Apartments rise as vacancy stays flat

Six new complexes will open near campus in the next few years.

Jennifer Bissell

With five large apartment complexes gearing up for summer construction, it seems there is a clear demand for more housing around campus.
Developers say that even after the buildings are completed, there will still be a demand.
Doran Companies Project Developer Jim LaValle said a survey found a need for 2,000 more units, which he says still wonâÄôt be filled after all of this yearâÄôs construction is finished.
Doran is in the midst of construction on 412 Lofts in Dinkytown after it completed construction for Sydney Hall, blocks down Fourth Street, in September. Now the company is making plans for a third complex in Stadium Village.
The company saw a niche for upscale student housing with Sydney Hall when it easily leased all of its 125 units, Doran Companies owner Kelly Doran told the Minnesota Daily last summer.
Pending city approval, Doran hopes to build Oak Street Flats on the lot now occupied by the Golden Bowl restaurant and the Oak Street Cinema. The developer has already gained the support of the cinemaâÄôs owner, Minnesota Film Arts, and got approval to demolish the building by the Minneapolis Heritage Preservation Commission.
LaValle said he hasnâÄôt been surprised by the areaâÄôs recent rush in construction and wouldnâÄôt be surprised by more. Compared to other Big Ten schools, the University of Minnesota has the third-fewest on-campus beds.
With tens of thousands of people regularly visiting campus, there is a large market for close-to-campus apartments. With many students in a period of transition, Solhaus owner Curt Gunsbury said the demand for high-quality apartments is significant. Solhaus, a Stadium Village apartment complex, is set to open August 2011.
âÄúApartments are all about transition,âÄù Gunsbury said. âÄúCollege is a transition, a new job, divorce âÄî thatâÄôs what generates demand for apartment rentals.âÄù
As Solhaus begins signing leases for next year, Gunsbury said the majority of interest has been from graduate students at the UniversityâÄôs medical, law and business schools.
âÄúIf youâÄôre spending $20,000-$30,000 for an education, whatâÄôs a little more for housing as an assurance that itâÄôs clean and safe?âÄù Gunsbury said. âÄúA lot of the derelict housing is no longer acceptable to people who are taking the time to study âĦ They donâÄôt want to bother chasing a plumbing problem.âÄù
Most of the new complexes being built carry a rent of close to $1,000 a month.
University sophomore and Sydney Hall resident Oluwanifesi Banjoko said while heâÄôs enjoyed living at the location, price has been an issue.
âÄúItâÄôs worth living in Sydney if you have the means to pay for it,âÄù Banjoko said. âÄúOtherwise you just stress yourself out with school and everything else trying to pay for it.âÄù
Banjoko said heâÄôs looking into 412 Lofts for next year but overall wants cheaper rent.
Because of the complexities of building development, Gunsbury said heâÄôs not surprised at rental studies that suggest Minneapolis is underserved in housing.
âÄúA balanced housing market is at 5 percent [vacancy],âÄù Gunsbury said. âÄúNow itâÄôs almost 0 percent âĦ zero is a long way to go. ThatâÄôs thousands of more units.âÄù
Besides Solhaus, Sydney Hall, 412 Lofts and proposed Oak Street Flats, there are two other housing complexes around campus in the works.
Construction will begin on Opus Development Corp.âÄôs Stadium Village Flats after the demolition of Harvard Market in late April.
âÄúItâÄôs a wonderful location, close to campus,âÄù Senior Project Manager Tom Becker said.
One issue Opus will need to address will be coordination for construction plans between the building and the Central Corridor light-rail line.
Already, the groups have begun discussing âÄústreetscapingâÄù scenes. Though Opus will finish construction in August 2012 âÄî two years before the light rail is complete âÄî Becker said the construction shouldnâÄôt interfere with residential living as the bulk of it should be over by the time residents will move in.
FloCo Fusion, on the other hand, has chosen to stray from the student market, despite its proximity to campus at the juncture of University and 10th avenues southeast. Instead it caters to a young professional market, capitalizing on being âÄú48 seconds from downtown,âÄù as its website claims.
âÄúItâÄôs a gateway near to downtown and close to a lot of stuff,âÄù property manager Brad Roberts said.
Prospect Park and East River Road Improvement Association President Dick Poppele said he believes new developments will be an improvement to the neighborhood, bringing more residents to the area.
âÄúStadium Village is becoming quite a good place to be,âÄù Poppele said. âÄúHaving more people living there will enhance the neighborhood, making it more of a go-to place than it is now.âÄù