Over the past two years, the vacancy rates of rental units have increased from 2.0 - 2.5% to 6.5% today. 5% is considered a balanced rental market.
I don't know how many rental properties exist in Mpls. GVA Marquette Advisors, who calculates the vacancy rate for the metro area, surveys about 20,000 rental units in Minneapolis every quarter. A 4% increase in the vacancy rate (6.5% - 2.5%) for Mpls translates to 800 more apartments empty.
I've used figures from GVA before, too, but I read some interesting data in today's STring business section that might help put these vacancy numbers into slightly better perspective.
1. The GVA metro area vacancy rate is for an 11 (eleven) county metro area. That means the rate is distinctly different from what the rate might be in Minneapolis alone.
2. The vacancy rate is much higher than the average of 6.7% (today's number) for higher rent properties. For example, for rents above $1,100 a month, it is 12.2% in Plymouth, and 11.4% in Maple Grove and Osseo.
3. In buildings with rents below $700 a month, the vacancy rate is 5.9% for last quarter.
Bill's posting (including his question about census numbers which I snipped out) brings to mind several questions:
1. What is the per month rental dollar figure that is considered the dividing line for "affordable" or "low income" housing? Is it $700? Last time I was a landlord (2000), I rented a large one-bedroom apartment out in downtown Chaska for $500 a month.
2. Most of the new units of rental and ownership property in Minneapolis over the past year appear to be on the high-end to me, not the affordable end. Hundreds of new units along the river have opened up, and none are what I'd call affordable. So, my question is, doesn't this distort the picture? What's the real vacancy rate in Minneapolis for all rentals? For non-luxury rentals?
3. Regardless of the vacany rates in the 11-county metro area, and even what Bill is experiencing personally in his own rental business, it has been clearly demonstrated that the method that the Census Bureau uses to estimate the population of Minneapolis is dramatically flawed in under-estimating the population. The count of actual "noses" in 2000 turned up growth in Minneapolis and thousands more people than they had estimated. And there is some good evidence that they even undercounted the real people in Minneapolis. Is there any reason to believe their estimate, using the same flawed techniques, for changes between 2000 and now are accurate?
I'd far rather believe local officials estimates, since they are closer to the situation, though clearly they are also just that -- estimates.
Chris Johnson Fulton
TEMPORARY REMINDER: 1. Don't feed the troll! Ignore obvious flame-bait. 2. If you don't like what's being discussed here, don't complain - change the subject (Mpls-specific, of course.)
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