No slowdown in sight for single-family housing

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Single-family homebuilders did their part in July to add much-needed housing stock to the 13-county metro area, but multifamily construction activity was mixed during the month.

In July, the Twin Cities saw another double-digit increase in permits for new single-family homes, and permits are now running 45% ahead of 2020 for the year to date, according to the Keystone Report.

Local municipalities issued permits for 640 new single-family homes in July, up 10.3% from July 2020. The combined value of the single-family permits is $207.39 million, which is 13.3% higher than last year.

Multifamily permit activity varied depending on the project’s size. Permits rose nearly threefold for small multifamily projects — those with 16 or fewer units — but permitted units were down 23% among projects with 60 or more dwellings, according to Keystone.

Minneapolis accounted for much of the activity in that 60-plus category. During the past month, the city permitted three projects with a combined 258 new homes, including Yellow Tree Construction’s 122-unit apartment building at 1403 Harmon Place.

Also in Minneapolis, North Shore Construction pulled a permit for a 98-unit building at 1403 Harmon Place, and In Gauge Engineering obtained a permit for a 38-unit project at 1626 E. Lake St., according to Keystone.

On the single-family side, business is booming for builders like Todd Polifka, 2021 president of Housing First Minnesota and president of Custom One Homes in Woodbury. Polifka doesn’t see things slowing down dramatically any time soon.

But with the large volume of activity, builders are dealing with delays on the permitting, logistics and supply processes, Polifka said.

“We’re seeing permitting that would typically take anywhere from three to five weeks taking eight to 10 weeks in municipalities, and it’s definitely causing some delays and causing some pressure on just how you process through and build a home,” Polifka said.

“There are definitely products that are taking longer to get, but overall there’s plenty of buyers in the market,” Polifka added.

Though multifamily activity was generally slow in the metro area, at least one notable apartment project was permitted in St. Paul.

The Keystone Report doesn’t include St. Paul permits. But based on a database search of St. Paul building permits, the city issued permits for at least four new single-family homes and three multifamily projects in July.

Among the multifamily permits in St. Paul is a 154-unit project at 2227 University Ave. Yellow Tree Construction pulled a permit valued at $18.3 million for the project, known as University Apartments.

Designed by DJR Architecture, University Apartments is developed in partnership with Paster Development and built and managed by Yellow Tree, according to Yellow Tree’s website. The five-story building is scheduled to open in spring 2022.

Finance & Commerce reported in February that an entity related to St. Louis Park-based Paster Development paid $1.75 million for the University Apartments development site. The estimated $28 million development includes 1,200 square feet of commercial space.

The project site, just two blocks from the Raymond Station light rail stop, is within a designated Opportunity Zone.

“We’re kind of building off some momentum that’s already there, and there’s been some strong housing that’s developed over the past 10 years,” Mike Sturdivant, Paster’s vice president of development, said in February. “It has kind of an eclectic, commercial and industrial kind of feel to it. The light rail was a positive attraction for us.”

St. Paul also permitted multifamily projects with an unspecified number of units at 250 Finn St. and 2105 Marshall Ave.

RELATED: Paster closes on land deal for University Avenue rentals

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