Undoubtably the Twin Cities Metro Area is within a real housing boom. Seems everywhere you look another crane is constructing another rental hi-rise. The past two years have been banner years for new rental housing as nearly 8,000 new units have been developed. However, not all the rental housing in the Metro Area is located in high-density developments. It is estimated that about 21% of the rental housing in the Twin Cities is located in either single-family housing or townhomes and condos. In addition, another 12% of the rental stock is located in duplexes, triplexes, and quads. Therefore, about one-third of the rental housing units are within rather low-density housing structures.
Single-family rentals are in high demand across the Twin Cities; most available properties are snatched up instantly and require virtually no marketing. Many homes start at about $1,300 per month and can easily surpass $2,500 to $3,000/month for a home in a desirable neighborhood.
What Kind of Homes are in the Rental Housing Stock?
The second largest share of rental stock was multifamily homes with 2 to 4 units (19 percent).
It is the case that rental housing tends to be located in urban areas. 85 percent of rental homes were located in metropolitan areas (MSAs), with 43 percent in central cities and 42 percent in suburbs. Multifamily dominated the housing rental market in both central cities and suburbs, largely due to the high land costs. Single-family rental homes were most popular in non-metropolitan areas.
The share of rental homes increased moderately almost across all structure types from 2011 to 2013, except for townhomes. The rental share of single-family homes, including both detached and townhomes, increased three percent from 2011 to 2013, compared to only a one percent increase in multifamily rental share. However, the increase for single-family rental inventory was not due to initially built-for-rent purposes, but came from formerly owner-occupied to rental homes.