Minneapolis is confronting a significant housing shortage, exacerbated by a notable decline in new construction. In 2025, only 12,161 housing units were built, a sharp decrease from the over 18,000 units constructed annually between 2019 and 2022. This downturn is contributing to escalating rents and home prices, challenging the city’s reputation for housing affordability.
Both market-rate and income-restricted housing developments have fallen short of meeting demand. Developers cite high construction costs, rising interest rates, and limited rent growth as primary factors hindering new apartment projects. While single-family home production has remained relatively stable, it has not been sufficient to offset the overall decline in housing availability.
City officials and housing advocates are exploring strategies to address this issue, including policy adjustments and incentives aimed at stimulating construction and ensuring that housing remains accessible to all residents.