Grand Forks resident Aaron Castoreno can sum up the city’s rental market in two words.

Grand Forks resident Aaron Castoreno can sum up the city’s rental market in two words.

“It sucks,” he said. “Basically, you can’t find anything, or it’s gone right away.”

The 28-year-old father of two has been searching for a house to rent near his children’s elementary school for about of six months. He and his wife, Taylor, gave up trying to buy a home near West Elementary a while ago, he said.

They’ve toured a few homes in that neighborhood, just east of the University of North Dakota campus. One three-bedroom house rented for $1,800 per month.

“It wasn’t worth it,” Castoreno said, noting the basement was prone to flooding and parts of the home were in disrepair.

To make matters worse, Grand Forks and East Grand Forks, Minn., are experiencing some of the lowest apartment vacancy rates in at least 10 years. In July 2013, about 4 percent of apartments in the cities surveyed by the Greater Grand Forks Apartment Association were vacant. In February, that number was 2.3 percent. Two years earlier, the rate had been 7 percent in July and 9 percent in February.

The higher July rate could reflect higher turnover typical for summer months, but about 200 units were added to the rental stock in 2012 and also could account for the slight vacancy increase. Hundreds more are slated for construction this summer in the city and could be the answer to a phenomenon housing experts say they haven’t seen the likes of in Grand Forks.

Sudden drop

John Colter, executive director of the Greater Grand Forks Apartment Association, has been compiling the vacancy surveys locally for about 10 years.

The drop in available units came as a surprise to him.

“We were seeing 6 percent, 7 percent then all of a sudden, wacko!” he said, hitting a tabletop. “We can’t explain it.”

Landlords responsible for 8,246 rental units returned the latest survey, which means only 327 of those units were vacant.

But that survey doesn’t include all of Grand Forks’ rentals. The city’s Building Inspections Department puts the current number of units at 11,087 — an amount that doesn’t seem to be enough.

Ryan Brooks, senior planner with the city of Grand Forks, said while UND has had increasing enrollment, it’s not enough to solely account for the surge in people seeking rentals.

Neither is the growth experienced by the city’s industrial and commercial sectors. It could be a combination of all three, plus some influence from the state’s Oil Patch as some businesses have located in Grand Forks to cater to that region, Brooks said.  

Terry Hanson, executive director of the Grand Forks Housing Authority, said part of the crunch may have come from households that were doubled up in rentals. As new units are built, the old ones empty and then become occupied by people who were living with others because there were no open or affordable places to live at the time they were looking.

Getting in

No matter what is causing the drop in vacancies, it still leaves Castoreno looking for a home.

A lifelong Grand Forks resident, Castoreno said he has never seen a rental market like this one.

If his family can’t find a rental, Castoreno said they’ll likely try to buy a home in Hatton or Manvel, N.D., and commute to West Elementary, which has open enrollment. He’s seen some homes come on the market in Hatton for $110,000.

“That’s half of what you’d pay for one like it in Grand Forks,” he said.

Until things come together, Castoreno said he’s continuing to browse and post online ads seeking housing leads.

If browsing the classifieds fails, some turn to the Grand Forks Housing Authority to help them find a place, according to Hanson. However, the agency can offer affordable housing and assistance to only those who are eligible under its income requirements set by the federal government.

“We’re getting about 50 applications a week,” Hanson said.

Not everyone who turns in an application is eligible for help, but being qualified doesn’t result in instant housing either.

“We have a waiting list for every property and our voucher program,” Hanson said.

The agency manages 725 apartment units and owns another 37 units. Qualifying applicants can wait two to three months or even up to two years for housing.

New construction

Relief for renters could be on the way in the form of more than 1,000 units that have been approved by the city for construction.

Building records dating back to 1970 don’t show the number of apartments built in one year exceeding 600 units.

So far, 168 units have been completed this year, according to the city’s Planning and Zoning Department. Another 1,115 are under review, are under construction or already have been built.

“It’s safe to say we’ve never done 1,000 units in a season before,” Brooks said.

The addition of new apartments could persuade current renters to upgrade to fresh buildings with more amenities, Colter said.

“Everyone wants to live in something brand-new,” he said.

Hanson shares a similar outlook. He said people will leave their old buildings, emptying them out and encouraging landlords to lower rents to attract new renters — ones who may currently be living somewhere unaffordable or overcrowded.
“They can keep on building all they want,” Hanson said.