These fast-growing Des Moines metro cities broke building or construction records with developments to come

Kim Norvell
Des Moines Register

Six Des Moines metro cities broke records for the value of building permits issued in 2021, continuing a trend in the fast-growing area even amid the global pandemic. 

Altoona, Ankeny, Pleasant Hill, Urbandale, Waukee and West Des Moines set all records. Bondurant, Waukee and West Des Moines set records for new residential construction, while Ankeny and Altoona had record-setting years for commercial building, including new data centers that will make Facebook's Altoona complex its largest worldwide.

Overall, the Des Moines Register's annual review of building permits issued in 10 Des Moines metro cities during 2021 showed a chart-topping $3.3 billion in private investment even as developers dealt with supply chain delays and rising construction costs.

The investment represents about a 37% increase over 2020 in the core of an area that has been the fastest-growing Midwestern major metro since 2000, according to the U.S. Census. 

Construction continues on numerous development projects near Altoona, such as the new Facebook data centers.

The 10 cities the Register reviewed — Altoona, Ankeny, Bondurant, Clive, Des Moines, Johnston, Pleasant Hill, Urbandale, Waukee and West Des Moines — issued a total of 15,043 permits.

That doesn't include an 11th city included in the 2020 permit count and investment total: Grimes, for which figures are not yet available. As the second-fastest-growing city in Iowa after Bondurant, it has been a major target for investment

"Success begets success and the entire Des Moines metro is a strong economic region," said Ankeny City Manager David Jones. "We're very proud of our success but we’re part of an overall regional success throughout the metro."

Jones noted the headwinds — notably, the worker shortage that has sometimes made it difficult to get the supplies and skilled labor needed for construction projects.

"Workforce is an issue, don't get me wrong," he said. "But we've got a number of factors working in our advantage. I'm not surprised by the fact that investment has been strong."

More:How the Des Moines metro's booming population helped it become the 'Goldilocks' of the Midwest

New home construction numbers high

For the second year in a row, single-family new home construction soared in the Des Moines metro. 

According to the Des Moines Home Builders Association, the year ended with 3,704 single-family permits issued in the metro, a level not reached since 2005, when 3,996 homes were built in the region.

It's an 11% increase over 2020 in the 21 central Iowa communities the association tracks.

Those numbers come despite supply chain issues and rising construction costs that increased the price of a new home nationally by 18% in 2021. Windows, for example, can take 20 weeks to arrive, said Jenna Kimberley, vice president of Ankeny-based Kimberley Development and president of the Des Moines Home Builders Association. 

"Across the market we've had so many issues from lack of labor, a lot of manufacturing plants shut down, whether it was the freeze in Texas or COVID, that caused delays in production. There's a massive shortage of truck drivers," she said. "… Everything is a perfect storm of issues that are raising the cost of a home and they're adding time to the build."

Despite those struggles, thousands of residents are choosing to build or buy new homes. The Des Moines metro historically has had fewer homes available than potential buyers, and low interest rates are helping drive up demand by making it easier for shoppers to afford larger and more customized properties, Kimberley said. 

Leading the way in new home construction were Ankeny and Waukee. With a combined 1,325 permits pulled, they accounted for nearly half of all new home construction in the 10 cities reviewed by the Register. 

The 672 permits Waukee issued for single-family homes is the largest number in the city's history, smashing the previous record of 411 set in 2020. Their valuation — $219.2 million — was nearly double that year's.

"We expected 2021 to be a big year for single-family permits," Waukee Mayor Courtney Clarke said in statement. "As the housing market boomed nationally, we knew it would have implications here in Waukee."

More:Some suburban Des Moines cities grew 10 times faster than Iowa, national average, census data show

Ankeny was close behind, issuing permits for 653 single-family homes, a growth trend it has enjoyed for years. Jones attributed the investment to the city's focus on extending infrastructure like water and sewer lines to vacant lots, preparing them for development.  

According to 2020 U.S. Census, Ankeny added the most residents of any city in the metro from 2010 to 2020, increasing its population to 67,882 from 45,582, or 49%.

Homes under construction in the Harvest Ridge subdivision in Ankeny.

"Single-family residential is our bread and butter in Ankeny," Jones said. "We've had numbers larger than what we saw in 2021, but obviously we've been on a long run with this economic expansion, seeing very strong single-family numbers over the past years.

"And 2021 was a continuation of that."

Other suburban cities saw big numbers in 2021, too. With 120 issued, Johnston had its strongest year for single-family permits since 2015. 

David Wilwerding, community development director for the city, said for the first time in several years developers increased the size of the subdivisions they platted. In the past, they'd typically build on 25 or 30 lots. Last year, that number rose to 50 to 72. 

"There's been a lot of folks who had been more risk-averse, but this past year we had bigger subdivisions and more of them," Wilwerding said.

The Des Moines Home Builders Association expects 2022 to be another big year for new home construction — and that it could be even bigger if builders could get all the resources they need.

"I don’t see anything slowing this market down," Kimberley said. "We'll continue to see a lack of inventory, meaning we don't have enough homes available for sale even though builders are doing everything they can to put homes in the ground. It's a bottleneck.

"The demand is going to stay high and the cost to borrow money is still cheap and I don't see anything changing that," she said. 

Data centers account for millions in commercial growth

On the commercial side, Microsoft and Meta, formerly Facebook, data center expansions accounted for nearly one-third of the $1.6 billion in permit valuations across the metro. 

Meta, which last month announced a massive project on its Altoona data center campus, received permits for more than $211 million in construction. While the company obtained permits for construction of two new data center buildings, it also started work on retrofitting its existing buildings. 

Construction continues on numerous development projects near Altoona, such as the new Facebook data centers.

Chad Quick, Altoona economic development director, said Facebook has been a boon to a city that already enjoys name recognition with the Prairie Meadows casino, Adventureland, the metro's only Bass Pro Shops and the Outlets of Des Moines shopping mall. Construction of the data centers requires 1,000 contractors on site, and many of them have made Altoona and the Des Moines metro their home, he said. 

"It's been good for the area for a lot of different things," Quick said. 

Facebook's growth in Altoona shows no signs of slowing down. The City Council recently approved plans for a permanent, 23,000-square-foot construction building on the site to house its contractors as they build new structures and remodel existing ones. 

"I think that's kind of foreshadowing the continued investment Facebook will make in that property," Quick said. 

That investment plus several new warehouse buildings in the city "crushed" Altoona's previous commercial investment record of $274 million, set in 2019, he said. The  $306 million in commercial permits issued last year represents a nearly 12% increase. 

More:Meta wrapping up Altoona data center that is its largest globally, but more data center growth expected

Meanwhile, Microsoft's continued expansion in West Des Moines and work on Des Moines University's new 88-acre campus helped drive private investment there to more than $1 billion for the first time since 2016. 

Waukee issued the first permits for the KeeTown Loop, a $100 million development centered on a 3,000-seat performance venue to be operated by Live Nation Entertainment. Ankeny, where there was record-setting commercial growth, issued permits for an Amazon delivery center, a new headquarters for the Pet Parents online pet products company and a $38 million expansion of Perishable Distributors of Iowa, a subsidiary of Hy-Vee. 

"We really had a little bit of everything," said Jones, the city manager. "When you look at the projects that were permitted in '21, we had some retail commercial, industrial, new buildings, expansions of employers locating into Ankeny and over $95 million in additions and alterations. These are existing businesses and the existing tax base reinvesting in our community."

Perhaps surprisingly, in the COVID-19 era when many office expansion plans are on hold, Johnston issued permits for new office buildings for environmental planning company Impact 7G; Underground Magnetics, a maker of drilling technology; and Setpoint Mechanical, which sells and service heating and cooling systems for commercial, industrial and institutional buildings.

"We weren't expecting that," Wilwerding said.

Construction continues on numerous development projects near Altoona, such as the new Facebook data centers.

Industrial, warehouse development will continue in 2022

The last two years have seen a surge in the metro's warehouse and manufacturing space as e-commerce companies looked for new locations and businesses contract with third-party logistics companies.

Marcus Pitts, managing director at JLL Des Moines, which tracks the market, said 1.2 million square feet of industrial space was built in 2021, with an additional 2.7 million square feet currently under construction. Developers choose the metro for its access to two of the nation's busiest highways, Interstates 35 and 80.

"People want their products quicker, and that's across the board, whether you're at home ordering from Amazon or you're a business ordering an x-y-z part," Pitts said. 

More:New facility could make Des Moines a rail shipping hub, cutting transportation costs, supply chain disruptions

JLL expects any new warehouse to be leased quickly, either as it's being built or immediately upon completion. Currently, there's only one unclaimed warehouse available for any company seeking 100,000 square feet or more of space, Pitts said. 

"There's a pent-up demand for the product," he said. 

Kim Norvell covers growth and development for the Register. Reach her at knorvell@dmreg.com or 515-284-8259. Follow her on Twitter @KimNorvellDMR.