New neighbors are moving into townhomes at 3329 Nicollet Ave. this week, where glass-door garages can double as workshops. It’s a rare 12-unit development in a city dominated by single-family homes and larger apartment buildings.
Developer Jeremy Edwards said he’s charging a bit less than other new apartments in Uptown ($1,300 for a one-bedroom unit and $2,450 for a three-bedroom unit plus garage), because he purchased vacant land from the City of Minneapolis.
“With today’s construction costs it’s very difficult to provide an affordable product without some sort of public-private partnership,” he said.
City officials are creating a “Missing Middle” pilot program that would help finance affordable units to rent or own inside new 3-20 unit buildings. The pilot stems from the Minneapolis 2040 plan, which would allow triplexes citywide and concentrate multistory development along transit corridors like Lake Street. The draft plan is not formally adopted yet. A Metropolitan Council review of the plan is currently on hold while the City of Minneapolis gathers additional information. But in the meantime, the city is moving forward with a $40 million budget allocation toward affordable housing, which includes $500,000 to launch the Missing Middle pilot.
“The reason the city is focusing on Missing Middle housing is it’s a housing type that’s really not prevalent in the city. Only about 20 percent of homes in the city actually have 3-20 units,” said Kevin Knase, Minneapolis senior project coordinator.
Knase said that since 2000, the city has lost about 15,000 units considered affordable to single people making $32,000 or families making $45,000, the area median income.
“The reason for this policy is really because we’ve been seeing increases in prices partially due to the limited housing supply that’s out there,” Knase said. “It’s really, really expensive to purchase a home in the City of Minneapolis, and part of that is there really aren’t a diversity of housing options that are out there. And not everybody necessarily wants to live in a large apartment building or wants to live in a single-family home.”
Karen Parolek, a Berkeley-based consultant who first coined the term “Missing Middle” with her husband Daniel in 2010, said the Minneapolis pilot is innovative.
“I haven’t heard about anything like this,” she said. “I think it’s pretty impressive.”
Single-family zoning gained traction across the country in the 1940s, she said, and it’s common for cities to see Missing Middle constructed prior to the 1940s and nothing after. Single-family zoning historically catered to popular car-centric development sprawl and aimed to keep renters out of single-family neighborhoods, she said.
“There was basically no place for all of these small apartment buildings to go, and so they stopped building them,” she said.
Along with zoning, Parolek said she’s glad to see Minneapolis tackling the financial challenge of Missing Middle construction.
“There are a lot of forces at work to push things big,” said developer Michael Lander, whose projects include the new 25-unit apartment and condo building home to Black Walnut Bakery at 3145 Hennepin Ave. “There is pressure to maximize — maximize zoning, maximize profitability.”
Lander said it’s hard to find land zoned right and priced right for small-scale apartments. And costs ranging from architects to building management to snow removal are similar for both large and small projects, he said. Financing for construction of a small project is also more difficult to secure, he said.
“As a developer, if I wanted to do a 100-unit building, I’d have people falling all over me to give me the money to do that,” he said. “If I wanted to build a four-unit building, or an eight-unit building, the only money is my money, or my friends and family. It’s very hard to find investors for something like that.”
“It will take us the same time and energy to go in and design a four-unit or 10-unit building than it does to design a several hundred-unit building,” said developer Drew Levin.
But with no elevator, no underground parking and no extra amenities, the cost of building a smaller project is significantly less, he said.
Levin and Daniel Perkins, known as HGTV hosts and founders of Turkey to Go, are currently proposing a three-story building with four apartments at 1721 Lagoon Ave.
“There is no better way of doing affordable than having actually inexpensive product being built,” Levin said. “They don’t require the city to spend dollars on them … but they do require the city to help out on the zoning side.”
Next to the Kitty Klinic, a single-family house at 3443 Lyndale Ave. S. could be replaced by 19 units in a four-story (42.5-foot) building. Developer Alex Brogle of South Face Creative Builders estimates rents would be $1,200-$1,500 per month on units of 425-525 square feet.
At a May 6 Lyndale Neighborhood Association meeting, some residents asked Brogle to consider building something smaller, like a fourplex.
“This is the absolute smallest I could make this building in order to be anywhere close to the numbers that the bigger developers make on the bigger buildings,” Brogle said. “I think it’s something that could be repeatable for the city in a pretty urban area. We’re pretty close to downtown here.”
The site is currently zoned R2B, a low-density two-family district, and Brogle seeks to rezone the site to R5, a high-density multifamily district. When Minneapolis 2040 zoning goes into effect, the site, located along the Lyndale Avenue transit corridor, would allow 1-4 stories by right.
Ed Janezich, chair of the Lyndale neighborhood Housing, Planning and Development committee, said the neighborhood will continue to discuss the impact of Minneapolis 2040.
“Get familiar with it. It’s going to affect our lives for the foreseeable future,” Janezich said. “It has changes in it that many of us who are longtime residents are not at ease with. It’s a change. The concept of a four-story apartment building being able to fit next door to you — that’s a brand-new concept.”
One Missing Middle proponent is AARP Minnesota, which partnered to host a walking tour last fall with Daniel Parolek.
City staff report that 40 percent of the city’s 3- or 4-bedroom multifamily units are in duplexes, making them an important housing stock for multigenerational families.
AARP MN State Director Will Phillips said there aren’t many options for downsizing seniors who want to stay in their communities.
“We really believe that creating more Missing Middle housing will help,” Phillips said.
City staff is collecting feedback on the pilot through May 22. The City Council may vote on the pilot guidelines in June, and release a request for proposals by July.