Local EDA president Howard Hedstrom is correct when he suggests, “Problems associated with housing were determined to be the most significant economic development issue facing Cook County.” Hedstrom was referring to the 2013 findings from the Cook County Go Team’s research study conducted by The Northspan Group of Duluth, a nonprofit economic development consulting group.
A year into my term as commissioner, I joined community leaders to attended a Go Team retreat held in Lutsen, December 2013. Among the topics discussed were strategies that would meet local needs for affordable housing.
During the discussion it was suggested by one of the attendees, “There may be an opportunity to make a profit here.” I immediately raised my hand and offered that the notion of “profit” and “affordable” would appear to be conflicted.
A Breckenridge, Colorado 2013 Summit on Workforce Housing concluded, “As a community becomes a popular vacation and/or retirement option, with a limited supply of land and housing, real estate prices become increasingly unaffordable to the local workforce creating an affordability gap between what is offered in the community and what the local workforce can afford. When the workforce is displaced or priced out, it becomes harder to sustain a vibrant economy, to fill jobs, to retain families, to service visitors, and satisfy the needs of the community.”
Two years into my term, October 2014, I attended a housing and community dialogue symposium convened at the Discovery Center in Chisholm. Participating in the symposium were state housing agencies, state senators, IRRRB, and a representative from the United States Department of Agriculture (USDA).
State Sen. David Tomassoni (DFL) District 6 stated, at the outset of the symposium, “Quite frankly, housing is an issue that is one of the biggest challenges we face. If we are going to grow in this region of the state, we will need to create adequate housing.”
Tomassoni’s sentiments were echoed by Mary Tingerthal, commissioner of Minnesota Housing, “An attractive housing market for young families does not exist on the Iron Range.”
Ms. Tingerthal’s use of the term “attractive,” in the context of the discussion, focused specifically on the matter of affordability. Housing is considered “affordable” if rent and utilities are no more than 30 percent of a person’s income.
So, how attractive (affordable) are the proposed rental rates for the Lutsen single family units?
According to One Roof Community Housing’s deputy director, Cliff Knettel, whom the EDA is partnering with in spearheading this project, “We know the market very well. We know that our proposed rents are in line with other rents in the area.” Rents are projected to be $800 for one bedroom and $1,100 for two bedrooms, which will include utilities.
The median rent for Cook County, according to 2014 U.S. Census data, is $655 a month. By comparison, the median rent for Lake County is $680 a month, and the median rent for the entire state of Minnesota is $848 a month. Again, it should be pointed out that households who pay more than 30 percent of their gross income are considered to be “rent overburdened.”
John Patterson, Minnesota Housing’s director of Planning, Research and Evaluation, observed, “The number of costs burdened households is increasing. Costs are going up, and incomes are going down.” In Cook County, a household making less than $2,187 a month would be considered overburdened when renting an apartment at or above the median rent of $655 a month. According to 2014 statistics, 34.52 percent of households who rent in Cook County are overburdened.
While we may all agree the lack of affordable housing continues to plague Cook County, it remains to be seen whether we can agree on what we consider to be affordable.
“What we see out there is an affordable housing crisis, particularly in the rental market in cities big and small, and we don’t have the resources necessary to fill that gap.”
Julian Castro,
16th U.S. Secretary
of Housing and
Urban Development
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