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Saturday, June 04, 2011

Homeowners give way to renters

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posted by Bob at Saturday, June 04, 2011

2 Comments:

Anonymous Tribune said...

The number of rentals is rising fast in city after city in the metro area partly because of foreclosure.

Homeowners give way to renters
Article by: DAVID PETERSON , Star Tribune


Laurie Karnes figures that she inspected as many as 70 townhouses before settling on two in the western suburbs that she has plucked off the foreclosure market and turned into rental units.

"The one in St. Louis Park was on the market for 10 months and just kept dropping and dropping and dropping its price until it reached what I felt was its true value," the Maple Grove woman said.

The rental market, on the other hand, she has found, is white-hot: "Right now you could probably rent a doghouse!"

She's hardly alone. A friend of hers is in the midst of buying a sixth unit. "Locksmiths," she said, "are going crazy with all these foreclosures."

People like Karnes, together with other parallel trends, are contributing to a significant shift in the Twin Cities housing market away from owned units and toward rented ones, 2010 census figures show. That's causing worry lines to appear on the faces in particular of suburbanites, many of whom consider rentals an anathema.

In 2000, the supply of owner-occupied housing more than doubled the number of rentals, reflecting historically high rates of homeownership across the region. But in the next 10 years, the 69,159 rental units wasn't far behind the 88,379 owner units added, census figures show. It's not known from those figures how much of the increase was due to new construction or conversion of existing units.

Some individual suburbs saw striking changes in the number and proportion of rental units. Apple Valley jumped from 12 percent to 19percent. Maple Grove roughly doubled, from 7 percent to 13 percent, and Lakeville's numbers were similar.

Minneapolis and St. Paul saw only modest changes, but Minneapolis went from being mostly owned to mostly rented, and St. Paul came close to that point.

Some of the change metro-wide was due to an aging population and its demand for senior housing. But a good deal of it resulted from the foreclosure crisis, and the increase has many officials and neighbors on edge.

"It's on our radar screen," said Ruth Grendahl, an Apple Valley City Council member. "We do now make them register with the city. Lots of times there are issues with maintaining foreclosed properties that are being rented out, and we have been concerned to stay on top of it and make sure they're being maintained."

That the census found more than 3,700 rental units in Apple Valley is surprising in that fewer than 1,000 are registered under the city's three-year-old rental registration program, Community Development Director Bruce Nordquist said.

But there have been signs of a big shift, he added.

"Forty-two percent of the growth in housing units from 2000 to 2010, by our figures, were rental, " he said, "so we're fundamentally filling in more rental.

"One reason, I suspect, is that in this housing market if people need to be mobile, they can't be in an owner-occupied situation. So people are looking for rentals."

David Peterson • 952-882-9023

4:24 PM  
Anonymous Anonymous said...

Looks like the citys bright idea of getting rid of renters to make room for home owners has gone bust!

1:02 AM  

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