Back in 2007 when the economic struggles and foreclosures began, I had a feeling that it would become harder to find an affordable rental in the Twin Cities (Minneapolis+St.Paul). It was a logical conclusion that less people owning houses would mean more people renting. But it wasn’t until I started looking for an apartment in Shanghai that I realized how cutthroat the rental market had become back home. Akin to the fable about the frog in boiling water (toss a frog into a pot of boiling water and it will jump out. Place in a pot of cool water, raise the temperature slowly, and it allows itself to be boiled to death), I hadn’t realized what was gradually occurring all around me.
At the start of my search for a sublet in Minneapolis last summer, I thought finding a room would be a cinch. I imagined all of the places in the Como neighborhood by the University of Minnesota that would be abandoned by students who returned home for the break, along with the places that were surely overlooked during the summer months before the real moving season of August and September began.
Not long after initiating my search, my rose-colored expectations were replaced by frustration. A good apartment is hard to come by in Minneapolis! Instead of lining up a few viewings at my own convenience (like the ‘old days’ circa 2006), I suddenly felt as though I was going through a job application process: strategically writing my email inquiries, preparing my documents (including my last three paystubs) and responses ahead of time, putting on my game face like I was preparing for an interview.
How long did you live at your previous place of residence? [Spoken with demoralizing ‘concern’ face] Only six months? Did your previous landlord complete a tenant report? How long have you been working at your current job? What is your yearly salary? You’re self-employed? Hmm, that’s not good… Oh, just so you know, we have a lot of people coming to look at this place this weekend—oh, wait, here are some of them now—I’ll get back to you in the next few days and let you know who we chose.
And all for a 3-month summer sublease that I’ve offered to pay for in full up front! What do you care if I make $100,000/year or $10,000/year?
In order to secure an apartment, which was overpriced to begin with, I spent 3 weeks aggressively scouring craigslist, newspapers, Facebook, and my network; offered to pay an extra $100/month; and even took my possible future roommate out for drinks in order to smooth things over and convince him that I was responsible and socially likable. In the end, the person who’s room I was taking even had the audacity to suggest that I should let her stay for free a little while after I started paying for rent because she’d done me a favor by selecting me as her replacement. Talk about a complete 180°! Remember when subletting someone’s place was doing them a favor?
The helplessness of my rental experience in Minneapolis was amplified by the comparative ease with which I found an apartment in Shanghai. For a city where residents complain of skyrocketing rental prices, there were seemingly infinite options and armies of people ready to schedule showings and negotiate with owners for lower rent—all of them working to earn my business. The difference in experiences was so vast that I was driven to uncover the facts lurking behind my sour experience in MN.
Some notables include:
- Minnesota is the least affordable state for renters in the Midwest
- Rents are high and rising while wages are floundering
- Millions of families have transitioned into rentals since the recession hit
- Minneapolis renting is out of control—In 2012, Mpls ranked as the second worst city for renters in the US
- Finding a place is a serious competition—less than 3% of Mpls apartments are vacant
- Rent is expected to continue rising in 2013
Some suggest that high rental prices and lower mortgage rates will result in a rise in home purchases. But faced with a limited job market and in the wake of so many foreclosures, the risk of taking on more debt can be extremely intimidating. Paired with the fact that people today prefer to wait longer to settle/marry, I can’t imagine many recent graduates are preparing to hunker down in one place at the cost of an even larger mountain of lifelong debt, even if it means a slightly lower monthly payment. But I’ll leave that topic for a different post.
What has your rental experience been since the recession hit? Are you noticing changes?