All over the news are reports about the rental vacancy rate in the Twin Cities hovering around 2%. When a "balanced" market is considered to have vacancy rates of 5%, this current metro situation translates to a tight rental market. But what about the rest of state? Across Minnesota, we are seeing indications that the supply of rental housing is not keeping up with demand, for all but very high income households. The problem is particularly serious in Greater Minnesota communities experiencing robust job growth.
The Twin Cities metropolitan area enjoys consistent, timely rental vacancy rate data thanks to Marquette Advisors. But the non-metro vacancy rates are not regularly tracked, except by the US Census Bureau, which provides considerably outdated data. Secondary cities often contract with research firms to do periodic housing assessment studies, but these do not enable standardized comparisons across cities, and can be outdated, too. Yet looking at the various sources available, there is a real crunch on the availability of affordable apartments across the state. This is particularly true in markets hit hard by foreclosure crisis. Below is a compilation of what we know: results from searching for any housing assessment data published since 2011, combined with anecdotal support from people working in community development across the state in markets we know are pursuing additional affordable housing.
- Rental vacancy rates are extremely low across the state. A 2013 Minnesota Housing Partnership report found that 84 of Minnesota’s 87 counties had more low-income renters than units — and nearly half would need to at least double their affordable housing stock to meet the demand.
- Housing Assessment reports in regional centers report low vacancy rates throughout Minnesota:
|
Rental Housing Vacancy Rates – Greater Minnesota |
||||
|
City |
2013 |
2012 |
2011 |
SOURCE |
|
Bemidji |
|
1.3% |
|
|
| Crookston |
2.0% |
|
|
City staff estimate |
|
Duluth |
|
4.1% |
|
|
|
Jackson |
3.9% |
|
|
|
|
Mankato |
0.7% |
|
0.0% |
|
|
Perham |
1.0% |
|
|
City staff estimate (5 vacancies out of 487 rental units) |
|
Roseau County |
|
3.0% |
|
|
|
St. Cloud |
3.8% |
|
|
|
|
Worthington |
0.0% |
|
|
|
- In Windom, large employers such as Windom Public Schools and Windom Area Hospital report that many employees must commute in from up to 40 miles away and cite a lack of housing options as the reason. Another large employer in the city, Toro cites that over one-third of its employees live outside of Windom, driving as far as 75 miles to get to work. With a growing student population, and plans to expand the hospital in the next two years, housing has become a primary concern for the region.
- In Jackson, it's a similar story. Large agricultural machinery employer AGCO has added hundreds of employees, and the vacancy rate has decreased to 3.9%. Those vacant units are all market-rate units according to the city's 2013 housing assessment, with a 0% vacancy rate for subsidized units.
- In Bemidji, because of the 1.3% rental vacancy rate, housing leaders anecdotally cite that many households who receive Section 8 vouchers cannot find available apartments in the market.
For many, renting is a necessity. But increasingly it's an appealing and strategic choice. The 2013 America's Rental Housing report from Harvard lists many reasons why singles and families may choose to rent instead of own a home: it provides freedom from home maintenance responsibilities, flexibility to relocate (more quickly and less expensively) to capitalize on new job opportunities, flexibility to secure a home without a large outlay of cash, and time to rebuild credit scores from the recession or after a foreclosure.
In sum, increased rental housing options in Greater Minnesota are needed to help these communities continue to prosper.
