More than 17,000 rental apartments have been built in the Twin Cities metro since 2010, but that’s far from enough to satisfy future demand.
How many more are needed?
A new report from the National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA) said that the Twin Cities needs 70,783 new apartments by 2030 to keep pace with demand, assuming current social and demographic trends continue unabated.
Here’s a distillation of the findings for the Twin Cities metro area:
• Factors that are driving demand: an aging population, international immigration and more moderate levels of homeownership.
• Number of rental units already in the housing stock in the Twin Cities metro area: 298,214.
• Average number of investment-grade units built annually between 2011 and 2016: 2,267.
• Average number of new units needed each year to meet expected demand: 5,056.
• National rank among 50 metro areas in terms of the percent increase in demand for new apartments by 2030: No. 15.
The report said the Twin Cities and other large metros are experiencing a fundamental shift in their housing dynamics, with more people choosing renting over homeownership for the following reasons:
• International immigration is assumed to account for approximately half (51 percent) of all new population growth in the U.S., especially in the nation’s border states. Immigrants have a higher propensity to rent and typically rent for longer periods of time.
• Delayed house purchases. Life events such as marriage and children are the largest drivers of homeownership. In 1960, 44 percent of all households in the U.S. were married couples with children. Today, it’s 19 percent.
• Growing need for renovations and improvements on existing apartment buildings will provide a boost in jobs (and the economy) nationwide. The study cites research that says 51 percent of the apartment stock was built before 1980, which translates into 11.7 million units that could need upgrading by 2030.