Southeastern MN: housing challenges for changing communities

Local stakeholders from southeastern Minnesota identified workforce housing and increased commitment to culturally-specific support at a regional housing dialogue in Faribault last month. The dialogue was held by Minnesota Housing, Greater Minnesota Housing Fund (GMHF), and USDA Rural Development. Housing and community leaders were briefed on housing trends in the region, shared local insight, and brainstormed solutions to housing and development challenges facing their communities.

In recent years, Minnesota Housing, USDA and GMHF have hosted community dialogues across the state in an effort to inform and learn from community leaders. The Faribault event was one of several being held across the state — the next regional housing dialogue will take place Tuesday, December 15 in St. Cloud. 

Minnesota Housing provided a detailed overview of key housing trends in Le Sueur, Rice, Goodhue and Wabasha Counties in southeastern Minnesota. While the area has seen an increase in homeownership, more homeowners are cost-burdened (i.e. spending more than 30 percent of monthly income on housing) today than ten years ago. Over the last decade, median monthly homeowner costs have increased while median monthly household income decreased anywhere from $2,000 to $5,000 in all four counties. In 2014, the median home sale price ranged from $139,000 to $165,000 — below the national and state averages — and the region housed 20 percent more cost-burdened renters. 

In southeastern Minnesota, demographers are projecting a decline in household formation over the next 30 years while communities of color or Hispanic ethnicity are slated to increase by over five percent (in the next 10 years), making it necessary for housing and community developers to plan for more diverse communities. Rice County has the greatest homeownership disparities between white households and households of color or Hispanic ethnicity. According to the American Community Survey, 78 percent of white households in Rice County own a home while only 44 percent of households of color or Hispanic ethnicity own their own homes.

While jobs increased since 2009, Rice County is alone in experiencing a significant increase in household formation since 2013. Many workers would move to the area if housing were available but are forced to commute to the region’s job centers from other counties. Almost no new housing stock was added to the area’s market in the last 10 years, which presents a major challenge for community developers as 50 to 70 percent of the housing stock was built before 1980. Much of the affordable, subsidized rental housing stock was built in the 1970s and needs to be rehabilitated.

Jenny Larson and Athou Lam of Three Rivers Community Action, Abdullah Hared of Somali Community Resettlement Services, and Randal Hemmerlin of the Red Wing Housing and Redevelopment Authority all shared their perspectives on the region’s challenges. Lam and Hared spoke about the need for more linguistic and culturally appropriate services for Somali families wishing to own homes and for housing that could adequately accommodate larger household sizes. Hemmerlin expressed his disappointment that Red Wing was denied funding by Minnesota Housing for almost 10 years despite the demonstrated need for more rental housing for workers with moderate incomes. He elaborated on the difficulties rural communities experience scoring competitively in Minnesota Housing’s Super RFP process, which awards tax credits to housing development projects. The issue of “middle ground” housing for the area’s workforce was also cited as a top priority from participants in the single family and multifamily discussion groups.

Due to the area’s aging housing stock, significant attention was paid to preservation with some citing a need for stronger inspection processes in order to maintain properties. Minnesota Housing pointed out that much of the area’s subsidized housing stock is nearing the end of its 30-year affordability period. Facing this reality, planners and housing advocates must find ways to preserve the affordability of these properties while finding capital to make improvements in order to offer quality, affordable housing.