Compared to the average income, current metro-area rent rates are not affordable.
Students renting houses in the University area have something in common with renters statewide – they’re paying the most in the Midwest.
The National Low Income Housing Coalition announced April 7 that Minnesota has the highest rental prices among 11 Midwestern states.
According to the study, the average wage for those renting in Minneapolis, St. Paul and Bloomington is $13.77 per hour. A rent considered affordable for renters making this wage is $716 per month.
However, the average metro-area rent is around $1,100, said Chip Halbach, executive director of the Minnesota Housing Partnership.
For those who make minimum wage, $6.15 an hour, affordable housing is $320 per month, the study found.
Foreclosure is putting more pressure on the rental market, Halbach said.
“My overall sense is that with the foreclosures that we’re having a further tightening of the rental market and rents are increasing, somewhat,” he said.
With such a great emphasis on home foreclosure in Minneapolis, Halbach said notifying City Council members and the University of high rent prices is the only way the issue would be highlighted.
Associate professor of housing studies Jeffrey Crump said affordable housing is calculated with two factors – a person’s income and the price of rent.
Designating 30 percent of a person’s income for rent is considered affordable, Crump said.
There are two ways foreclosures are adding the need for rental housing and the high rent rates, Crump said.
First, he said investment property owners who go into foreclosure displace their renters, which requires them to rent elsewhere.
In addition to investment property owners, those who foreclose on their own homes have to move to rental property.
While students tend to rent, Crump said he’s not sure if foreclosures have forced residents to move into the area.
“How much that’s affecting the market for specifically students, then, you know, that’s pretty hard to say,” he said.
Peter Leeman, a mechanical engineering junior, said housing prices are his biggest concern.
“I can’t afford my own place, so that’s a big motivating factor,” he said.
Since he moved from Melrose StudentSuites to the Prospect Park neighborhood, Leeman said he’s paying less for rent, but he doesn’t think it’s affordable to live near campus.
“Close to campus, it seems like they have to pay a lot,” he said.
Students living on fixed budgets can’t pay high rents on their own, Leeman said.
“Anything over $500 would be hard to pay for anyone paying for themselves,” he said.