction for fifth straight year
20 January 2017
Last year was the fifth consecutive year in which Minneapolis approved more than $1 billion in building permits, a result of the city’s dynamic economy.
The numbers — released by the city’s Community Planning and Economic Development department — are tied to several factors, including a string of stadium projects, a strong housing market and development along transit lines.
The city finished 2016 with almost $1.8 billion in approved construction, an increase of nearly $40 million from the previous year. It was also the city’s second-highest total since 2000, the last time Minneapolis reached $1 billion before the current stretch.
Above all, Minneapolis is a place where people want to live and work, said city Director of Development Services Steve Poor.“The five year run is really unprecedented,” Poor said. “It’s exciting.”
He said the construction of Target Field and U.S. Bank Stadium led to the spike in permit valuations that pushed 2014’s total over $2 billion, and the effects are still taking root downtown.
The new stadiums and anticipation for the 2018 Super Bowl have been catalysts for other development in the area, particularly lodging.“We’ve had a lot of hotel construction,” Poor said. “You’ll continue to see those coattails from developments for the next few years.”
Specific data on University of Minnesota-area permit approvals were not immediately available, but the impact of projects like the Green Line light rail are visible on campus.
Transit systems like the Green Line tend to rejuvenate property values along their routes and inspire developers to take advantage of the traffic they create, said University of Minnesota professor Ed Goetz, who leads the school’s Center for Urban and Regional Affairs. For example, a new 27-story apartment complex on Washington Avenue is being marketed toward professionals who work downtown, which connects to campus through the Green Line.
Goetz added that Minneapolis is rebounding well from last decade’s housing recession, and Mayor Betsy Hodges has made it clear that she wants to see economic growth during her time in office.
“All in all, it’s very good news for the city,” Goetz said. “It reflects the actions of the city really trying to make itself attractive to private sector investment.”Developers have also nabbed previously undervalued vacant lots, particularly in the North Loop.
Poor said that development has been accompanied by strong trends in home and apartment construction as more people move into the city.
“Minneapolis is a very desirable place to live and work,” Poor said.
It’s unclear how long the $1 billion streak will last. Goetz predicts that the pace of construction will slow slightly in coming years, but it won’t suddenly drop off.“It’s a good thing while it lasts, but I don’t think it will last forever,” Goetz said.
That doesn’t mean Minneapolis will stop experiencing the effects of the construction wave. Poor said the investments happening now will pave the way for more building.
“When these projects are proposed, it’s about a year or two before they go online,” Poor said. “The development we reported at the end of 2016 will carry over into 2017 and 2018 in terms of construction.”