Residential building permits in the Twin Cities tumbled in February

After a strong January, housing construction in the Twin Cities metro tumbled last month.

During February, home builders in the metro were issued 460 permits to build 698 units, according to a monthly report from Housing First Minnesota, a trade group that represents residential builders.

That was a 15% decline in total permits compared with last year and a 24% decline in total units — the fewest for any February in seven years.

"The slight slowdown we are seeing in the permit numbers reflects the challenging home construction environment, not the demand for housing, which remains overwhelmingly strong," said James Julkowski, president of Housing First Minnesota.

"Our housing market is in dire need of new homes, and unfortunately the homebuilding environment in the Twin Cities is not one that makes this easy to do," he added.

Multi-family construction was down the most. Builders requested enough permits to build 266 units, mostly market-rate rentals. Builders planned to build 432 single-family houses, a 17% decline over last year.

Apartment construction tends to be volatile from month to month, but there was a significant decline in large projects with more than 17 units during February.

As building sites that can accommodate larger buildings dwindle, a growing number of developers are trying to cater to renters who want to live in smaller buildings.

"It was important to us for the Maker to provide an alternative to the standard rentals being built today," says Eli Zmira, lead designer and associate at DJR Architecture. "The Maker is the first new development built in northeast Minneapolis to allow for both luxury urban family living and a private home office in an area where most rentals are massive buildings with a majority of small single units."

All of the units have three bedrooms. Four of the seven have a private office or flexible workspace with a separate entrance, enabling renters in the building to operate a business.