ST. PAUL — Greater Minnesota communities and businesses are stymied by a shortage of housing around the state, local leaders told a panel of state legislators on Tuesday, Nov. 2.
Limited housing options in more rural parts of the state restricted businesses there from growing since workers can't find homes nearby. And because the communities have lower rent than larger metro areas, developers aren't as eager to kick off new projects there, they said.
The result left county commissioners and housing authority leaders feeling stuck as they came before the Legislative Commission on Housing Affordability on Tuesday. The local leaders pressed legislators for more tools to boost available housing options.
“Housing is now more than ever an economic development issue," Heartland Lakes Development Commission Executive Director Mary Thompson told the panel. Thompson works in Hubbard County and she said that despite efforts between the county, cities and businesses in the region to put up additional housing, they couldn't meet the need there.
Roseau County Commissioner Jack Swanson echoed the comments and said the county's shortage of available homes meant workers at area manufacturing companies such as Polaris and Marvin Windows had to live in area hotels until a home became available.
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"Workers here can afford housing but there is simply none available," Swanson said. “You would assume that free-market supply and demand would solve the issue but private developers will not build in rural Minnesota for the most part because the rents they can get in a larger market ... are about 50% higher than they can get in Roseau County."
Even in larger cities, the shortage of available homes drove up median prices and limited the pool of Minnesotans who could afford to buy there. In Rochester, the cost of a median starter home jumped 34% between 2015 and 2021, representing an increase of $104,000.
With fewer new homes being built in the region and more buyers being priced out of the market, Olmsted County leaders said they worried they'd miss their benchmarks in developing Rochester as a destination medical center. The $5.6 billion public-private partnership aims to make the city a top stop globally for health and wellness.
“We can’t create 30,000 jobs if we don’t have 30,000 places for people to live," David Dunn, Olmsted County Housing director, said. "So as we think about this and we think about the needs in our community housing is directly prohibiting us from meeting our economic development goal."
Lawmakers on the panel didn't propose any policy to resolve the problems Tuesday but they said they'd begin weighing ways the state could help Greater Minnesota communities with their housing needs in later meetings.
Advocates for Greater Minnesota cities and small cities also asked lawmakers to consider options to fix up existing properties and blighted houses. And they asked lawmakers to consider boosting funding to the workforce housing development fund.
Follow Dana Ferguson on Twitter @bydanaferguson , call 651-290-0707 or email dferguson@forumcomm.com
