The Twin Cities metro area is experiencing the lowest rental housing vacancy rate in about a decade. The tight market and rising rents are making it difficult for people to find cheap apartments.
New numbers show the average market rent in the Twin Cities for the first three months of this year was $966 a month. That's about $30 more than it was a year ago, according to Marquette Advisors, a real estate consulting firm.
More metro renters are spending more than half their income on housing. according to 2011 Census data. A national study recently ranked Minnesota the least affordable state for housing in the Midwest.
The president of HousingLink research group, Sue Speakman-Gomez, said part of the reason for rising rents and availability shortage stems from the continuing crisis in the home ownership market.
"Three or four years ago we saw a lot of move-in specials. They were giving away a month of rent free or other perks. Well, we are not seeing that now."
"People who lose their home through foreclosure have to live somewhere and oftentimes they come into the rental market," Speakman-Gomez, said. "If not immediately, then certainly a little after they get stabilized, they'll come back into the rental market."
People who could not afford to buy homes during the crash also wound up renting. With more renters in the market, it is harder than ever for those people with lower income to find a place that does not swallow their paycheck every month.
In a computer lab at a Minneapolis homeless shelter, Tiana, 23, combs through housing listings. She and her two daughters -- ages 7 and 3 years -- have been homeless since Tiana lost her job and could no longer afford rent several years ago. They stayed with family and friends for as long as they could before coming to the shelter.
MPR News is not using Tiana's last name because of a history of domestic violence.
Tiana works in retail. She knows what kind of apartment she wants: she is hoping for a one-bedroom in Minneapolis so her daughter can stay in the same school.
"Just something that is clean and safe and in a neighborhood where my kids can play outside," Tiana said. "I don't want to be forced to move in a horrible neighborhood in a horrible house because of my situation. My kids don't deserve that.
With her low income, she knows she might have to settle for less.
"The only thing that I can ultimately afford is a studio, and the studio efficiency thing is a catch-22. I could afford it but they won't allow me to move into it with two kids."
In her price range of less than $600 a month, 21 listings appear on the scree, but some of these apartments are far outside the metro. Most of the places in Minneapolis are too expensive for her.
Shelter housing advocate Lauren Bahe said she sees this all the time.
"Now it's a landlord's market so they can be a lot more choosy," Bahe said.
And that means some landlords are taking advantage of the rental boom by increasing rents, Mary Jo Quay said. Quay sells rental property to landlords and said some landlords are also just raising rents to cover their own rising costs.
"Three or four years ago we saw a lot of move-in specials. They were giving away a month of rent free or other perks," Quay said. "Well, we are not seeing that now. We are seeing full deposits, full first months rent."
People seeking more affordable rent are being pushed further into the suburbs, Quay said.
The trend worries Valerie Hurst, 24, who lives in the uptown neighborhood of Minneapolis and is looking for a one-bedroom apartment. Hurt hopes to pay less than $750 a month.
But as an administrative assistant for a non-profit, Hurst said she is not seeing much that she can afford. Many of the new apartment buildings going up in uptown are more expensive than she expected.
"I went on the website for one of them and it's like studios for $1,200 and I kind of feel like I'm at risk of being priced out," Hurst said.
It's difficult to say how long the affordable housing shortage will last. With economic uncertainty, some housing policy experts say high rents could be the new normal in Minnesota.
This story was produced with the help of the Public Insight Network.