In Faribault, a lack of affordable housing has limited an otherwise robust decade of growth, but events in recent months have provided indication that the tide may be beginning to turn.
After years of effort, the city’s initiative to lure multi-family housing developers to town has enabled the city to secure numerous projects. Once all projects currently in the works are complete, more than 300 units will be added to Faribault’s housing stock.
Just three years ago, the city’s rental vacancy rate sat at less than 1%. Now, projects soon to be completed include the 44-unit Hillside Apartments, 111-unit Straight River Apartments, 76-unit Lofts at Evergreen Knoll, and 68-unit Titan Development project.
Ironically, the rapid expansion of Faribault’s housing market is coming just as the economy takes a COVID-induced nosedive. While the housing market generally remains strong, it’s unclear exactly what affects COVID will have.
As the number of new projects has piled up, the city Housing and Redevelopment Authority hasn’t taken a comprehensive look at what impact each project might have on the broader housing market and the need for/viability of future projects. That changed on Monday night. At its meeting, the HRA authorized just over half of its $20,000 budgeted for consulting services to commission comprehensive rental housing study from Golden Valley-based Maxwell and Associates.
Boosting the city’s multifamily housing stock is one way to address the city’s lack of housing, but housing shortages exist at nearly every price point, according to Community and Economic Development Director Deanna Kuennen. Before COVID-19 hit Faribault, the city was planning on conducting an aggressive recruitment effort to bring single family home builders to the area, as was successfully done with multifamily unit builders.
That’s not to say logistical challenges don’t exist when it comes to building more single family homes in the area. Kuennen said that one major challenge is that many single family lots are held by individual property owners hesitant to sell for a competitive price. Part of the solution to that issue could be the cooperation of local businesses. Several local businesses, including Faribault Foods, have been in conversation with the city about providing land for housing developments.
Another issue is the city’s lower property values, compared to the south metro. While the cost of building a house is much the same in Faribault as in the metro, higher property values ensure a greater profit margin.
“Developers have consistently told us that it’s all very market driven,” said Kuennen. “There’s a known market in the south metro that they know they can get.”
Dave Campbell of Weichert Realtors said that in many cases, the advantage of building in the south metro can be as much as $50,000 to $60,000 savings. However, if the numbers can be made to work in Faribault, buyers can enjoy a less expensive home with lower taxes.
With the housing market so tight, many families are forced to look for housing elsewhere. As a result, Faribault Area Chamber of Commerce and Tourism President Nort Johnson said that businesses sometimes lose good employees who want to work where they can afford to live.
The issue isn’t unique to Faribault. RE/MAX Agent Matt Gillard said that in Owatonna, the market is also incredibly tight. At any one time, the number of single family houses on the market is only around 35 — a fraction of what is considered a healthy number.
Owatonna Area Chamber President of Commerce and Tourism President Brad Meier agrees. As in Faribault, he said that the growth in multi-family housing supply has grown farm more than single family housing supply.
“The shortage of single family housing has made it hard for folks to find what they need,” he said. “Growth within the market is needed.”
Nonetheless, Gillard said that new home construction is very expensive and only a handful of builders are willing to take a risk of a so-called “spec” or speculative home. In part, that may be because Owatonna’s housing market tends to be more affordable. Gillard said that while he believes the government should mostly stay out of the market, recruiting more developers willing to build spec homes would help supply come more in line with demand. He also pointed to regulation as a potential barrier to housing development.
Sen. Rich Draheim, R-Madison Lake, has worked extensively on increasing access to single family housing, and he said that he believes Minnesota’s regulatory code is among the state’s greatest barriers to housing development.
Draheim, who owns a Weichert Realtors branch in Mankato along with other businesses, was tapped to chair the Senate Select Committee on Home Ownership last spring. Out of that committee came a series of bipartisan bills designed to make homeownership more affordable.
Draheim has said that reducing regulation is important. He says that Minnesota’s is among the strictest in the nation, and that by loosening it the state can open up the door for more people to benefit from home ownership.
In addition to potentially reducing the rate of COVID spread, efforts to meet the growing demand for affordable single family homes have numerous other benefits, helping families to build sustainable wealth and stable communities.
“We know that ownership opportunities help start up families, generate wealth, by owning an appreciating asset,” Johnson said. “We think more ownership opportunities will help lift Faribault workers into a new category of middle class workers.”
Faribault City Councilor Jonathan Wood, who owns a construction business, said that it’s important that the city help to attract builders focused on all segments of the market. He said that a lack of supply in one part of the market trickles down to other parts of the market.
Wood has built hundreds of homes, with a business model mostly focused on appealing to upscale customers by using high quality materials. He said that many of his customers are retirement age or near-retirement age.
“ I can go out and go to Menards and buy the cheapest window, but that doesn't satisfy a good chunk of the market,” he said. “They expect a really nice product.”
Wood said that, due to Faribault’s lower property values, it’s a challenge for builders like him to make the numbers work. Even though his homes have been popular in area cities, like Dundas, he hasn’t been able to build much in Faribault.
Wood said that by working with local lending institutions, it’s possible that an agreement could be reached to incentivize higher end home building. That, he said, could open up the market for more affordable houses and rentals as well.
“If we can cater to people who want to buy a nice house, you’ll see them move up,” he said. “Now, suddenly there’s 30 more houses with vinyl siding, and then 30 more rentals available.”
With many of Minnesota’s adult daycare providers on the brink of financial ruin, several local legislators are calling on the state to provide a lifeline.
In a June 8 letter, state Rep. Jeff Brand, DFL-St. Peter, joined representatives John Petersburg, R-Waseca, and Brian Daniels, R-Faribault, in asking Gov. Tim Walz to support legislation that would provide some $30 million in COVID-19 retention grants for service providers.
A bill to do just that was sponsored by Sen. Jim Abeler, R-Anoka, and passed by the Senate in the year’s first special session by a unanimous vote. However, it lacked a companion bill in the House and subsequently died.
“(Our disability service providers) haven’t been taken care of as other businesses have been,” Petersburg said. “I think they just got missed in the legislation… certainly they qualify for help, but everything has to be appropriated and spent through the state.”
Disabled Americans have been hit especially hard by the COVID-19 pandemic. Adult daycare centers were quick to close in March, which makes sense given that many disabled Americans have health conditions that make them particularly susceptible to COVID.
However, while some disabled Americans do have access to government programs, others have a much more difficult time because they rely heavily on the money they make by working at organizations now closed due to the pandemic.
Since the pandemic hit, funding that normally comes in from state and federal agencies to compensate has been lost. While a majority of states have sought waivers from the federal government to keep dollars flowing during the closure, Minnesota has not.
The Minnesota Department of Health and Human Services finally allowed adult day care centers to provide services to group home residents, who make up most of their clients. Previously, only individuals who live in private homes could receive services.
Still, Cedar Valley Services’s Rich Pavek said that many of its clients will not be returning, either because their health condition obviously makes it too much of a risk or because their family or caregivers opt not to send them back.
Pavek said that Cedar Valley has a rigorous COVID preparedness plan that is designed to reduce the risk of transmission. Under state regulations, clients can only participate in in-house programming for up to three hours a day, though the limit doesn’t apply to jobs. The region’s largest service provider, Cedar Valley has roughly 250 staff members and 350 clients, with offices in Albert Lea, Austin and Owatonna. Because of its size, Cedar Valley’s opportunity to access programs intended to aid small businesses has been limited.
Meanwhile, the organization doesn’t pay into the state unemployment system, so it must pay benefits out of its own pocket. Most staff have continued to come to work in order to fulfill contracts Cedar Valley has with local businesses.
Pavek said that the organization’s reserves have left it better equipped to deal with the “rainy day” than smaller disability service providers. In addition, revenue from those existing business contracts has helped.
The region’s two other biggest disability service providers are Waseca-based Jobs Plus and Le Sueur County Developmental Services. All three programs are designed to help the disabled maximize their skills and talents.
While work forms the core of the services provided by all three local community organizations, it is just one part of a holistic approach to helping the disabled live fulfilling lives, along with socialization and community building activities.
Jobs Plus’s Katie Neegard said that she’s been in close contact with legislators on the topic. Without funding, she warned that programs providing essential services for adults with disabilities could face permanent closure.
“This is kind of like our lifeline,” she said. “If it doesn’t get approved, our programs will start closing, leaving hundreds of people without disability services.”
St. Peter legislator Brand said that the biggest roadblock may be the state’s fiscal situation. With the economy reeling from COVID-related fallout, legislators watched a $1.5 billion projected surplus turn into a $2.5 billion deficit practically overnight.
Instead of looking to state funding, Brand said the Legislature may have to use funding from its CARES Act allocation. Regardless, he insisted that the funding be a priority, arguing that saving providers now would provide immense benefit over the long term.
“As a DFLer, I feel like my job is to stand up for people who can’t stand up for themselves, and I can’t think of anyone who fits that description more than people with disabilities,” he said. “$30 million might not go that far, but without that funding, I don’t know how they’re going to make it.”
Despite the focal point of public health remaining the ongoing coronavirus pandemic, a yearlong outbreak of another debilitating disease is remaining persistent — albeit quiet — among society.
The Minnesota Department of Health declared a statewide outbreak of Hepatitis A in May 2019, and as of Friday the cases have risen to 117 in 29 counties, with 82 hospitalizations and one death.
Hepatitis means inflammation of the liver, and when the liver is inflamed or damaged its function is affected. In the United States, the most common hepatitis viruses are hepatitis A, hepatitis B, and hepatitis C. Unlike hepatitis B and C, hepatitis A is short-term, does not cause chronic liver disease and therefore is rarely fatal, but according to the World Health Organization it can cause debilitating symptoms and fulminant hepatitis — or acute liver failure — which is often fatal.
While the number of confirmed hepatitis A cases over a 14-month span may seem minute compared to the rapidly growing COVID-19 cases since only March, public health officials say that the outbreak is cause for alarm considering the infection can be easily avoided.
“Hepatitis A is not a new thing, it’s been around for quite a while,” said Marie McCarthy, a nurse with Rice County Public Health. “It should be eliminated because there is a vaccine.”
According to the Centers for Disease Control and Prevention, the first hepatitis A vaccine was licensed in 1995. Since then, millions of doses of the vaccine have been given worldwide, allowing the infectious disease to become less of a concern in developed countries.
“Because there is a vaccine and those of us living in developed countries like the United States don’t normally consume contaminated food or beverages, it’s not something that people generally think about,” said McCarthy, who explained that the virus is found in the stool and blood of people who are infected and is spread when someone ingests the virus through person-to-person contact and eating contaminated food or drink. “In undeveloped countries, the way they prepare or handle their food is quite different and less regulated than in a developed country.”
According to MDH, people who are at high risk in the current outbreak include those who use injection/non-injection drugs, people experiencing homelessness or unstable housing, people who are currently or were recently incarcerated, and men who have sex with men. While the person-to-person contact transmission is often because of the exchange of bodily fluids, McCarthy said that the other transmissions can be boiled down to the simple lack of appropriate hand washing.
“Nurses have been saying it for years: cover your cough and wash your hands,” McCarthy said.
In the region, the cases of hepatitis A have been minimal, with one confirmed case in Dodge County and two confirmed in Goodhue County. Regardless of the absence of local cases, public health officials in both Rice and Steele counties are encouraging the public to get vaccinated.
“It’s especially important for the youth since we have the vaccine that prevents this disease,” McCarthy said. “We need to complete that circle to allow people to get the vaccine that prevent these outbreaks of things we know we can prevent – just like pertussis, measles, mumps, and rubella.”
McCarthy said that because of the outbreak status that the state has two programs available for public health departments to provide the hepatitis A vaccine to both children and adults. Rice County Public Health currently has both programs, and according to Steele County Public Health Director Amy Caron adult vaccines are available in Steele County.
“With hepatitis A being in an outbreak status, we can vaccinate with an appointment pretty much anybody,” McCarthy said, adding that the public health programs are designed to help the uninsured or underinsured get the necessary immunizations and health care. “We are encouraging people to make appointments to get vaccinated, especially with school coming. One way or another, school will start again, so it’s better to make your appointments now so that we don’t have a line out the door when the state announces that school will start in two weeks.”
McCarthy also said that even though health officials are encouraging people to stay home as much as possible during the COVID-19 pandemic, individuals and families should still be taking care of their health through regular appointments.
“Even with COVID-19, the doctor’s office is safe,” McCarthy said. “Keep up with your vaccines.”