Why Investment in Workforce Housing is Critical

Stumpf PortraitAccording to the Minnesota Rural Counties Caucus, who has lobbied the legislature on behalf of small towns and rural counties for more than two decades, workforce housing has risen from a never discussed topic – to the number one priority in a matter of a few years. This need has never been more apparent than in the small town of Roseau, population: 2,627.

Roseau is the quintessential northern Minnesota small town, with close-knit families and a strong hockey tradition. The town’s high school team has played in the state hockey tournament the second most of any school in the state. The city of Roseau is located in Roseau County – which is lucky enough to be home to Polaris Industries. Polaris employs 1,600 people in the area – and according to a 2012 Roseau County Market Study, the area is experiencing lower than average unemployment rates. The recession is over and Polaris is expanding.

The low unemployment rate has also led to an influx of new workers. A growing number of new residents and a surging economy has led to extremely low vacancy rates (0-2%) for market rate rental housing. The study also found significant demand for new market rate rental units and owner-occupied housing units by the year 2020. Unfortunately, Roseau County is largely rural, and does not attract developers the same way more urban areas do.

Here is where the state can step in to offer assistance. Conventional wisdom may teach the supply and demand economics theory that when demand goes up (for more rental housing) – supply (developers) will naturally step in and fill that demand. However, this theory doesn’t apply everywhere including many small one-company towns across the state. This is a problem for several reasons, first these companies want to expand. Expanding business is good, it means more jobs, more economic development and a growing tax base for the city and state. But when companies struggle to attract quality workers because they can’t find a place to live, growth stagnates and expansion plans are put on hold.

This is the gist of the problem that many of my Senate and House colleagues and I are working on this session. I began working on it last year with a small Department of Employment and Economic Development pilot program that gives grant money to help kick start development projects. This year I’ve also introduced a bill that goes further. The legislation I have authored establishes a workforce housing grants program. This proposal provides for $10 million in grants to local units of government for market value workforce housing needs outside the metropolitan area in communities of at least 1,500 people. The money would be available to cities hoping to kickstart building proposals.

I’m not alone in my work to bring help to areas that need investment in workforce housing projects. There are several bills working their way through the House and Senate that focus on jobs training, career counseling in rural areas and several additional workforce housing bills that offer tax credits to investors and grant money to developers. Investing in workforce housing makes sense for the entire state. When businesses are not hindered by a lack of housing in their communities, they are free to grow and expand – bringing more money into the state and well-paying and stable jobs into our communities.

For more information, Sen. Stumpf can be reached at LeRoyS@senate.mn or at (651) 296-8660.

Senator LeRoy Stumpf
LeRoy Stumpf represents District 1, which includes all or portions of Kittson, Marshall, Pennington, Polk, Red Lake and Roseau counties in the northwestern part of the state. He is the chair of the Capital Investment Committee.

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