Market Watch Issue #8: Mankato, Moorhead & St. Cloud
Across the state, growing ranks of renter households are facing an increasingly challenging housing market with rising rents and declining vacancy rates—a problem which has been exacerbated by the impacts of COVID-19. Current owners of unsubsidized rental properties lack the tools to preserve and improve aging properties necessary to maintain homes for current and future tenants.
MHP has published this research series tracking key trends in the unsubsidized multifamily rental markets across the state. In the eighth report, MHP, in partnership with Greater Minnesota Housing Fund, tracks trends in the rental markets of Mankato, Moorhead, and St. Cloud.
For the purposes of this report, naturally occurring affordable housing, or NOAH, refers to unsubsidized properties that have rents that are affordable to households at 60% of the area median income (AMI). Because these properties are not subsidized, owners are not required to keep rents affordable to any particular income; rents may change because of the sale of the property, improvements to the property, changes in market conditions, or other owner decisions.
Heat Map for Naturally Occurring Affordable Housing in Greater Minnesota
A heat map indicates statistically significant clustering of an event, rather than total count of an event. This illustrates areas that contain a significant amount of multifamily, market rate buildings with units that rent at or under 60% of AMI.
Key Research Findings Include:
➣ In Mankato, Moorhead, and St. Cloud, an average renter earns less than half of the annual income that homeowners do. Black, Indigenous and people of color, or BIPOC, households are disproportionately renters, and thus most adversely impacted by lack of affordable rental housing.
➣ The majority of NOAH units in the St. Cloud metro area are one-bedrooms located in Class C buildings. With most NOAH units limited in size, many large families at 60% AMI may not be able to find adequately-sized, quality rental homes in St. Cloud.
➣ NOAH units in the Mankato metro area are more likely to be located in medium to large buildings, averaging 57 units, which is larger than the average size for the state. To preserve NOAH properties in Mankato, financing tools and policies should be tailored to NOAH properties of this size.
➣ The vast majority of low-income households in each metro area studied are cost burdened and housing insecure, reducing spending on necessities like food, medicine, and child care in order to pay the rent. Cost burdened renters, especially those with lower incomes, are likely to be residents of NOAH properties and unprotected from market changes to their rent.
NOAH: Market Rate Properties with Units Renting at or Below 60% of AMI
click to open full-sized pdfs
DATA SOURCE: Unless otherwise noted, data in this report comes from CoStar, a national commercial real estate database that directly sources property management to track multifamily properties with four or more units. This data (accessed in February 2022) includes 704 market rate, existing multifamily properties in the St. Cloud, Mankato and Moorhead Metropolitan Statistical Areas (MSAs). This report analyzes data for approximately 25,987 unsubsidized rental units in properties with 4 or more units, excluding those that are currently under construction or renovation.
RENT DATA: CoStar provides average, rather than median, rent data. Of the approximately 704 unsubsidized rental properties tracked by CoStar and included in this analysis, 58% include rent data. All rents are adjusted for inflation.
This report was published in May 2022, with data analysis, writing and mapping by Gabriela Norton, Research Manager at Minnesota Housing Partnership, and graphics and design by Brian Muhs, Communications and Engagement Associate.
Questions about data? Contact gabriela.norton(at)mhponline.org. Media inquiries? Contact jenny.jones(at)mhponline.org.