GRAND FORKS — Quarterly studies show relatively fewer people are renting apartments in downtown Grand Forks.
The vacancy rate in 600 to 700 apartments – in an area as defined east of Washington Street, west of the Red River and north of DeMers Avenue, Fourth Avenue South and Minnesota Avenue – rose from 8.87% in the first quarter of 2019 to 9.23% in the fourth quarter, according to a survey of landlords that is regularly administered by the Greater Grand Forks Apartment Association.
Meanwhile, the citywide vacancy rate, which includes units at Grand Forks Air Force Base and UND, was 5.74%, a figure that’s 3.36 percentage points lower than the one recorded for the fourth quarter of 2018. Downtown’s vacancy rate, according to the four association surveys conducted in 2019, was almost always higher than or equal to every other segment of the city.
Those figures aren’t a perfect measure, because the number of respondents fluctuates and the association only surveys member landlords, plus a handful of others. But John Colter, the association’s executive, said he thinks they’re an accurate representation of the city’s true vacancy rate because they measure occupancy in more than half of Grand Forks’ total stock of rental units.
And that 9.23% figure is high, period, Colter said, regardless of where it is in the city.
“For Grand Forks, that’s high,” he told the Herald.
Dakota Commercial, which rents 1,094 units in 32 buildings citywide, has a 6% to 7% vacancy rate downtown, Kevin Ritterman, the company’s president, estimated – slightly higher than a more typical 5% mark.
“We can’t put our finger on why it’s a little bit higher,” he said. The company’s overall vacancy rate is about 9%, which staff there said isn’t unusually high for this time of year.
Dan Sampson, who rents a bevy of properties, said his vacancy rate downtown hasn’t really budged. He said he dropped rent by about 10% on units in further-flung parts of the city to fill them.
“It has gotten saturated with all the new construction around town, so we’ve had to drop our rents just to maintain occupancy,” Sampson said. “I have not done that downtown because we’ve stayed strong in the buildings we’ve had.”
So, assuming downtown vacancies are on the rise, why might that be?
Colter was unwilling to field a guess, but Ritterman speculates that new apartment buildings outside the city’s core – replete with brand-new amenities and proximity to retail outlets – might lure renters away from downtown.
“There’s a lot of older properties downtown and I think some of these owners are now seeing that they’ve got to reinvest in those units,” Ritterman said. “I think that’s part of it.”
Ritterman also thought the reason behind the higher downtown vacancy rate could be as simple as a statistical aberration – a blip on the radar.
Sampson guessed that vacancy rates could take a while to catch up with new construction.
“Usually if you build a new building, it takes about a year to fill it,” he said.
And downtown roadwork, which snarled traffic around DeMers Avenue all summer, might have scared away would-be renters, who reportedly struggled to meet up with landlords for a tour of an open apartment, Sampson guessed.
“It would be hard for them to get there, hard for them to park,” he said. “That was a big turn-off.”