Multifamily Boost In Twin Cities

Multifamily Boost In Twin Cities MINNEAPOLIS, MN - Residential construction activity in the Twin Cities area took a step forward in April, at least when that activity is measured by planned housing units. Last month, builders pulled 118 permits for 419 new housing units in the 13-county metro area, compared to 180 permits for 293 units during the same four-week period in April 2008, according to new data from the Keystone Report. However, the total value of last month's permits was $55.57 million, down from $62.5 million in April 2008.

And the numbers are a bit deceiving because most of the planned unit activity stemmed from two jobs: a 93-unit senior housing project in Bloomington and a 171-unit project in St. Paul, an apparent reference to the Carleton Place Lofts Phase II project on University Avenue.

Aside from those projects, construction activity was modest. The next-busiest cities in April were Brooklyn Park (eight permits, 25 units, $4.27 million), Maple Grove (15 permits, 20 units, $4.92 million) and Hugo (five permits, 20 units, $2.525 million).

Still, builders say things are slowly starting to turn around. "There are glimmers of hope in our industry now. … Even three months ago, we didn't see half of what we are seeing now as far as things starting to look up," said Mike Swanson, 2009 president of the Builders Association of the Twin Cities.

Much of what they are seeing is senior housing.

The Bloomington project, known as Village on Nine Mile Creek, will bring "catered senior living apartments" to a 7.28-acre site at 2215 West Old Shakopee Road. The developer is Greco Real Estate Development.

The current plan offers a mix of assisted living, independent and memory care units, according to the city.

Also under construction in Bloomington is the 50-unit, non-age-restricted Portland Commons apartment project at 8735 Portland Ave. S. and the 35-unit AHEPA/Penelope 35 Apartments at 10601 Beard Ave., community development director Larry Lee noted.

The city already has 1,800 senior independent living units and "developers are responding to a demand for more accessible senior-friendly housing," according to information on the city's website.

Throughout the metro area, builders are looking for "better things ahead," according to Swanson.

BATC's recent Parade of Homes, the top marketing event for new home construction in the Twin Cities, was "very successful as far as the number of people out and sales coming from that," Swanson added. "Across the board, everyone is seeing more sales."

One positive sign: the new $8,000 federal tax credit for first-time homebuyers has kick-started the sale of more than 600,000 homes across the country, Swanson said. That's a good sign for homebuilders because it enables more existing homeowners to move up to new homes, he said.

Swanson said the Twin Cities is in a better position than most other markets across the country when it comes to inventory. The Twin Cities is now at a seven-month supply of inventory; a six-month supply is considered a "balanced" market.

On the legislative front, homebuilders are asking state lawmakers to "monetize" the federal $8,000 tax credit for first-time homebuyers. The move would allow those buyers to use the tax credit as a down payment.

The request is part a wide-ranging building stimulus proposal from the Construction Jobs Coalition, which includes commercial and residential contractors and subcontractors, union leaders and local government officials, among others.

"We are guardedly optimistic that some of the things we are working on down there are going to come through," Swanson said.
Source: Finance-Commerce.com

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