Construction continued Monday on the Bryk on Broadway building, a mixed-use housing complex in downtown Rochester. Local officials want to attract more housing options such Bryk, which will add 180 housing units and 7,500 square feet of commercial and retail space when it’s completed later this year. (Trey Mewes, Star Tribune/The Minnesota Star Tribune)

ROCHESTER — With a tight market and a community poised for massive growth over the next few years, the Rochester area is ramping up efforts to build more — and more affordable — housing.

Earlier this month, the Rochester City Council approved changes to the city's zoning codes designed to expand areas of the city where housing could be built as well as reduce requirements on multifamily projects.

That includes rezoning commercial districts to allow mixed-use housing, reducing minimum lot sizes for residential districts other than single-family housing from 5,000 square feet to 3,000 square feet and removing density limits and minimum parking requirements on multifamily housing.

The changes also cut down on public hearings for any project in development in an effort to streamline the development process. John Eischen of the Rochester Area Builders trade group noted that projects take about 18 months from start to finish and costs only increase the longer a project drags on.

Dubbed the unified development code, the changes go into effect next year.

In reducing minimum lot sizes and encouraging multifamily housing, Rochester joins a growing number of cities in Minnesota and across the country looking to make housing more affordable to all and more equitable for residents of color.

In Olmsted County, 77% of homes are occupied by the people who own them. At the same time, just 22% of Black families in Olmsted County own the housing they live in. About three-fourths of Olmsted County residents live in Rochester.

Single-family zoning makes up about 52% of the land in Rochester, with multifamily zoning only 18%. Under the unified development code, multifamily zoning would increase to about 28% of land within the city.

While Rochester isn't looking to eliminate single-family zoning like Minneapolis did, local officials say they're emphasizing a variety of housing to offer to people moving into the community.

"We're not going to tell you how many units the market can support," said Ryan Yetzer, the city's Community Development Deputy Director. "We'll let the market determine that."

A 2020 Olmsted County housing study forecast 18,000 more housing units would be needed by 2030, with about 14,000 needed in Rochester alone.

Rochester needs to step up its housing development to meet that forecast. During the past five years, Rochester has added about 5,600 housing units.

Almost 3,900 of those units were apartments and other kinds of multifamily housing, with another 1,300 coming from single-family housing and more than 300 from townhouses.

Rochester and Olmsted County designed several programs in recent years to encourage more housing on a smaller scale.

The city put aside $500,000 in federal aid earlier this year to reimburse certain city permit fees on houses that cost $350,000 or less to build. City officials are also discussing a pilot program for accessory dwelling units — secondary living spaces on lots that homeowners could rent out or use for other family members.

Olmsted County started a forgivable-loan program last fall using $5 million in federal aid to offer up to $10,000 to people who build or buy new homes.

Local builders say there's a growing market for condominiums and more apartment units, while housing officials say there could be more interest in duplexes, triplexes or fourplexes, and other types of smaller multifamily housing.

"We've really got a large group of people working on the housing supply challenge," Eischen said.

Destination Medical Center (DMC), the investment initiative looking to transform downtown Rochester into an attractive international hub, is in talks with developers on seven housing projects and five hotel projects that could add 750 to 1,000 housing units during the next few years, along with 300 to 500 hotel units.

Kevin Bright, DMC's director of energy and sustainability, said the group wants to add 4,000 housing units by 2030 to meet Olmsted County's forecast needs. DMC can help fund public infrastructure for future projects, but Bright said the key is encouraging housing for the area's workforce and middle-class families.

"That's really kind of the sticking point is figuring out how we can integrate affordability into these development projects as they come forward," he said.