Single-family home rentals surge in Twin Cities suburbs

The single-family home has become the hot new rental property in Twin Cities suburbs.

The total number of single-family homes rented out in suburban neighborhoods has soared from 12,000 in 2000 to 28,000 in recent years, according to census data compiled by the Metropolitan Council.

Whether the increasing population of suburban home renters has helped cultivate or crush a sense of community is up for debate, depending on an individual or city's experience.

This month, the Brooklyn Center City Council, worried that single-family-home rentals are "destabilizing" neighborhoods, banned new ones for six months. Single-family-home rental licenses in the inner-ring suburb have more than doubled since 2008, from 287 to 746 this year.

Other suburban leaders have enacted or tightened rules to manage the surge.

Brooklyn Center Mayor Tim Willson said the neighborhoods in which rental homes become concentrated sometimes suffer.

"Right now it's about keeping the right balance," he said. "We are looking at keeping that housing stock up and not having homes so deteriorated and blighted that they are no longer suitable for living in."

The city started a rigorous rental-licensing program in 2010. Willson said he had hoped that with the economic recovery, many rental homes would return to owner-occupied. That hasn't happened.

Single-family-home rentals now account for 12 percent of Brooklyn Center homes, up from 3 percent in 2000.

Willson said there are many good renters, but some create problems. "Worst case … for some reason the whole place is just trashed," he said. "That still happens too frequently. It is part of the whole rental world."

Teresa Barnes, who lives in Brooklyn Center's Riverwood neighborhood, applauded the city's moratorium on new single-family-home rentals. She said she can tell when a home becomes a rental — in some, blankets are tacked over windows and mini-blinds are broken. She said those and other problem make a neighborhood look shabby.

"It's always a concern when you start getting a bunch of rentals," Barnes said. "You worry about it becoming a rundown area where the landlords don't take care of the property."

A national trend

Single-family-home rentals are on the rise nationally, according to the Joint Center for Housing Studies of Harvard University.

"When rental demand began to climb after the housing bust, conversions of owner-occupied single-family homes to rentals accommodated much of that growth," according to the center.

The trend cuts across geographic and economic lines. Minnetonka, Edina and Eden Prairie, all relatively affluent, have seen single-family-home rentals double or more in the past few years. Minneapolis and St. Paul have also seen increases.

In Eden Prairie, home rentals climbed from 128 in 2000 to 541 in recent years, although the trend has slowed lately according to census data. A rental licensing requirement enacted in 2007 that includes regular property inspections has helped keep problems to a minimum, said Fire Chief George Esbensen, who oversees the program.

"It's all about keeping up the appearance of neighborhoods and the quality of the housing stock, making sure things don't slide," Esbensen said.

The increase is part of a greater social shift where younger adults, having watched their parents lose in the housing market, are delaying homebuying, he said, adding, "I don't think owning a home is the same big American dream it used to be."

Eden Prairie Mayor Nancy Tyra-Lukens said the one rental home on her street is well-maintained. She said she understands the desire of many reluctant landlords to hold onto property until prices rise. "It's better than having that many houses sitting empty," she said.

Brooklyn Park requires all prospective landlords to attend a daylong crime-prevention seminar before they are granted a rental license.

"Just because it's a rental doesn't mean we will tolerate it being a criminal hot spot," said Curt Raymond, Brooklyn Park's rental and business licensing manager.

The city has issued about 2,300 single-family-home licenses, including for townhouses and condos. "We are adding four to five per week. We are wondering, where is the bubble?" Raymond said.

He said his city is satisfied with its current rental situation, but that there does appear to be a correlation between higher-rental and higher-crime areas.

"Typically you can overlay the maps," he said. "It's really glaring that where the crime is happening, there are also a lot of rentals in the area."

Eric Piper is the housing and code enforcement inspector in New Hope, where the number of single-family homes for rent has doubled to about 280 since 2000, according to census data. He said many older inner-ring suburbs like his could be reaching a point where rental homes are compromising neighborhoods.

"They change the dynamics of a neighborhood," Piper said. "A lot of these investors will turn a three-bedroom house into a four- or five-bedroom house. It changes the number of cars parking on the block. A lot of times renters won't landscape the same as an owner-occupied."

Piper said homeowners on a high-rental block often complain about aesthetics beyond the city's reach — weedy lawns, tree limbs that sit for months, dirty windows, broken mini-blinds visible from the street.

"There is nothing wrong with an eclectic block with a rental or two, but the problem is when you have five rentals, then it becomes 10," he said.

Advantage or eyesore?

In Brooklyn Center, the temporary ban on single-home rentals has inspired different reactions.

Vicki Olson lives a block away from the duplex she and her husband have rented out for decades. She said she wants to keep her Riverwood neighborhood strong, but she also understands the need for good rental housing. Olson often rents to young couples who eventually have children and move on to buy their own home.

"The renters we've had have been lovely people," she said. "You want to have affordable housing. I think most people really want to buy a house, but wages are not what they used to be."

Lori Thayer, who owns a home on the Minneapolis-Brooklyn Center border, said she's fed up with renters.

"It's trashing the neighborhood, is what it's doing," she said. "I am sick of rental property. When you get rental property, they don't care if the yard looks like crap. They don't care if they trash the place. … I am not saying every renter is bad, but they don't have any ownership. They are going to move on."

Staff digital producer CJ Sinner contributed to this report.

Shannon Prather • 612-673-4804