Rental report: More apartments, few affordable units - Bring Me The News

Rental report: More apartments, few affordable units

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Although construction of new apartments in the metro area rose by 70 percent in the last year, the supply of units that are available to lower income renters continues to be extremely tight.

MPR News cites new data from the Minnesota Housing Partnership, which finds the vacancy rate for apartments that rent for under $1,000 a month is just 2.2 percent. In May, average rents in the Twin Cities topped $1,000 a month for the first time.

Chip Halbach, executive director of the Minnesota Housing Partnership, said that the supply of affordable units that rent for $650 a month or less have "declined this last decade by one half," meaning very limited options for people whose earnings are on the low end of the wage scale.

"People just do not have the incomes to pay for the housing that's out there or the new market rate housing being created," he said.

There are plenty of luxury rentals, with more on the way. On Wednesday, The Journal reported that a new $36 million 11-story building overlooking Gold Medal Park in downtown is in the works; called the Encore, it would offer units with monthly rents ranging from $1,600 to about $7,000.

Meanwhile, the 36-story LPM Apartments near Loring Park in Minneapolis is near completion, and there are new high-end rentals in downtown, Dinkytown, Uptown and St. Paul.

A report issued late last year by the Housing Partnership showed that average rents in the metro had increased by 8.5 percent over the past three years.

Halbach told MPR that demand from young professionals, empty nesters and people who are unable to qualify for a mortgage are pushing the monthly rental rates higher.

There's also an affordable housing crunch in other parts of the state. Last month, a 350-page report by Maxfield Research on behalf of the Mayo Clinic, Olmsted County and the Rochester Area Foundation showed that the vacancy rate for affordable rentals in Olmsted County stood at 1.2 percent. An official with the Minnesota Housing Fund told the Rochester Post-Bulletin that 5 percent is generally a healthy balance between supply and demand.

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