Barbara Lickness wrote: > I am a bit puzzled by what is happening here in > Minneapolis. How did we go from 1-2% vacancy rates a > couple years ago to between 20-30% vacancy rates now? > Did we really build that many more units? Are rents so > unaffordable that people are doubling or tripling up? > Did a bunch of people move out of the city? Exactly > what happened?.
I think there are several factors that have contributed to the extremely low and then the extremely high vacancy rates. One of the major factors was an underconstruction of apartments in the 1990's. From 1990 to 2000, the population went up about 15% while the number of apartments went up only 3%. Now I think that this was due to several factors. First, I think the suburbs really were not interested in having apartments, believing that it was more cost-effective and advantagous and prestigious for them to have single family housing. I think builders still believed that most people wanted single family housing. Land values were low enough that people could still afford single family houses. Congestion had not reached the levels that it has today so living further out was an option. With the terrible shortage in apartments, rents went way up. When rents went way up, coupled with employment going up 25% while interest rates went to 40 year lows, some people were able to trade up to home ownership. In my mind, this is one of the big drivers in the huge growth in property values first in lower value homes then throughout the whole housing market. Other people were stuck paying substantially higher rents. What changed? Suburbs realized (thanks to groups like low income housing advocates, Smart Growth advocates like Ted Mondale, etc) that they needed to have a diversity of housing if they ever wanted anyone to be able to work at their grocery stores and gas stations. Housing builders realized there was this huge underserved market. Land values have skyrocketed, making large lots very expensive. Construction costs have also gone up substantially. Congestion is also making land further out less desirable, which has also benefits fill-in apartments and condos. The result? Most recently over 50% of housing was in multi-units rather than detached housing. There has been a large number of apartments constructed, as well as condos/townhouses, which have been an economical alternative to renting for many people who have successfully weathered the economic downturn. This is at least part of the story. Carol Becker Longfellow REMINDERS: 1. Think a member has violated the rules? Email the list manager at [EMAIL PROTECTED] before continuing it on the list. 2. Don't feed the troll! Ignore obvious flame-bait. For state and national discussions see: http://e-democracy.org/discuss.html For external forums, see: http://e-democracy.org/mninteract ________________________________ Minneapolis Issues Forum - A City-focused Civic Discussion - Mn E-Democracy Post messages to: mailto:[EMAIL PROTECTED] Subscribe, Un-subscribe, etc. at: http://e-democracy.org/mpls
