Jobs coming to SW Minn. bring housing woes, too

Townhomes in Jackson
These townhomes in Jackson in southwest Minnesota were built more than ten years ago. The city, and others around the state, need more housing like this as local employers add more jobs.
Mark Steil / MPR News

Local leaders here cheered when tractor manufacturer AGCO announced plans to expand operations and add jobs. Then the worrying began.

In a region already struggling to meet its housing needs, officials couldn't easily answer a basic question: Where would the new workers live?

"There's big housing concerns in the area," said Eric Fisher, local operations director for AGCO. About 1,300 people work at AGCO's Jackson operations but 25 percent must drive more than 30 miles to get to work. Some come from as far away as Mankato or Sioux Falls, S.D., an hour and a half drive, one way, and those hoping to move here can't often find an apartment. "It's one of the biggest challenges" to growth, Fisher said.

Housing shortages are a problem for growing communities across rural Minnesota. Even as towns add jobs, private developers shy away from the market because profit margins are too low to make decent money on new rental units. Non-profit housing groups are trying to fill the gap. In most communities, they're the only ones putting up new rental housing.

Finding answers requires the towns work together with the companies and non-profits. That's happening in Jackson, though it's not simple.

Townhomes are in high demand.
The community of Jackson in southwest Minnesota is experiencing a pressing demand for new housing because of a growing local economy. These townhomes were built about 15 years ago, but the city needs more rental units.
Mark Steil / MPR News

A typical apartment building deal may have more than a half-dozen different entities at the table, representing state, federal and local government programs as well as private lenders and local employers, said Ann Ziebarth, a housing studies professor at the University of Minnesota.

The non-profits usually are the deal-maker, crunching the numbers and getting everyone to sign on to make the project work, she said.

That's a role the Southwest Minnesota Housing Partnership has played in dozens of projects across the state. The group, the largest housing non-profit outside the Twin Cities, owns about 1,500 rental units across the state and has helped finance or rehabilitate thousands more houses, apartments and townhomes in about 30 Minnesota counties.

Map: Homes owned and/or developed by SWMHP

Source: SWMHP

It normally takes two or three years to put together an apartment or townhome project, so persistence is important said, Rick Goodemann, the group's CEO.

Manufacturing growth adds to housing shortage.
AGCO is adding jobs to its manufacturing plant in Jackson as it increases production of tractors and other farm equipment. The employment surge is causing a housing shortage in the southwest Minnesota community.
Mark Steil / MPR News

That persistence paid off most recently in the housing hungry community of Jackson. The group is developing a 48-unit townhome project to be built next year. It will ease the AGCO expansion, which is expected to add 100 jobs over the next three years. AGCO even kicked in $220,000 for the project.

"This is huge," said Sue Pirsig, Jackson's economic development coordinator.

Some of the two and three-bedroom units are subsidized for low-income renters, others will charge market rates. But even when the new units are occupied, the problem won't be solved. Jackson will still need more housing.

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