Rural housing crunch hits home

PHOTO: Brian J. Beggerly, Flickr CC

One of the biggest challenges in moving to Northern Minnesota is finding housing. The same struggle broadly applies to all of rural Minnesota.

Sure, we’ve got lots of houses. “For sale” signs dot the streets of Iron Range communities. But if you’re not looking to buy, or especially if you’re not looking to buy what they call a “fixer upper,” you’re going to face a tougher search.

Renting is probably the bigger challenge. A single person, couple, or small family looking for a nice, two-bedroom, affordable apartment will find the price of rent out of whack with local wages. The example I often use is the Hibbing apartment where my wife and I first lived. The place now costs twice as much to rent, even though wages have been mostly stagnant since that time. (And the park next door is an assisted living facility that now blocks the apartment’s windows).

Don Davis details this challenge in a recent Forum News Service story that I saw in the local Grand Rapids Herald Review. Sources in the story argue that rural Minnesota has jobs, but what it lacks is affordable housing.

An example from the story:

“The local temperature is just proving that we can keep growing and keep building,” [Perham, Minn.] City Manager Jonathan Smith said.

The problem is, he added, “we can’t build what we consider affordable homes any more.”

Finances do not work out for private developers to build apartment houses and make a profit. Most new greater Minnesota apartment complexes are built with finance packages made up of private money, such as from banks, government tax breaks, government funds and aid private nonprofit organizations.

President Warren Hanson of the Greater Minnesota Housing Fund said it is common for housing projects to draw funds from 10 to 15 government and private sources. His organization often helps to coordinate funding for projects around the state, including in the Twin Cities.

It makes me think of some of the apartment buildings in Hibbing that I know. Several of them were built by the Oliver Mining Company to house their professional class workers. We’d call them modest today, but they were solidly middle class at the time. The buildings are solid; well built and have proven durable.

It’s stunning that a private developer can’t build a similar affordable housing complex today.

But then again, perhaps not so stunning. Construction costs have risen dramatically in the past 20 years. Zoning and setback in city centers make for special challenges in building housing where people need it.

Meantime, a rental investment requires years to yield profit. You’ve not only got to build the place; you’ve got to manage it, or pay to manage it. Private developers find better opportunities elsewhere. There’s a certain amount of passion for the community required to invest in rural community housing. As the story points out, often governments or nonprofits have to sweeten the pot to get developers to make the leap.

That drives people to individual homes. That works great sometimes, but buying a house isn’t for everyone. And what we’re seeing is that people can often find themselves in homes they can’t afford, or that they can’t sell when they need to.

In the case of many Range communities, dilapidated homes become impossible to sell and expensive to fix. Enterprising house-flippers make some places work. But when whole neighborhoods are in rough shape that’s a tougher sell.

This is one of the reasons I would argue that we need to look at the heart of Iron Range communities. What can we do to raze, renovate, re-use and rebuild our way to more vibrant communities? It’s clear that the demand is there, but we must not price people out of new development.

Comments

  1. “Construction costs have risen dramatically in the past 20 years”. – If the DFL would support Minnesota becoming a right-to-work state, this wouldn’t be an issue..

  2. As I have talked with city officials over the years, one big concern is those who come in and build/renovate/manage rental housing but do not live in the communities and therefore, do not see the maintenance issues over the years, leaving buildings in disrepair. Often those buildings are the ones most affordable because no one lives there by choice–more or less, it’s what is available that I can afford.

  3. There is such as thing as public housing. Perhaps municipalities should get back to building and managing housing rather than throwing money at developers with their own agendas…..

    • OMG…the last thing we need is local government in the housing business. They have their hands full trying to keep the streets paved.

      • David Gray says:

        It is a tribute to the power of intellectual inertia that we still have advocates for building modern Cabrini–Green projects.

        • It’s a tribute to the power of intellectual inertia that when people think of publicly subsidized housing they still think of Cabrini-Green.

          • David Gray says:

            It’s a tribute to illiteracy that someone confuses subsidies with owning and managing public housing.

  4. Cabrini-Green was conceived and started 70 years ago and completed 55 years ago. Take a drive around the Northland, and you will see many contemporary functioning public housing projects, with many happy and satisfied occupants and neighbors, ranging from housing for the elderly and disabled to housing for low income families. If you want to attack the idea, attack them, since they are the relevant model. The problems that were built into Cabrini-Green are just not part of modern public housing, in part because of the lessons from Cabrini-Green and other similar projects.

    Public ownership, public subsidization, tax incentives, and direct aid to renters are all part of the package in dealing with shortages of housing for people who are rapidly being priced out of the market. As Aaron noted elsewhere, the progress of automation in the work place is going to make this problem worse, not better.

    I know that conservative ideology is offended by government participation in anything. However, attacks suggesting that a project that dates to the days of the Edsel is a relevant model add nothing to the discussion. If you have some positive ideas, that would be welcome.

    • You’re confused Gerald. Government must participate, but only in what it should. It needs to stick to it’s knitting. Government’s job isn’t to provide personal goods for the people. That list becomes endless…and they’re a terribly inefficient institution.

  5. Gerald is not the one who is confused.

    • David Gray says:

      But he is the fellow who insists he knows more about the nature of township government under Minnesota statute than the Minnesota Association of Townships and the Minnesota Supreme Court. Always keep that in mind.

      • Gerald. S says:

        In both your citations about that, the article and the court decision contradicted your position by the time they reached their conclusion. In both cases your interpretation was based on just reading the introductory paragraph. I know you are bitter about it, but you have to read articles all the way through to find out what they actually say.

  6. Wow, Ranger, I didn’t think there would be an issue we would agree on but wonders never cease. The government, House and Senate, are about to add $1.5 Trillion to deficit and hand over most of that money to big corporations and the ultra wealthy through permanent tax cuts. Tax cuts if any, for the rest of us will not be permanent, taxes will rise for lower income Americans and many middle and upper middle income earners by 2027. Republican Senators and Representatives are already talking about paying for the added deficit by cutting Social Security, Medicare, Medicaid. There will be an automatic $25 Billion cut to Medicare in the first year. CHIPS still hasn’t been funded for 2018. It’s an outrageous government money grab from hard working Americans and sick children to hugely benefit the wealthy and their heirs.

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