Housing study: Plenty of vacant lots, but demand for more rental housing

Click here to read about the median income in Elk River.

Click here to read about the ups and downs of home building in Elk River since 2000.

by Joni Astrup

Associate editor

Inside an apartment at Granite Shores in downtown Elk River. The units have some of the amenities today’s renters want, according to a housing expert who has done a study for Elk River.

Elk River has more than enough vacant residential lots ready for construction of new homes, but there is a demand for additional rental housing.

“That’s the big wave right now,” Maxfield Research Vice President Matt Mullins said of rental housing.

Those were a couple of the many observations in a housing study recently completed in Elk River.

The “Comprehensive Housing Needs Analysis” was commissioned by the city and done by Maxfield Research in Minneapolis. Mullins presented the results Tuesday to a joint meeting of the Elk River Housing and Redevelopment Authority (HRA) and the City Council.

The researchers found potential demand for about 335 new housing units of various types in Elk River in the next five years. The biggest short-term demand is for rental units, Mullins said.

The study identified a need for more rental apartment and rental townhome units as well as some additional senior housing.

There is no immediate need for more lots for single family homes. Elk River has more than 400 vacant lots across 28 subdivisions, all of which were platted between 2000 and 2006, when the market cooled dramatically.

“Really there’s no demand today for platting new lots. No developer is going to do that,” Mullins said.

Currently 15 subdivisions in Elk River are actively marketing about 150 lots, he said. Lot prices range from $18,000 to $80,000, with the average at about $40,000 which Mullins said is “down significantly” from the when prices peaked.

Much of Elk River’s rental housing is older

On the rental front, much of the current rental housing in Elk River is older and lacking features that many people are looking for today, Mullins said. That includes open floor plans, nine-foot ceilings, walk-in closets, in-unit washers and dryers, central air conditioning and garage parking.

“Today’s renters want more features and amenities,” Mullins said.

Granite Shores in downtown Elk River was originally built as condos, but has been converted to apartments.

He pointed to Granite Shores, the former Bluffs of Elk River building in downtown Elk River which has 67 condo units that were recently converted to apartments. It has amenities like granite countertops and stainless steel appliances.

“Granite Shores has been going gangbuster,” Mullins said. “That has leased really, really well.”

In general, Mullins said a 2.5 percent vacancy rate in market-rate rental housing in Elk River indicates a pent-up demand.

There also is a pent-up demand for affordable and subsidized rental housing in Elk River, he said. Both have a vacancy rate of about 2 percent.

Subsidized housing is income-restricted to households earning at or below 30 percent of the Area Median Income. Affordable housing is income-restricted between 30-80 percent of the Area Median Income. Market rate is not income restricted.

Elk River has a total of 54 subsidized units within two buildings and 244 affordable units across five developments.

Recommendations

In total, owner-occupied housing accounts for abut three-fourths of Elk River’s total housing stock. Elk River has 6,480 owner-occupied housing units, 1,600 renter-occupied housing units and 460 vacant housing units.

The study found that demand exists for the following housing types to be built between 2012 and 2017:

•Market rate rental: 81 units

•Affordable rental: 40 units

•Subsidized rental: 9 units

•For sale single-family: 16 units

•For sale multi-family: 0 units

It also found that by 2017, there will be demand for the folowing senior housing:
•Active adult ownership: 0 units

•Active adult market rate rental: 40 units

•Active adult affordable: 12 units

•Active adult subsidized: 18 units

•Congregate: 53 units

•Assisted living: 12 units

•Memory care: 4 units

Comments Closed

up arrow