The dearth of condominium development in the Twin Cities is not a new story. On Nov. 17, 2013, the Star Tribune ran an article titled, “Condo conundrum: Lots of demand, not enough building.” On Aug. 9, 2015, an online article was published on StreetsMN titled, “Are Minnesota’s Construction Defect Laws Causing a Condo Shortage?” On Sept. 4, 2015, MinnPost ran an article titled, “Why developers in Minneapolis love apartment complexes (and hate condos).” The more interesting story is why?
There are three primary and intertwined reasons for the current lack of condominium development in our market: (1) developers and contractors are afraid of the litigation risk; (2) developers and contractors often have difficulty obtaining financing due to the higher volume of litigation in this area; and (3) due to the first two factors, developers and contractors generally deem condominium projects less profitable than apartment developments. The good news for those of us who desire more condominiums in our market is that there are steps developers and contractors can take to significantly mitigate, if not eviscerate, their risk. Read more.