Twin Cities homebuilding gains are held back by shortage of construction workers – Companies focus on apartments as single-family homes are ebbing

Minneapolis was once again the busiest city for builders in Minnesota.

Three months into the year, housing construction in the Twin Cities has been dominated by apartments as builders struggle to find enough workers and sites for single-family houses.

So far this year, 1,294 permits have been issued to build 3,118 units, according to data released Thursday from the Keystone Report for Housing First Minnesota.

That was a slight decline in permits, but a 400-unit increase in total volume because of the scale of the multifamily buildings that were permitted. A single permit can be issued to build more than one unit.

In March, there was a significant increase in total units — 509 permits were issued to build 1,310 units. That included 487 single-family houses, slightly fewer than last year.

This is a critical time for builders. April is usually the busiest month of the year, and orders taken now will set the pace for the rest of the year. The Parade of Homes Spring Preview, the biggest annual marketing event for local homebuilders, just ended and early indications are that attendance was robust.

“Our builders are busy right now,” said Tom Wiener, president of Housing First Minnesota. “We expect the permit numbers to rise as we get closer to summer and the more active home buying months.”

David Siegel, executive director of Housing First Minnesota, said there’s plenty of demand for new single-family houses but also a major constraint. “Our builders simply can’t build more homes with the number of workers that they have right now,” he said.

So far this year sales have far exceeded expectations, according to Sheri Rivera, sales manager for Minneapolis-based MyHomeSource. She said that during the Parade of Homes 10 to 15 groups toured the model house every weekend day. Since January the company has sold 19 houses, far more than expected.

“This price point is so in demand,” Rivera said. “And many people want to be close to the city.”

Twin Cities homebuilding gains are held back by shortage of construction workers