Housing is the topic of conversation lately. You may look at it and wonder why all this housing is needed. And what kind is it.
The buzz words these days are market rate, workforce, senior living, and subsidized/income based.
The first two are the same, just a fancy word. They don’t include any government money in the pot, just a nod to the fact that they are needed to house our workforce that is looking for places to live. They pay a rent amount for whatever the landlord decides the market can afford or in-line with the market. Most of what is coming right now is in this category.
There is also some senior housing and memory care in the works. The parcel at the former K-Mart is slated for senior housing and another apartment building when the right time comes.
On the March 8 meeting we are making formal agreements with three developers to look at developing buildings in Faribault.
The city had a study done not too many years ago that identified that Faribault needed about 500 more apartment units. This study only looked at apartments and not other types of housing.
We are about halfway to where we need for the number of units in the Faribault area. This is in addition to the three that have been recently built and the ones going into the former Masonic Lodge.
C&S Vending is looking at using vacant space on the south side of its block to develop housing because the company has identified that it needs places for existing and incoming employees to live.
Some of Faribault’s larger employers have also identified that same need and are looking at creative ways to develop places for their employees to live. This is a real concern for them and is creating a lot of job vacancies in the community.
When they hire an employee and they can’t find living accommodations near here, they may end up living in the south metro. They employee may start looking at a shorter commute with an employer closer to their new residence, thus creating an opening where they just had a job in Faribault. It is a cycle that Faribault is looking for a way to slow down.
There is a coalition working between city, county, chamber of commerce and private interests to create more home ownership opportunities.
If you have looked at the real estate market anytime in the last couple of years, you have noticed the price of housing is much higher than it used to be. This also makes it harder for these new prices to fit into the budgets of working families.
This coalition is trying to find ways to build affordable housing that would let people own a house and take pride in that ownership. The goal is to build them and allow a slow appreciation on them so that future generations can also still be able to afford and maintain them. Exactly what this plan will look like or what these houses will be, remains yet unanswered.
Often people ask me why there isn’t the building going on in Faribault that there is in towns to the north of us. This is normally driven by the final value of the house.
Think for a minute that you are a builder. You go to the local lumber store and look at a 2×4. Now, if you buy that board in Faribault or Elko it will cost you the same price. But you know that when you are done building a new house that board becomes worth significantly more. And now you can build that house in Faribault and it will be worth $300,000. In the south metro that home is worth maybe $500,000.
So as a builder you’re going to follow the dollar. That’s what the challenge is in Faribault. Of course these are hypothetical numbers and there are a lot more factors that go into it, but that is an over-simplification.
What does all this mean to you as a Faribault resident and why would you want more people living in Faribault? Every retail establishment and restaurant look at population size, community income, distance to nearest location and a few other factors to determine where to place their money to be able to make more money. More people means a better shot at getting a chain restaurant, a big box hardware, a new movie theater or an entertainment zone.
The more housing there is, and the more commerce there is, the more room to spread out the tax dollars needed to operate the essential services the city provides. Thus, keeping our taxes lower and more money in your pocket to decide how you want to spend it.
Did you know our property taxes are still lower than Northfield and Owatonna? Just a note.
As always, feel free to reach out to me with any questions you may have. The council meets almost every Tuesday, and you’ll find me on KDHL the morning after council meetings on the 8:05 a.m. news report.