Senior Housing: Senior housing drives homebuilding uptick

By BRIAN JOHNSON for Finance and Commerce

With a boost from a few big senior-housing projects, Twin Cities homebuilding activity took a turn for the better last month.

During September, metro area cities issued 287 permits for 680 new housing units, up from 233 permits and 435 units in September 2009, according to the Keystone Report, which tracks housing activity in the 13-county metro.

The numbers were driven in large part by a handful of multifamily projects in four cities: Minnetonka, Minneapolis, Oak Park Heights and Elk River. Those cities collectively issued nine permits for 345 housing units, according to Keystone’s count.

The overall permit numbers from July through September of 2010 are still down a bit from the comparable period in 2009, when homebuilding was at its lowest point in years. However, the actual number of planned housing units is up slightly from 2009.

The biggest development in September is the St. Therese senior housing project, which will provide 149 units of independent living, assisted living and memory care housing in Minnetonka.

Site work for the $10 million project at Woodhill Road and Tree Street began this week.

Julie Wischnack, Minnetonka’s community-development director, said the St. Therese project has been in the works for more than a year.

“It has been kind of hanging around a while,” Wischnack said. “It’s great to see them dig dirt.”

Single-family housing is “still pretty slow” in the city, but there seems to be growing interest in residential remodeling, she said.

In Oak Park Heights, meanwhile, Green Twig LLC and Southview Senior Living are just getting started with a $15 million senior housing project at Oak Green Avenue and 58th Street.

Keystone lists that as a 54-unit project, but it actually includes 120 units of assisted living, independent living and memory care units, according to city officials and the project developer.

Market studies indicated that the Oak Park Heights location was ripe for senior housing, according to Tim Nolde, the project’s owner and developer.

The project is scheduled for completion in early September 2011, he said.

The busiest permit-issuing cities in September, as measured by planned units, were Minnetonka (one permit, 149 units), Minneapolis (five permits, 88 units), Elk River (two permits, 54 units), Oak Park Heights (one permit, 54 units), and Woodbury (30 permits, 43 units).

So far this year, the metro area has doled out 2,267 permits for 3,873 new housing units, up from 1,675 and 2,743 in the first nine months of 2009, according to Keystone.

The total value of the permits is also up: $771.79 million this year; $555.32 million last year.

However, much of that activity took place in the first half of 2010, when the federal government was offering a tax credit for new home purchases. The tax credit deal expired earlier this year.

From July through September, the metro area issued 790 permits for 1,435 planned units. The July-through-September period of 2009 saw 863 permits and 1,408 planned units, according to Keystone data.

[finance-commerce.com]

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