So many apartments have been built around the University of Minnesota that landlords are pushing harder than ever to get tenants.
After a frenzy of construction, there are increasing signs that apartment supply is beginning to outstrip demand around the Minneapolis campus of the U. Even at some of the newest and nicest apartments, landlords and apartment owners are offering incentives, such as bonuses for referrals, to tenants. As well, they are pressing students to sign leases earlier in the school year, sometimes only a month or two into their original agreement.
Some landlords say the newer apartment complexes around campus are creating artificial hype with such tactics. Some students and university officials worry students are being asked to make decisions too early or commit too much money to secure their rental.
In the 1990s, student housing near the U was mostly converted single-family homes and small apartment complexes, according to a 2015 housing report.
And in 2004, the school announced that it would not build any new apartments. The result: over the next decade, developers added 15,000 beds near campus.
Last year, about 870 units were added in five different projects, according to a Dougherty Mortgage LLC market survey. Though no new construction will begin this year, four projects are planned or proposed for 2017, which would add about 780 more units.
Craig Janssen, owner of the Elmwood Properties, said he believes newer apartments are asking students to sign leases earlier because of increased competition.
Jessica Poindexter, who has worked at the University Village apartment near campus since 1999 and is the community manager, has seen the housing market shift over time. University Village, which was one of the first large apartments close to campus, originally asked students to renew their leases 60 days in advance, but moved its leasing dates to match up with campus housing deadlines.
She said she thinks some apartment communities create a sense of urgency about the number of spaces available to encourage students to sign leases earlier. “I don’t know if they are necessarily telling the truth or not,” Poindexter said.
Though some in the area are skeptical of early leasing dates, there are some benefits to students and housing companies when tenants sign their leases early.
Many places near campus don’t raise a student’s rent if they resign. If they do, it’s often lower than a new tenant’s rent. That stability offered by guaranteed rent attracts many students.
Doran Cos., a commercial developer, asked tenants in its apartments near the university to renew their leases about a year ahead of time. The company does that in part because those properties tend to turn over their renters all at once, rather than consistently throughout the year, said John Wodele, vice president of marketing for Doran. As a result, the firm needs to carefully plan the cleaning and maintenance work that happens on a large number of units in about a week’s time.
“To risk waiting until the summer before would be suicide,” he said, adding that many apartments require a lease for each individual student, further complicating the process.
Early signing isn’t necessarily a bad thing for students, said Mary Bujold, president of Maxfield Research Group, a local real estate research company. Moving has a cost and it is difficult to move to a new apartment or house each year, she said.
Stephanie Reis, office manager at Dinkytown Rentals, who has worked in the area for eight years, said students are inquiring earlier about housing, a trend that has gained steam the past three years.
But not all students have had good experiences when signing leases early, she said. There have been issues with tenants’ plans changing, though the issues were resolved before their move-in date.
Some worry that asking students to renew their leases so early in the year forces them to make premature decisions.
Anne Budig, community manager for Keeler Apartments, said students’ lives can change drastically within a year and they aren’t always ready to make housing decisions so early.
“It takes a little more thought process,” Budig said.
Study-abroad programs, spats with roommates and transferring to another school are all sudden changes that can clash with students’ lease agreements.
“I wish that it was a little later,” Reis said. “I do feel bad that you have only lived here two months and you have to make a decision.”
As older students look to transition out of university apartments and neighborhoods, some find the shift toward the normal housing market jarring.
Ben Severseike, a senior at the U, said he signed his current lease about nine months before moving in. Now, he and his fiancée are making plans to live away from campus but haven’t started looking for places because apartments away from campus tend to sign up tenants only a month or two before move-in. “It has been kind of annoying,” he said.
Brian Edwards is a University of Minnesota student on assignment for the Star Tribune.