Minneapolis Rent Growth Outpaces Peers as Permits Drop

Minneapolis renters face rising costs as new multifamily construction permits fall significantly from their 2022 peak.

Updated on Oct. 15, 2026 in Apartments

Isometric editorial illustration of a skeletal steel frame of an unfinished apartment building, representing a stalled housing construction pipeline. — Minneapolis median rents have jumped nearly nine percent since 2025 as new apartment construction permits have dropped over ninety percent since 2022. AI Illustration. Upload story photo >

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Minneapolis median rents have increased 8.9 percent since 2025, while new multifamily housing permits have plummeted by 91.6 percent since the 2022 peak. These figures reflect a tightening rental market as new supply fails to keep pace with rising development costs.

Why it matters

Rising construction costs and operating expenses have made it harder to build new multifamily housing, significantly cooling the pipeline for new apartments. This shortage of new units has contributed to local rent growth outpacing the increases seen in comparable cities.

Minneapolis permitted only 300 multifamily units in 2025, representing a 91.6 percent drop from its 2022 peak. Meanwhile, construction costs have surged 30 percent since 2023, while the rental price gap between Minneapolis and comparison cities narrowed from $200 to $150.

The details

The decline in new construction is driven by a combination of surging material costs, rising operating expenses, and local regulatory requirements that impact project financial feasibility. As construction hurdles persist, investors report that potential rent stabilization policies create additional uncertainty for new developments. Consequently, Minneapolis has seen rent growth exceed the 1.8 percent average observed in comparison cities since 2025.

2019: The Minneapolis 2040 Plan passed.
2022: Multifamily housing permitting reached a peak of 3,000 units.
2023: Construction costs began a 30 percent increase from this baseline.
2025: Median rents rose 8.9 percent and permitting slowed to 300 units.

The Home Front

The current stall in multifamily permitting marks a departure from the growth objectives originally established by the Minneapolis 2040 Plan. This environment reflects a broader trend where rising construction costs and regulatory uncertainty are slowing new housing supply in urban cores.

Renters should prepare for continued upward pressure on monthly housing costs as new apartment supply remains restricted in the city. When searching for a new lease, prioritize verifying the age and ownership status of a building, as older developments may offer more predictable pricing.

The takeaway

The sharp drop in new multifamily permits suggests that apartment inventory will remain tight, keeping upward pressure on local rental rates. Renters should monitor local housing permit data and city council updates on development policies to anticipate potential changes in their neighborhood housing supply.