Construction cranes across the Twin Cities tell the story: The region is in the midst of a building boom that's expected to produce a record number of apartments this year.
Are those units needed? Absolutely, the Metropolitan Council said.
The quasi-governmental agency released a report last week that showed the seven-county metro area experienced a 7.4 percent gain in households from 2010 to 2017, but the number of housing units rose by only 5.4 percent in the same period.
The council estimated 2017 population for the seven-county area at nearly 3.1 million, thanks to both more births than deaths and to net migration, or more people coming than leaving.
"We put our region's economic prosperity at risk if we fail to build more housing for the people who want to live in our region," Met Council Chairwoman Alene Tchourumoff said.
The housing vacancy rate in the Twin Cities is considered healthy at 5 percent. It is now 4 percent, down from 5.8 percent in 2010.
The region added more than 15,000 housing units in 2017, but it would have needed another 13,500 units to achieve a vacancy rate of 5 percent last year.
Changes in demographics and buyer/seller preferences mean the region needs a broader array of housing choices. For example, more people live alone, so there are fewer families with young children; the average household size is smaller, and there are more empty-nesters. That's a contrast to a time when baby boomers were younger, people were getting married earlier and they were having more children.
That means that while there are still plenty of large households, there's now a need for housing that's smaller, denser and closer to a variety of amenities.
The council said that throughout the broader 16-county metro area the disparity between household growth and unit production is more pronounced. And compared with peer regions elsewhere across the country, housing production in the Twin Cities area lagged behind all but San Francisco and Atlanta. The Denver, Seattle and Portland metros all fared better at keeping residential construction aligned with growth, the council said.
The report follows another one released in early June by the Met Council. It said that housing construction in 2017 was at its highest level since before the recession, and that it had returned to a 45-year average after 12 straight years below it. That was based on an analysis of municipal building permits.
Using a "net change" standard — in which housing units lost as well as those added are taken into consideration — 2017 saw a net change of 15,226 units added. That was well above the average since 2000 of 12,733 units added each year.
The council also said that the metro-area population is expected to reach 3.5 million in 2030, up 13 percent from last year.
Jim Buchta
