Across the state, growing ranks of renter households are facing an increasingly challenging housing market with rising rents and declining vacancy rates. Current owners of unsubsidized rental properties have few tools to preserve and improve aging properties to maintain homes for current and future tenants. New construction of rental units has skewed towards higher-end homes, leaving production gaps for lower income rental housing. Because the market does not produce enough housing across the housing continuum, the preservation of existing housing is often the most cost-effective way to provide affordable housing. In this spotlight map series, Minnesota Housing Partnership identifies areas of significant property sales activity and notable clustering of market rate units renting at or under 60% of AMI in Greater Minnesota; we also identify additional layers of affordability in the unsubsidized multi-family rental markets within the 7 County Metro. 

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NOAH in Greater Minnesota, 2021:

Hot Spots of NOAH Buildings

Market Rate Units with Rents Affordable at or under 60% AMI

This map illustrates areas that contain a significant amount of multifamily, market rate buildings with units that rent at or below 60% of AMI. The St. Cloud metro area (Stearns, Benton, Sherburne, and Wright counties) appears most vividly as a pronounced and dense market for NOAH multifamily buildings in Greater Minnesota. Fargo-Moorhead, Duluth, Mankato, and Rochester also appear as areas containing substantial NOAH. 

Hot Spots of Multifamily Property Sales

This map displays significant clustering of multifamily market property sales across the state, excluding the 7-county metro. The predominant hot spots appear in the St. Cloud regional area (Stearns, Benton, Sherburne, and Wright counties), the Rochester metro area, and the Moorhead-Fargo metro area. Meanwhile, other metro areas like Duluth and Mankato have a less vivid presence of property sales. Smaller cities like Owatonna, Faribault, and Willmar have a higher-than-expected number of sales taking place, whereas the larger Grand Forks metro area does not appear as a hotspot for property sales. 

When there are hotspots in multifamily property sales or significant changes in ownership, new property owners may make upgrades to reposition the units for residents with higher income. Property sales can be a strong driver for rent increases, which could make NOAH buildings unexpectedly unaffordable to long-term residents. 

NOAH in the 7-County Metro 2021:

The following maps illustrate multifamily, market rate buildings with rent that is affordable at 30, 50, 60 and 80% of area median income. For low and moderate income renters, even slight increases in rent can be significant. Thousands of households earning under 60% of the area median income (AMI) — for instance, a family of four earning under $55,860 annually — are able to call Minnesota home by renting in unsubsidized apartments in the private market. Unsubsidized units that are affordable to these residents are often referred to as naturally occurring affordable housing (NOAH). 

Units renting at 50% of AMI

Units renting at 60% of AMI

Units renting at 80% of AMI

Units on the borderline of affordability to those making 60% of AMI or less

Presented here are units that contain rents 5% below or above 60% AMI; these units could easily be lost (i.e. no longer affordable to those at the 60% AMI income threshold) due to slight rent increases.

Market Rate Units with Rents Affordable at or under 60% AMI

Percentage of units renting at 60% AMI within a multifamily building