'Fewer options, higher rents': Minnesota rental market snapshot - Bring Me The News

'Fewer options, higher rents': Minnesota rental market snapshot

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There's a downside to Minnesota's robust economy and low jobless rate: Too many people seeking housing created a tight rental market that shows little sign of loosening.

In the Twin Cities metro area, fourth quarter figures show vacancy rates stood at 2.9 percent, up slightly from a year prior, MPR News reports.

Over the same period, average monthly rent rose 4 percent.

That means "fewer options and higher rents" for people looking for housing, according to the story.

The story also said the Twin Cities saw an addition of 4,470 units in 2014 and a real estate advisory company predicted another 3,500 to be move-in ready this year.

And more people are renting than buying.

The National Association of Realtors found the number of renter households in the Twin Cities rose 17.6 percent in the five years after the recession ended in mid-2009. The number of owner households dropped 12 percent in the same time period.

Lack of housing across the state

The low vacancy rate is not just a problem in the Twin Cities.

On Sunday, the Star Tribune published a story on the lack of rental housing in Worthington, noting that it's just one community where "workforce housing is in short supply." The community has jobs at the busy JBS pork processing plant – but a shortage of rental housing there means many workers have long daily commutes.

The story went on to say that the city of Duluth needs another 3,552 rental units by 2020, according to estimates from the Greater Minnesota Partnership. Mankato could use another 1,000 places to live. Olmsted County needs 2,894 more in the next five years.

Earlier this month, KTTC reported Rochester is seeing a high demand for affordable housing as work on the city's Destination Medical Center draws new employees to the area.

"Over the next five years, Olmsted County leaders have the enormous task of creating thousands of homes, " the station's story noted.

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