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Housing needs take center stage for economic development

Area communities are looking to housing development strategies to address a growing need, and public-private partnerships have been invaluable in creating new housing projects. That public assistance helps bridge a gap that has been more than a decade in the making between the costs of construction and development and market values in rural communities.

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The Thunder Hawks apartments are under construction in Montevideo. The community is working to meet housing needs as it prepares for the addition of 140 new full- and part-time jobs with the opening of the new veterans home in 2023. Tom Cherveny / West Central Tribune
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BENSON — Early census numbers show Benson’s population grew by over 7% in the last decade.

The news came shortly after the community celebrated the opening of the Benson School District’s Performing Arts Center . Job numbers are up at local manufacturing plants, and the school district’s new child care center at the Northside Elementary has put the community in the enviable position of offering child care services not always available in small towns.

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The presence of the full-service, Swift County - Benson Hospital and Clinic has helped attract retirees to make the town home. And, investments in broadband have played a similar role in attracting professionals who are working from their homes when their spouses take jobs elsewhere in the community.

It’s all part of a forward momentum that recently brought another piece of good news to the Swift County community of about 3,400 people. A developer announced plans to work with the city on the eventual development of 26 rental units, part of 13 one-story townhomes.

The momentum helped attract the developer’s interest.

“People like to be part of growth,” said Hillary Tweed, director of the city’s Economic Development Agency and Housing Authority.

But, without a doubt, she said the housing development is only possible because of a public-private partnership. The city is working to develop a tax increment financing district to assist in the development costs for the housing project.

Public assistance an essential element

Public and private partnerships are the essential element of the housing projects being seen throughout the region, according to Chad Adams, director of the Southwest Minnesota Housing Partnership .

The public assistance helps bridge a gap that has been more than a decade in the making between the costs of construction and development and market values in rural communities.

“That’s the real problem,” said Dawn Hegland, director of the Upper Minnesota Valley Regional Development Commission, of the gap. Communities throughout the five counties served by the commission have identified housing as among their priorities for growth. Their strategies focus on bridging that gap.

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Aaron Backman, executive director of the Willmar/Kandiyohi County Economic Development, said that he hears directly from employers in the area about the need for housing. It’s becoming an increasingly important issue as they attempt to recruit workers. Tom Cherveny / West Central Tribune

Housing has become a “key” aspect of economic development, said Adams.

“Crucial,” said Aaron Backman, director of the Kandiyohi County and city of Willmar Economic Development Commission. Like Benson to the west, Willmar and communities in Kandiyohi County are also taking advantage of economic growth and focusing on housing development. He can cite a variety of examples, especially in Willmar, where public-private partnerships such as the 15th Street Flats are aimed at meeting housing needs.

Willmar is one of the very communities that has been able to develop a Renaissance Zone on top of an existing federal Opportunity Zone to make possible local incentives for housing development, he said.

Backman said that he hears directly from employers in the area about the need for housing. It’s becoming an increasingly important issue as they attempt to recruit workers, he said.

Of course, he’s also well-aware of the angst that those who are looking for housing experience. He said the West Central Realtors Association reported that the number of homes for sale in Kandiyohi County during July totaled 100, as compared to 184 for the month one year earlier. New London saw its inventory of available homes drop from 30 homes on the market in July of 2020 to just eight in July of 2021.

Answering the call to fill housing gap

Renville County has an aging population and census figures showed an overall population decline. Yet, the housing gap remains one of the most pressing economic development issues there as well, according to Jordan Zeller, economic development director for the county.

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Jordan Zeller, economic development director of Renville County, said the need for housing was easily the most discussed topic at a job fair held in August. Tom Cherveny / West Central Tribune

When the county held a job fair in August, the need for housing was easily the most discussed topic, he said.

“What we’re hearing from employers is ‘can you find places for employees to live?’” said Zeller.

The county has developed its own housing gap program to help answer the plea. Like other rural counties, there are a large number of older homes in the county, and a share of them are at a point where rehabilitation is needed. Zeller said the county is looking at ways to offer down-payment assistance to those willing to buy and rehabilitate the older housing stock.

Taking advantage of the older housing stock is increasingly important in a period of inflationary costs for building materials, he said.

Backman and others emphasized that it is a wide diversity of housing that is needed: That is, everything from rental units for single persons entering the labor market to single-family homes and maintenance-free homes for retirees.

Granite Falls recently obtained state grant funds to help jumpstart the market by building new homes.

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Workers are shown as construction got underway in the spring of 2021 on a new apartment building in Montevideo. Tom Cherveny / West Central Tribune

Construction is underway in Montevideo on the Thunder Hawk Apartments as part of a public and private partnership to meet rental housing needs. The city is expecting to see 140 new full- and part-time jobs with the opening of a 72-bed nursing facility for veterans in 2023.

Willmar has seen its population surpass 21,000 as employers continue to add jobs. The community is one of 15 rural regional centers to see growth in the last 10 years. Of those 15, only four had bigger increases than Willmar, said Backman.

“We’ve been doing some good things here,” he said. Continuing to do what it takes to meet the housing needs of the area will be critical to keep the momentum going, he added.

This story was originally published in the West Central Tribune's IMPACT edition on Oct. 23, 2021. More stories in this section can be found at https://issuu.com/westcentraltribune/docs/impact_2021

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Economic development directors in the region point to the importance of public and private partnership in making housing projects possible. The City of Willmar has worked to provide local incentives to make possible a number of developments, including the Block 25 apartment complex at this site downtown. West Central Tribune file photo

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