Real Estate Consulting & Sales | Residential + Commercial

Twin Cities Rental Housing Boom; more than just new hi-rises

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?

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While renting a home is often associated exclusively with apartment living, there are many types of homes in the rental housing stock. Renting a home, regardless of structure type, can provide a housing option for individuals and families who are on a budget, saving to purchase a home, or who expect to change locations in the near-term. And while builders have accelerated their pace of multifamily construction to meet rising rental demand, it is useful to understand the composition of the current rental housing stock.Based on the Census Bureau’s 2013 American Housing Survey, the rental stock increased 1. 4 million from 2011 to 2013 to a total of 40 million residences. Contrary to popular expectations, most rental homes are smaller properties, single-family homes and multifamily buildings with 2 to 4 units.Single-family detached homes made up the largest individual share of the rental housing stock, 29 percent of the entire rental market in 2013. Combining that portion of the market with the share of townhomes (single-family attached), all single-family residences accounted for 35 percent of the occupied rental 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.