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Minneapolis construction projects top $1 billion, as rental housing booms

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The city of Minneapolis has topped $1 billion dollars in construction projects for the second straight year.

The city reached the milestone a month sooner than it did in 2012, which was the first year that Minneapolis reached a billion since 2000.

According to an October report published by the Minneapolis Community Planning & Economic Development, there have been 10,371 building permits issued in Minneapolis bringing the total over $1 billion.

That includes permits issued for 2,880 housing units to date and plans for 3,500-4,000 total units by year end. That would be similar to 2012 when permits were issued for 3,917 housing units.

A Star Tribune report says some of the more pricey projects include $68.1 million for A Mill Apartment Building at 315 SE E. Main St.; The Nic, located at 465 Nicollet Mall at $68.1 million; UTEC Apartment Building at 1313 SE. 5th St., $59.9 million; Stonebridge Condominium at 1102 S. 2nd St., $48.3 million; apartments at 2828 Dupont Av. S., $36.1 million.

Minnesota Business reports that even with the large increase in supply, landlords are still wanting more for rent. The report cites the Minnesota Housing Partnership that said the average cost for rent in Minneapolis is $979. The housing partnership says rents in Minneapolis are rising at the fastest rate since the early 2000's. Over the last three years average rent has increased 8.5 percent.

Minnesota is the least affordable state in the Midwest for housing, according to a May report from MPR News.

The reason for that continues to be the tight supply. An earlier Star Tribune article says the average vacancy rate across the metro fell slightly in the third quarter to 2.5 percent from 2.7 percent last year. Apartment development has been most rapidly growing in Uptown, near the University of Minnesota and downtown.

Even with the recent boom in construction, Minneapolis is still behind comparable cities like Seattle and Denver in the number of units under construction or coming on the market.

Minneapolis expects the construction boom to continue.

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