The film gets this part right, but it doesn’t mention some of the pockets of strength in local real estate.
The vacancy rate for the industrial sector, including warehouses and distribution centers, in the Twin Cities is much lower than the national average even as investment in that sector booms. And home buying remains strong, especially in Minneapolis, where sale price gains this fall outpaced the broader metro. This summer, home values in the metro posted the ninth biggest gain in the nation even as values nationwide eked out only small gains, according to the oft-watched S&P Cotality Case-Shiller Index.
The city’s housing market gets a mention when Becker, the Minneapolis Times writer, says the city is dead last for housing starts. There’s a reason for that, said Nick Erickson, senior director of housing policy at Housing First Minnesota. It’s more expensive to build homes here than it is in neighboring states, or even Chicago, and local governments have stalled or blocked the construction of starter homes.
“Our housing production decline in the Twin Cities metro is far greater than we’re seeing across the country from 2021 to 2024,” Erickson said.
In the film, commercial real estate investor Erin Fitzgerald shared with Kupchella her frustration at the state of the business environment in Minneapolis. She has oriented her business around buying up distressed commercial property to convert to housing, retail or mixed-use, but she’s finding better deals in Washington, D.C., and Denver, thanks to local government incentives in those cities that help investors pay for the pricey conversions. She’s lobbied for a similar tax credit in Minnesota, adding that Mayor Frey has been an ally.
“Unfortunately he is being combatted by a City Council that has been overtaken by the DSA,” she said in an interview.