Minneapolis-St. Paul Multifamily Market Report
Rent Control Quickly Reshuffles Development in the Twin Cities;
Downtown Makes Headway
Builders react to rent control. In November 2021, voters passed legislation to cap annual rent increases at 3 percent in St. Paul, one of the strictest ordinances in the nation as it applies to new construction. In response, building permits in the city plummeted by more than 80 percent during the November through January period, according to the U.S. Department of Housing and Urban Development. Just as many builders have turned away from St. Paul, they have ramped up construction plans in other parts of the Twin Cities. Multifamily permits in Minneapolis climbed more than 65 percent during that same span. An additional 11,000-plus units are already underway in the market, excluding St. Paul. Push back from developers and operators prompted a senate bill, aiming to retroactively overturn the measure, but the policy remained in place as of March.