More kids in F-M apartments: Some families content renting, others dream of homeownership

FARGO - Ashley Held and her son, Carter, live in one of the many apartment complexes on 39th Street South, just south of West Acres mall.

The neighborhood is in the West Fargo School District, and on a recent chilly Wednesday afternoon, Held picked up Carter from his school bus stop.

Held, who's studying to become a surgical technologist, said apartment living is convenient and works for their life as she goes through school. Eventually she'd like to be a homeowner, but right now it's not in the budget.

"I'm hoping by the end of next year" to own a home, she said. "I'd like to be out of apartments."

Mother and son are part of what appears to be a larger trend in Fargo-Moorhead.

The rising cost of new homes, tight supplies of affordable housing, and fancier amenities in newer apartment complexes have made apartment living a competitive option for many families, according to school, city and business officials.

"The people living in (apartments) have been ... young families, older families, immigrant families, young couples. It runs the gamut," said Petter Eriksmoen, director of operations for Fargo's Appraisal Services Inc., which tracks the multifamily home market in the metro area.

"I think that young families are a major group moving into the community because of the job market and the cost of living," he said, and they're choosing apartments.

"There's obviously been a pretty significant increase in population here. And the easiest way to move to a new community is to get into a rental property, because you don't have to wait," Eriksmoen said.

Just ask Khadija Bacraj.

Bacraj was picking up her daughter and a niece at the bus stop south of West Acres, too. She says apartment living has its perks, with one of the best being convenience.

Her place offers location, location and location, she said.

"Close to everything, good area, two malls," Bacraj said.

More kids seen

Brad Redmond, the West Fargo School District's transportation director, says district buses now transport 260 children to and from the apartment complexes south of West Acres, an area that seven or eight years ago had 100 children to bus.

In general, he's had to shift more buses to neighborhoods with lots of apartments.

"It is hard to put exact numbers to the increase as we don't keep historical data of students living in areas," Redmond said in an email. "We have seen over the years the density (of students living in apartment complexes) around the Scheels store (on 45th Street South); 9th Avenue Circle, south of West Acres mall; and Amber Valley Parkway (south of Interstate 94 and west of 45th Street) continue to grow."

Redmond said strong numbers of children in established areas, particularly neighborhoods with many apartments, help keep West Fargo School District's northside schools at capacity.

Dan Bacon, transportation director for the Moorhead School District, also hasn't tracked the numbers of students in apartments closely. But he said, "It seems like we're getting more kids out of apartment buildings."

A March 2015 demographics study done for the Moorhead School District found that 16.7 percent of the district's students lived in apartments.

Bacon said he's had to shift students between bus stops, most recently in the Belsly Boulevard area. "I think it's something we have to pay attention to," Bacon said.

Jim Gilmour, Fargo's planning director, said more children in the city's southside apartment neighborhoods - such as south and west of the Kmart store by Interstate 94 - may have been a factor in the Fargo School District's decisions to build the southside "infill" schools: Ed Clapp Elementary in Bluemont Lakes and Eagles Elementary along South University Drive.

Heat maps generated by demographers show high densities of students in apartment clusters near Jefferson Elementary (a few blocks south of Main Avenue), around Kmart, and around 32nd Street and 32nd Avenue South, said Jeff Schatz, superintendent of Fargo public schools.

No tracking done

Neither the Fargo, West Fargo or Moorhead school districts, nor the Home Builders Association of Fargo-Moorhead, track the number of families with children in apartments.

Using American Community Survey census data, the National Association of Home Builders (NAHB) calculated that nationally there were 30.2 children per 100 new homes and 45.2 per 100 existing homes, while in new multifamily developments there were 21.9 children per 100 units, compared with 26.3 in existing units.

Large multifamily developments had fewer children still, with 16.7 children per 100 units, the NAHB found.

However, two-bedroom apartments had 31.4 children per 100 units, and three-or-more bedroom apartments had 71.6 children per 100 units.

The states with the lowest numbers of children in multifamily housing were led by South Dakota with 13.9 children per 100 units, followed by Montana at 14.4 and North Dakota at 15.8, the NAHB found.

The latest five-year estimates from the American Community Survey show that from 2011 to 2015, 56.2 percent of Fargo housing was renter-occupied. Moorhead and West Fargo had lower percentages: 36.5 percent and 33.1 percent, respectively.

Barriers to owning

Eriksmoen said building apartments is attractive to investors. Low interest rates made borrowing money for construction cheap after the most recent recession, he said.

"Developers realized that was a great time to invest in apartment buildings: No. 1 because there was pent-up demand; No. 2 because the cost to borrow was so low and apartment buildings are great long-term investments."

Appraisal Services reports 2,565 apartment units were completed in the Fargo-Moorhead area in 2014, 1,221 completed in 2015, and 454 completed in 2016.

Eriksmoen said apartment demand is not as strong as it has been, but investors still build them because even partial occupancy pays the bills and yields a return on their investment.

Plus, occupancy rates have improved. The metro area's vacancy rate decreased from 9.2 percent in March to 8.35 percent in June, Appraisal Services reported.

With a limited supply of affordable homes, Gilmour says, people may stick with apartments because they can't find a home in their price range.

Home prices have risen, Gilmour said. Meanwhile, some apartment buildings have become more family friendly.

The price barrier is something Dilan Ghalib can relate to.

Ghalib, a Kurd who came to America a decade ago, is ready to buy a slice of the American dream. The supervisor at Fargo's Home Depot hopes his wife can get a good job so they can make that happen.

"We can't afford a house, that's the problem," Ghalib said. "If I (can) afford the house, I buy it right away."

1/2: Ashley Held picks up her son, Carter McLean, along his bus route in south Fargo.David Samson / The Forum

2/2: Apartment construction continues at 2836 41st St. S. in Fargo. David Samson / The Forum