With above-average job opportunities and a below-average cost of living, Minnesota’s Twin Cities have been a destination for many Americans looking to settle in an environment ripe with possibilities.
Minneapolis and St. Paul anchor one of the U.S. economy’s strongest and most dynamic regions, a place with more Fortune 500 companies per capita than in any other area in the country, according to the Minnesota Department of Employment and Economic Development. That has helped the Twin Cities keep the jobless rate about 1.5 percentage points lower than the national average this year.
The area is also exceptionally affordable, especially for lower-earning families. According to a recent article by Derek Thompson in The Atlantic, “low-income families can rent a home and commute to work more affordably in Minneapolis–St. Paul than in all but one other major metro area (Washington, D.C.).”
For the half a million new residents expected to call this metropolitan area home over the coming decades, many will be looking to rent an affordable home. To find the best places for renters in the Twin Cities, NerdWallet examined these factors:
- Are rental units available? Using 2013 U.S. Census Bureau data, we equally weighted the percentage of renter-occupied housing and the median rental vacancy rate. A high percentage of renters were weighted positively, while rental vacancy rates were weighed more positively when the rate was closest to the average. Deviation from the average in either direction lowered a city’s score.
- Are jobs nearby? Using the 2013 census bureau data, we equally weighted average commute times and median household incomes to determine if residents have access to nearby jobs. Shorter commute times and higher incomes tend to reflect the competitiveness of the local rental market.
- Is rent affordable based on each city’s median income? Using data from the U.S. Census Bureau’s American Community Survey, we gathered averages for price-to-rent ratios, which is the median home price divided by a year’s worth of rental costs. We equally weighted nominal median rent in each city, as well. We weighted the price-to-rent ratio and median rent costs equally, where a higher ratio and lower rent scored positively.
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Large and small cities. Both Minneapolis and St. Paul, the two largest cities in the state with populations over 389,000 and 288,000, respectively, ranked in the top 10. However, three cities with populations under 10,000 also made the list, which means renters have choices.
Affordable rents. Renters can expect to pay about $825 a month, which is the average of the median prices in the top 10 cities. That’s well below the regional average of $964.
Renters save time and money. Some economists say it’s better to rent than to buy a home if the price-to-rent ratio is over 15 or 20. For the top 10 places on our list, the average price-to-rent ratio is almost 24. Renters in the top cities also have an average commute time of 22.6 minutes, which is shorter than the regional average of 25.6 minutes.
NerdWallet crunched the data for 96 areas — cities, towns and census-designated places — in the Twin Cities region. Only places with over 5,000 residents were analyzed.
Best places for renters in the Twin Cities
1. Falcon Heights
Affordability and convenience are what propelled one of the smallest communities in our study to the top of the list. The median monthly rent in Falcon Heights is $861, which is slightly above the top 10 average of $825. However, 47.9% of all housing units are rentals, and the town has a rental vacancy rate of 8.1%, which means potential renters should find plenty of options in the city. Residents in Falcon Heights also have an average commute of 19.7 minutes, one of the shortest in the region.
Victoria, about 25 miles southwest of Minneapolis, is a scenic community on the southern shore of Lake Minnetonka. While the household median income is $122,171, the highest in the region, the town is still affordable: the median rent is $866, about 5% higher than the regional average of $825. However, finding a place to live may take some effort, since only 8.4% of housing units are rentals, the lowest percentage in the top 10.
3. St. Cloud
This suburb of the Twin Cities has a strong local economy, with the health care industry providing many jobs, according to the St. Cloud Area Chamber of Commerce. The median monthly rent is $703, the second lowest in the top 10. The 65,996 residents of this city, which is located about 65 miles northwest of Minneapolis, also enjoy the shortest average travel time to work in the state: 17.8 minutes.
Minnesota’s largest city has been a regional magnet for new residents in recent years, even outpacing the traditional Midwest powerhouse of Chicago. With increasing employment opportunities and cultural attractions, neighborhoods like North Loop and Uptown have boomed. But even as the city continues to grow and prosper, it remains unusually affordable: the median monthly rent citywide is $836, only slightly above the top 10 average of $825.
Located about 43 miles south of Minneapolis, Northfield is home to Carleton College and St. Olaf College, two premier liberal arts schools. As a college town, Northfield has plenty of affordable rental options available. The median monthly rent of $713 is well below the top 10 average of $825, and nearly a third of housing units are renter-occupied.
6. St. Paul
Minnesota’s second-largest city has been an increasingly attractive destination for young professionals for several years, with the Lowertown neighborhood gaining attention as a model for urban design. Not only does St. Paul provide a very livable environment, but it’s also an accommodating environment for renters as well. The median rent of $810 is less than the top 10 average, and 49.6% of all housing units are rentals, the second-highest percentage in the top 10.
Although Delano is located on the edge of the metropolitan area, about 29 miles west of Minneapolis, this town of 5,522 shouldn’t be overlooked by renters. The median monthly rent in Delano is $657, the lowest in the top 10, even though the median household income is $79,355, which is well above the top 10 average of $66,047. Delano is an excellent option for those looking to maximize their quality of life while minimizing their housing costs.
8. River Falls
River Falls, which is located 37 miles to the east of Minneapolis in Wisconsin, offers an affordable community with plenty of rental options. As the home of the University of Wisconsin-River Falls, rental units abound in the city with 47.5% of homes occupied by renters. The median monthly rent is $783, which is about 5% below the regional average.
Roseville is almost equidistant from Minneapolis and St. Paul, so it provides a level of convenience unmatched by any other city on the list. For the location, renters in Roseville pay a slight premium — the median monthly rent is $885, compared with the top 10 average of $825. However, the cost difference could easily be made up in time savings, since the average commute of 20.7 minutes is among the shortest in the region.
Edina, which is located about 10 miles south of Minneapolis, has become a popular community for families in the region. The local schools scored a perfect 10 at GreatSchools.org, the highest mark in the state, according to NerdWallet’s Best Places for Young Families in Minnesota study. Renters do pay a premium, with median monthly rents of $1,139, but the location and amenities make Edina an exceptional choice.
Check out this interactive map of our top 10 places for renters in the Twin Cities. Click on a marker to see each city’s overall score.
Best Places for Renters in the Twin Cities
The score for each place is based on data from the U.S. Census Bureau’s 2013 American Community Survey:
- Percentage of renter-occupied housing is 20% of the score.
- Median rental vacancy rate is 20% of the score.
- Median household incomes make up 10% of the score.
- Average commute times are 10% of the score.
- Price-to-rent ratio is 20% of the score.
- Median rent cost is 20% of the score.
NerdWallet crunched the data for 96 places — cities, towns and census-designated places — in the Twin Cities metropolitan area. Only places with over 5,000 residents were analyzed.
St. Paul, Minnesota, skyline image via iStock.