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What do you do when you are losing good employees because they can’t find suitable housing they can afford? You either find accommodations for them or, in Hedstrom Lumber Company’s case, you decide to build affordable employee housing.
When asked what prompted the move, Tina Hegg Raway, Hedstrom’s Vice President of Financing, answered, “A couple of years ago, we discovered that the majority of new employees who left Hedstrom Lumber decided to leave the area entirely – and the most common reason was due to lack of affordable housing.” “We’ve operated steadily for over 100 years, employing about 40 people currently, and we recognize the value of the diverse jobs and industries related to the lumber mill for Cook County’s tourism dominated economy. We processed 40,000 cords of timber last year, impacting many foresters, loggers, truckers, and support staff throughout Northeastern Minnesota in addition to our employees.”
While the COVID-19 pandemic has had a decidedly bad effect on some industries, it has had the opposite effect on the sale of lumber. In March of 2020, across the country, many mills were idled by the pandemic. A month later, in April, a surprising number of new houses were being built, and the office worker who was now operating from home (the do-it-yourselfers) started repairing their homes in record numbers. All of this activity led to sales of lumber increasing and, in some cases, demand that couldn’t be immediately met—good news for mills like Hedstroms.
“The pandemic drove a surprising increase in demand for lumber, which means we have been very busy,” Tina said. “We have an amazing crew right now, but we are always looking for a couple more people because entry-level jobs turn over most frequently. In order to ensure a bright future, we need steady and talented employees who are happy to work here and who can afford the extra expense of living in Cook County.”
“This led us to look at properties near the mill for a small employee housing development of high-quality, brand-new manufactured homes situated on wooded lots. We hope to install three rental units on a five to ten-acre site.”
“Often, the low-cost housing available in the county is run-down, lacks basic utilities, or is located far away from available jobs. Our goal is to offer desirable homes, which are also low-cost and efficient. Employees would be able to occupy the units while employed at Hedstrom Lumber.”
We have some experience operating an employee rental house for decades already, and have learned that this enables employees to stay for a number of years and transition into homeownership as they grow in their careers.”
The cost of building in Cook County, especially for a younger person, is often out of reach. Even for Hedstrom’s Lumber, installing housing isn’t cheap, so to defray some of the infrastructure costs, the mill secured a grant from the Cook County/ Grand Marais Economic Development Authority (EDA).
That grant money, said Hegg-Raway, will help pay for infrastructure costs such as septic, well, site clearing, electric, and broadband.”
“Building within city limits is cheaper for developers because much of this is already in place, but building outside of town allows renters to save money by avoiding the monthly costs of city utilities,” said Tina. “The EDA has offered us a grant of $50,000 to help with these startup costs in order to keep the rent low, and we are excited to begin the process of purchasing land, working with site prep vendors, and getting the units set up this year. We look forward to this pilot project, which we hope will bring success and may serve as a model for other small, private company developments in the area to help with the persistent housing crisis,” she said.
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