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The Minneapolis vs. St. Paul rental cost ramp

Why do rents for 2-bedroom apartments in Minneapolis and St. Paul diverge so sharply, when 3-bedroom apartments cost about the same?

Keeping in line with my New Year’s resolution to better informed about stuff, I bought a Star Tribune last Sunday. In it, I noticed a nice, big chart under the homes section titled “Figures for rental properties, 3rd quarter of 2013.”

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The data shows average rent, number of units, and vacancy rate for various apartment sizes across Minneapolis, St. Paul, as well as the Suburbs North, East, Northwest-West-South of the Twin Cities, and Suburbs South of the Minnesota River.

A few things jumped out at me as I looked over the numbers:

  • The St. Paul vs. Minneapolis price ramp: The difference in rent between Minneapolis and St. Paul for a studio apartment is $8 ($757-$749), for a 1 bedroom this number grew to $123 ($962-$839), and for a 2 bedrooms it was $300 ($1335-$1035). Interestingly enough, for 3 bedrooms the difference broke the trend of increasing cost difference as more bedrooms were added and fell back down to $18 ($1,446-1,428). Why is that?
  • Lack of large apartments: The largest apartment size listed in this dataset was the 3 bedrooms + den / 4 bedrooms, used interchangeably I assume. While suburbs located South of the Minnesota River had 231 of these units, Minneapolis proper had zero(!) and St. Paul, North Suburbs, and East Suburbs all had less than 5 individually. Curious that Minneapolis/St. Paul have none/so few large apartments. I wonder if this is an effect of people with more than two roommates choosing a house instead. We certainly have a lot of those in the Twin Cities.
  • Lack of large apartments, pt 2: On second thought, I’m almost sure these numbers are incorrect — I was at a friend’s 4 bedroom apartment in Minneapolis just this weekend, why wasn’t that counted? Unfortunately the Strib doesn’t list much on this study’s methodology.

I loaded the data into a spreadsheet which you can view here, crunched the numbers and came up with a few summaries. Visualizing this data is important, but also deriving further statistics from what we’re given (such as rent paid by an average person, which I estimated as SUM[(avg rent price per unit) * (unit occupancy rate) * (number of units)] / SUM[(number of bedrooms)*(unit occupancy rate)*(number of units)]) proved fruitful. Here’s what I found:

Average rent an apartment-dweller pays in the Twin Cities

  1. Minneapolis – $817.49
  2. St. Paul – $644.06 (79% of a Minneapolitan’s rent)
  3. S of MN River – $575.11 (70% “)
  4. East Suburbs – $574.11 (70% “)
  5. North Suburbs – $527.56 (65% “)
  6. NW-W-S Suburbs – $399.56 (49% “)


The “ramp” effect shown in the bottom chart is probably the most significant finding. Overall, renters in St. Paul pay just about 80% of those in Minneapolis, but I’d guess there’s huge variability between that number. As an individual who lives in a 2 br with a den in Minneapolis, the data show I have a good reason to be jealous of people who live across 280. On the other hand, if my apartment had another bedroom, we’d be almost exactly on parity.

The only mechanics I can think of that would cause this trend have to do with demand affected by college students or the number of houses available. At a glance, the vacancy rates don’t seem to far off between Minneapolis and St. Paul, though as I mentioned, the data is all available here for you to poke through some more.

Some followup questions into this phenomenon would be:

  • Why are the rents for studio apartments and 3 bedroom units in Minneapolis and St. Paul essentially equal?
  • Why does the price for all other Minneapolis units accelerate as bedrooms are added, and what sets that rate of change?
  • How did this study count apartments?

This post was written by Tom Johnson and originally published on Stubble. Follow Stubble on Twitter: @stubblemag.

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