Campus-area vacancy rate remains under one percent

Todd Milbourn

Editor’s note: This is the first story in an ongoing series on the affordable housing crisis near the University. On July 17, The Daily will publish a series of stories, including neighborhood profiles and a look at the relationship between tenants and landlords.

Reflecting a citywide trend, the University-area apartment vacancy rate has dipped to a “crisis” level, according to an Apartment Search survey released this week.
Within campus-area neighborhoods, the vacancy rate is about .5 percent. Around the Twin Cities, 2 percent of rental units are available.
A healthy market is considered about 5 percent.
“It’s definitely a crisis,” said Lori Hoffman, senior project director at the Edina-based referral service. “There’s nowhere to go.”
Ten years ago, almost one out of every 10 campus-area apartments were available for rent. Since then, that figure has consistently dwindled.
Housing experts attribute the crunch to an increasing campus-area population and a lack of apartment construction.
“We’re expecting 10,000 new professionals coming to this area; plus, enrollment is up,” said Deborah Marsh, a Housing and Residential Life coordinator. “All of these people will be competing for the same subleases.”
Despite the influx of renters to the University area, apartment construction has stagnated in recent years.
“More people are living here now, but there has been little to no building in the `90s,” said Hoffman.
Potential developers are avoiding the University area and the Twin Cities in general, because property taxes on rental units and multi-family housing are three times higher than on owner-occupied housing, Hoffman said.
“Ultimately, nobody can afford to build affordable housing,” she added.
By reducing apartment and landlord selection, the tightened market has resulted in higher monthly payments for renters.
Near the University, the average one-bedroom apartment rents for about $590 a month, while two-bedrooms are going for $875, according to the survey. One decade ago, similar apartments rented for $426 and $584, respectively.
Mirroring the off-campus situation is the shortage of on-campus housing.
This fall, the University expects it won’t be able to provide immediate dorm housing for hundreds of incoming freshman. The overflow students will live in the Days Inn on Washington Avenue Southeast until dorm rooms open up.
In an effort to house more students, and, subsequently, ease the off-campus situation, the University is renovating older dorms and plans to open a 500-room Riverbend Commons dorm in Spring 2002. Marsh said they also hope to develop more private-public partnerships like University Village in the future.
“Right now, we’re looking for some land,” Marsh said. “But, as of yet, there’s nothing in the works.”

Todd Milbourn covers community and welcomes comments at [email protected]