Property values in Minneapolis and the surrounding metro area have been rising rapidly for the past several years, and there’s little evidence that the trend will stop anytime soon. Properties are on the market now for a matter of days (or even hours). Multiple buyers often end up in bidding wars at prices which far exceed the original asking price. As the Star Tribune noted in a recent article:
The most severe shortage is for houses priced at less than $300,000, the ones sought by first-time buyers and retirees who are downsizing.
Of course, rising housing prices impact renters as well as those looking to buy. More people are moving to Minneapolis every day, whether renter or homeowner, and they want to live in desirable neighborhoods like mine (Whittier). My neighborhood features sought-after amenities like bike trails, high-frequency transit, close access to downtown, and a ton of great restaurants on Eat Street. But one “problem” is that people are moving here whether or not there are new apartments for them to live in.
Largely due to increased demand, rental prices are also quickly rising throughout the city, with the average rent for a 1BR in Minneapolis topping $1,000/mo last year. In the Whittier neighborhood, my rent was $650/mo when I moved back here in 2012. Earlier this month, I was given the option to switch to a month-to-month lease for $825/mo. That’s an increase of $175/mo in just four years. I have no doubt that someone will happily pay $825/mo to live in my 600 square-foot apartment inside an old brownstone building.
I know I’m not the only one feeling the squeeze of higher rents. I live in a great location and someone else is probably willing to pay more for it than I am. But it’s not the stereotypical gentrification scenario that’s pushing renters like myself out of the neighborhood. Instead, it’s the lack of available housing which drives prices upward.
Lowry Hill East and New Apartments
Nowhere is the upward trend on property values more apparent than in the Lowry Hill East neighborhood, where land values often exceed the value of the structure on the property. One recent example is at 2008 Bryant Ave S., where a developer purchased a duplex for $275,000 near Franklin and Hennepin for the purpose of tearing it down to build a 10-unit apartment building. Nearby neighbors showed up at the Minneapolis Zoning and Planning Committee to rail against the project:
Despite my familiarity with the neighborhood, I was surprised by the amount of vitriol demonstrated in this public hearing, not only against this small apartment building but also the City of Minneapolis. This particular project creates much-needed “missing middle” housing, replacing a duplex with a 10-unit apartment building. This is the type of small-scaled infill which has been sorely lacking in a desirable neighborhood which has resisted developments for over 40 years.
The developers of 2008 Bryant have also been buying other properties in this neighborhood, with the intent of building multi-unit apartments on them. I have a feeling that many of the homeowners (and yes, it was exclusively homeowners) who showed up to speak against this project are not feeling the pinch of a tight rental market.
Speaking to MinnPost, Nick Magrino of the Planning Commission (and somewhat more prestigiously, streets.mn) said this about the developers of 2008 Bryant: “They’re pretty much the only people who are doing that small infill on any kind of scale. They have several projects going on where they’re building four- or 10-unit buildings, and not a lot of people do that.”
As in the Whittier neighborhood, there are many factors driving Lowry Hill East’s high property values even higher. This area has some of the best transit infrastructure in all of Minneapolis. Metro Transit Routes 2, 4, 6, 17, and 21 all connect this area with other parts of the city, and the 113 and 114 connect Hennepin and Lyndale Avenues to the U of M campus. The area has walkable access to several lakes, multiple commercial corridors, the Midtown Greenway, and relatively low crime rates. It’s also just a mile from downtown Minneapolis.
Luxury Living
Many who showed up to speak against this apartment project are nearby homeowners, who obviously have no use for an apartment building since they do not rent. Many of them have invested a lot of money to live in large single-family homes in this neighborhood. That’s fine, as a diversity of housing stock is healthy for a neighborhood.
But when a single-family home is on a lot where many people could live but do not, we need to acknowledge this fact: amid the cries of gentrification from well off homeowners, it’s these houses, not new apartments, which are luxury housing. It is a luxury to live in a 6-bedroom, 3-bathroom 3,000 square foot house, especially one that is close to downtown and in a safe and walkable neighborhood. I don’t begrudge it, and there’s nothing wrong with it. But it should be acknowledged.
While the Zoning and Planning Committee decided to move forward on this project, there will be opposition to similar projects by these same homeowners, who aim to keep multi-unit rental housing out of their community. The City of Minneapolis cannot allow small groups of homeowners to shut out projects that benefit renters. Uptown has some great amenities, and by building, we allow more people to enjoy them.