MASON CITY ñ High vacancy rates for rental properties, especially for the more expensive units, have the owner of Mason City’s largest property management company concerned about community stagnation and population loss.
By Joe Buttweiler| 
MASON CITY ñ High vacancy rates for rental properties, especially for the more expensive units, have the owner of Mason City’s largest property management company concerned about community stagnation and population loss.
The vacancy rate for apartments managed by American Realty & Management Inc. is about 10 percent. That is down from the vacancy rate four years ago, but about three times the traditional rate, said company owner Jim Marinos.
Things have picked up a bit in the past couple months, he said, but there still are a lot of factors affecting the rental market, including population decline, job losses that have younger people moving in with moms and dads, parents moving in with kids, flood victims caught in a financial squeeze, and renters who would normally have their own place taking in a roommate to save costs.
“Everyone’s been tightening their belt,” Marinos said, noting that he recently lost a tenant who was moving to Ankeny because he lost his job in Mason City and had been unable to find another one locally.
Marinos said the vacancy rate for the more expensive dwellings is higher than for the lower-cost units, which is the opposite of how things have been in the past. “There is something different going on,” he said.
“Traditionally we ran almost full until four, four-and-a-half years ago when things started to fall apart,” Marinos said. Overall vacancy rates hit about 15 percent and stayed that way for about three years. “Then things started to get better,” he said, and the vacancy rate dropped to about 3 percent, which is considered just about full since there is always some churn between occupants.
“Then boom, it shot to 10 percent about a year ago,” said Marinos, “When you’re talking about that many apartments, that’s a lot of lost income.” American Realty manages 425 apartments in 55 buildings.
Mason City landlord Ed Kent, who manages more than 100 units, said he’s seen a little increase lately in the vacancy rate, but that overall the market is stronger than it’s been for the past several years.”
Five years ago his vacancy rate was about 20 percent. It’s less than half that now, he said.
Landlord Russ Hardy, who manages about 180 units, said his vacancy rate is about 8 percent, which is about normal. About a year and a half ago it was about 18 percent, he said. “It was causing some real consternation at that point. It was when the recession was hitting.”
Hardy said he often sees families doubling up or even tripling up into the same dwelling in the winter, so the market for three- or four-bedroom houses gets tight. “Then when spring comes they are tired of living with each other and utilities don’t cost so much so they look for places individually.”
Utility costs dictate a lot of rental decisions, he said, noting recently that he had three families saying they couldn’t pay the May rent because they needed the money for utilities or they’d be shut off.
Rather than move to evict, he usually tries to work out a plan for the tenants to get caught up, he said.
Hardy said he hasn’t noticed higher vacancy rates for his higher-priced units, noting he recently rented houses for $1,000 a month and $1,200 a month.
It really depends on the condition of the property and its amenities, he said. “There are people looking for certain things. If they find what they’re looking for, sometimes the price isn’t as important.”
Mason City’s population has been on the decline. It was at 29,172 in 2000, according to the U.S. Census Bureau. The bureau’s estimate for Mason City in 2006 was 27,740. Figures from the 2010 census have not yet been released.
Marinos said he’s concerned about the population decline. Given the city’s location and numerous positive attributes ñ railroads and highways, parks and trails, museums, library and the quality of the workforce — Mason City should have a larger, growing population, he said.
“This town is undersized for where it ought to be,” Marinos said. “Companies seem to be reluctant to come here. You can read into that what you want.”
Even in a down economy, many businesses expand, he said, to gain market share. And there are often many start-ups that create jobs and draw population.
Unfortunately, too many good-paying jobs have been eliminated, he said, due to budget-cutting driven by corporations based elsewhere. “As more middle management and better paying jobs get eliminated, it hurts the community.”
He said leaders need to look long-term more instead of being so short-sighted. “We need to see more proactive, progressive leadership and cooperation.”|
