Multifamily permits up, single-family down in May.

Byline: Brian Johnson

Builders of large apartment complexes had their hands full in May as multifamily construction activity spiraled upward for the second consecutive month on the strength of big projects in Minneapolis and Minnetonka.

But single-family building activity continued to sputter as that sector fell into negative territory for the fourth consecutive month.

In May, builders in the 13-county metro area pulled permits for 1,943 new housing units, up 119 percent from May 2018, according to the Keystone Report. That includes 1,306 multifamily units, up 458 percent, and 637 single-family houses, down 2.7 percent.

For the year to date, the metro area has seen permits for 2,153 new single-family houses, down 6.4 percent year-over-year, and 3,811 planned multifamily units, up 50 percent, according to Keystone.

Projects permitted during the month include two big apartment buildings in Minneapolis: Lennar's 335-unit second phase of the NordHaus development at 120 Fifth St. NE, and Big-D Construction's 169-unit complex at 2813 Fourth St. SE.

Minnetonka issued permits for a 262-unit project at 11001 Bren Road (Dominium), and a 168-unit building at 126 Ridgedale Drive (Stevens Construction), according to Keystone.

In St. Louis Park, Frana Cos. is underway with construction of 164 apartments at 1325 Utica Ave. S.

Herb Tousley, director of real estate programs at the University of St. Thomas, believes the market is strong enough to absorb most of those new units as long as the economy continues to churn out jobs.

"In the short run, I think, the market is going to absorb what is there," Tousley said. "Two years from now? I'm not sure. But for next year, maybe two years, I think for the most part the market will absorb them."

Single-family construction got off to a strong start this year with a 9.5 percent increase in January. Since that time, permits have been down 3 percent, 12 percent, 2 percent and 2.7 percent between February and May.

Tousley is "a little surprised" that single-family permits are still playing catch-up.

"I thought by this time it would be a little ahead of last year," he said. "We're well into the building season. We will see what happens through the summer."

John Rask, president of M/I Homes, said soggy weather and the challenge of building affordable homes may be affecting permit numbers.

"We are having a hard time delivering homes at prices people can afford," said Rask, the 2019 president of the Builders Association of...