Rochester residents may soon see a more diverse array of rental housing after a City Council vote Monday night to approve a new subdivision for 187 townhouses.
The townhouses would be built by Norsq Cos. and North Shore Development Partners at the northeast corner of 41st Street Northwest and Arboretum Drive Northwest, according to public documents.
The project faces more City Council votes. Monday’s vote approved the creation of the subdivision, not the final plats. Jeff Koch, the founder of Norsq, said the group aims to start the project late in the fall. He expects the project will finish sometime in the first half of 2026.
Potential renters would have an option between a two- and three-bedroom unit. The development would also include amenities, such as a clubhouse with a pet-wash, a golf simulator, a fitness center, a pool and pickleball courts.
Koch said 10% of the townhouses would be pre-furnished as a part of a partnership with Mayo Clinic.
“We’re working on some unique partnerships with Mayo to actually furnish some of the units, as they have patients that are receiving long-term care to be a place where families can rent on a month-to-month basis to give them a bit more of a home versus being in a hotel without a kitchen or amenities they appreciate,” Koch said.
No money from Mayo Clinic was given to the project, Koch said.
Asked why Wayzata-based Norsq went with a rental project instead of a for-sale one, Koch said the decision to go with rentals was made because he wants them to be “relevant” with millennials, whom he calls the primary renting demographic.
Millennials, Koch said, are forming households and looking to have a “differentiation of lifestyle versus living in an apartment.” Koch said he likes the area because of its proximity to schools and retail areas, which he hopes will entice potential younger families.
“I’d say a good portion of them do have the desire to purchase a home but interest rates today, coupled with this uptick in single-family home values and prices, especially over the last couple of years, have made it very difficult for those first-time homebuyers to be able to afford that,” Koch said.
The median sale price in May for any home, not just single-family homes, in southeast Minnesota was $299,000, a $9,000 increase over this time last year, according to a recent report from the Minnesota Realtors.
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