Rents are climbing in Southwest Minneapolis, pricing some young people out of Uptown and prompting groups like the Lyndale Neighborhood Association to search for ways to help low-income families stay in the neighborhood.
More than 1,200 luxury units are opening in South Minneapolis in 2013 and 2014. Average rent rates in Southwest are now $995, according to Maxfield Research, which is $82 more than 2013 and $148 more than 2012. According to a report by Colliers International, metro vacancy rates still rank among the lowest in the nation.
That’s no surprise to East Isles resident Chris Wogaman. His monthly rent jumped $65 in 2012 alone, from $640 to $705.
“They said it was because of the market in Uptown having gone up so much that year,” he said.
Wogaman has lived in his 1920s-era building for nearly six years, and the rent has risen a total of $95 in that time. He’s thought about moving, but based on ads he sees posted nearby, better deals are hard to come by. He’s had a good experience overall with his management company, which he declined to name.
“I like where I am,” he said.
Rent increases are harder to absorb for some families in Minneapolis.
“We’re always trying to figure out how people can move up the economic ladder as things change,” said Mark Hinds, executive director of the Lyndale Neighborhood Association.
The neighborhood lobbied the state Legislature to raise the minimum wage, and recently held a Job Seekers Workshop conducted in English, Spanish and Somali to practice mock interviews and help with resumes. The neighborhood is also planning a workshop devoted to renter’s rights.
Hinds said a few apartment buildings have changed hands along Nicollet Avenue, and new lease structures and rent prices are taking tenants by surprise. Some buildings that didn’t have rigid leases are starting to tighten the rules, while other buildings are starting to charge separately for utilities.
“In a lot of places, people are not sure what rights they have or do not have,” he said.
A year ago, he said, one woman was living in a one-bedroom, one-bathroom unit with a broken toilet that wasn’t repaired for a month.
Often issues arise due to language barriers, Hinds said. Neighborhood organizers are meeting with landlords to help bridge the communication gap.
HOME Line, a nonprofit with a hotline offering free legal advice to tenants, expanded into Minneapolis last spring. Mike Vraa, managing attorney and hotline director, said he thinks landlords are trying to find the ceiling rent price of the market.
“I don’t even think they’ve hit our market capacity yet,” he said.
HOME Line has fielded a few calls where longtime tenants watched their rent jump from about $650 to $900. Those calls are rare, but Vraa said he’s seeing landlords quicker to pull the trigger on evictions than in the past.
He said rent increases are often chosen using a “herd mentality,” and landlords might raise rent if they know a neighbor is doing the same.
“Your article might inspire somebody to raise rent,” he said.
Jim Rubin owns Mint Properties, a company that owns and manages more than 600 units in Southwest Minneapolis. He said this is the second summer of low vacancy rates and higher rents, despite all of the new luxury apartment construction. In Southwest Minneapolis, the vacancy rate stands at 2.7 percent and it’s increased since 2012, according to Maxfield Research. Rubin said it will take time for new construction to impact the broader market.
“For people on year leases, it takes a long time for the cycle to happen, a year or two or three,” he said. “I’m guessing next year we will feel the impact, but it will be moderate.”
In the meantime, a recent college grad offered some advice about her apartment search:
“Of course being young, I wanted to live close to Uptown, however there was nothing I could find under $1,000 per month including all utilities,” said Maria, who declined to print her last name or building. “And if by chance there was something available in the $700 range it went fast or it was tiny with no attraction whatsoever.”
She chose an apartment in Midtown, and at the turn of a year, her rent increased 10 percent.
“Naturally, my first response is ‘Oh my gosh! I cannot afford to pay over 50% of my income!’ So I rushed to Craigslist and added Trulia on my phone and diligently looked for another place…and let me tell you, it was scary!”
In the end, Maria visited the rental office and pointed out her history of on-time rental payments. The office agreed to reduce the increase to 5 percent.
“So lesson learned; make your payments on time and advocate for yourself,” she said.
*This story has been updated with Southwest-area rent rates.