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Housing Remains Pressing Rural Challenge

By Reed Anfinson
Swift County Monitor-News
There are three fundamental challenges rural Minnesota faces in attracting workers and new residents who want to live away from the hustle, long commutes and dangers of a large metropolitan area.

They see a place where kids can grow and thrive in a safe environment; a place where their children have an opportunity to become a meaningful part of a team, or choir, or high school club.

To bring those families here we need more affordable housing, more child care and high speed internet. We may have made progress with the internet and child care, but housing remains the primary challenge.

“Many communities in Greater Minnesota are facing a workforce shortage with well-paying jobs going unfilled,” a study on rural Minnesota’s workforce shortage by the Center for Rural Policy & Development (CRPD), said. “The biggest barriers to attracting workers in to fill these jobs, workforce experts tell us, are a lack of child care and a lack of available housing.

How can our rural western Minnesota counties have lost a quarter to one-third of their population over the past 70 years and not have a surplus of homes standing empty?

One obvious answer is that many of those homes in the late 1940s to the early 1960s had large families. Families with four to six children were common. Some families were even larger. Today, many families have one to two children. A larger population back then doesn’t equate to a surplus of homes today. We have more households but fewer people.

Another reason we don’t have a surplus of homes today is that many older homes became so dilapidated over the years that they were torn down.

One reason we might not suspect as a cause for a housing shortage is population growth. While it is hard to tell at times, U.S. Census data shows a slight population gain for a fair number of rural counties in recent years.

“Most counties in Greater Minnesota are growing in population thanks to the in-migration of immigrants looking for jobs and urban and suburban residents looking for more space and a slower pace of life,” a look back at the 2018 study by CRPD’s Vice President of Research Marnie Warner says. “Hence, an increasing demand for housing in many parts of the state.”

Since that 2018 study, we’ve added the supply chain problems caused by the COVID-19 pandemic that had created a scarcity of some construction products and furnishings for houses. We’ve seen construction costs skyrocket because of shortages of materials. We’ve seen shortages of people working in the trades slowing home construction and increasing labor costs.

Werner points to U.S. Census data that also shows there are more people living in two-person, or single-person, households today.

A final factor leading to the housing shortage is “a trend of middle-age householders (30- to 49-year-olds) moving to rural areas in search of more affordable housing or, after 2020, in search of more space,” Werner writes.

We know the problems, what are the solutions?

There is a cycle to homeownership in a community. A young couple buys an affordable starter home but as children are born, they may look for someplace a little bigger. When the kids graduate, the empty-nesters may look for a smaller house. When they are still older, they look to a single-floor house with services such as lawn-mowing and snow-blowing. From here, they may move into an assisted living facility.

Each step creates turnover in the housing market, making way for new families and workers. However, in many of our rural communities, this “churn” mechanism is broken, Werner writes.

“Few rural communities, though, have the kind of housing designed for aging homeowners to transition into, and therefore they stay in their homes as they age. Without any senior housing options, the local housing supply is like that gear but missing a cog,” Werner writes. “The gear malfunctions, everything grinds to a halt, and people get stuck where they are. No one can move forward to the next stage.”

Werner explains that the fix to getting home churn moving again isn’t just building new housing for young workers, it is also making sure you have adequate housing for older residents to transition to as they look to downsize.

We know that a broken churn cycle is just one hurdle facing housing expansion. Other challenges include:

- Young families can’t afford down payment or the mortgage;

- Lenders are warry of home loans in rural areas with declining population due to worry about resale value;

- Workers need faith that their jobs will be there, or other jobs available, in the coming years, giving them the confidence that they can sink down roots with a home purchase;

- Wages have gone up considerably in rural Minnesota, but so has the cost of housing.

- Home prices can exceed the appraised value making loans challenging to get financing.

We are competing with hundreds of other communities and thousands of others in the country for workers. The communities and counties that are innovative in figuring out how to provide housing to prospective workers, addressing each of these challenges, will be the ones with the most secure future.

“For Greater Minnesota, the housing shortage is about more than mortgages and construction materials. It is about economic development, finding ways to ensure our communities and local businesses can grow and thrive. Right now, the lack of workforce housing is holding us back,” Brian Holmer is mayor of Thief River Falls and Shane Zutz is vice president of human resources for Digi-Key, told MinnPost.

To address the challenges, communities need state help. The two suggest:

- Create and fund a new “Greater Minnesota Fix-Up Fund” to provide grants to assist cities in rehabilitating dilapidated housing.

- Pass a bonding bill to help communities offset the cost of providing essential infrastructure like water and sewer.

- Put additional money into the existing Greater Minnesota Workforce Housing Development Fund.

- Target solutions to local challenges.

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