Community Alert

Rose Street Apartments

Construction crews excavate soil on the site of an apartment complex on Rose Street that is expected to open next summer. A recent report cites statistics showing a shortage of affordable rental housing in Steele County. (William Morris/People’s Press)

OWATONNA — The past few years have been rough for renters living in Steele County.

Incomes have fallen while rents have increased. The supply of available rental residential units, especially for lower-income renters, has failed to keep up with demand. And many renters are paying an unsustainable percentage of their income just to keep a roof over their head.

Those conclusions and more are drawn from the 2015 County Profiles released Wednesday by the Minnesota Housing Partnership. The nonprofit organization has released annual reports going back at least to 2009 to monitor the state of affordable housing on a statewide level as well as county by county.

The numbers in the report, drawn from such sources as the state Department of Employment and Economic Development and the U.S. Census and Department of Housing and Urban Development, show that many of the 23 percent of Steele County residents who rent homes are struggling, with 49 percent of renters paying more than 30 percent of their income on housing. That’s the threshold for determining whether housing is affordable or not, and the report notes that renters paying sometimes 50 percent or more of their income on housing often have to choose between paying for rent and covering other basic needs such as food.

Nor is rental housing becoming more affordable. The data going back to 2009 show that the percentage of renters paying 30 percent or more of their incomes on housing has risen from 39 percent to 49 percent in the last seven years. And for residents on extremely low incomes, options are dwindling. While the 2013 report stated there were 51 affordable and available units per 100 low-income residents, that number has dropped to 37 per 100 in the 2015 report.

City of Owatonna Community Development Director Troy Klecker said the process of building affordable housing units is long and complex, requiring approval and funding from several agencies, making it tough to react quickly to changing market demands.

“You might have an affordable project you’re able to do every three, four, five years, and that’s not keeping up with the demand,” he said. “There’s obviously a need there, and trying to get projects to address that is part of what we work on, but there’s a higher demand than there’s the ability to create the units.”

Workers recently broke ground on the site of an apartment complex on Rose Street that will include affordable housing units, and the city in March approved a plan to build a new complex of memory care assisted living apartments on the south side of town. Klecker said the city hopes both will ease pressure on the housing market for renters.

“Any sort of housing helps with [affordable housing],” he said. “Even if you have a market-rate apartment building, people who can afford to move up there are moving up there. Even the memory care is another option for people who might be to the point where they can move into the memory care, and they might be living in an affordable unit now. … We want to see more housing construction, and that by default helps with affordable housing, as well as specifically trying to work on affordable housing projects.”

Owatonna property manager Megan Miller of Lasson Management said part of the problem can be a mismatch between what’s available in the community and what renters want.

“I guess I would say from the phone calls I get, people are definitely looking for larger units for less money, and because of the type of demand we’re seeing in the market right now, that’s not always feasible,” she said.

The city’s own studies back that up. A 2013 housing study conducted for the city by Maxfield Research Inc. noted that only three rental properties had been built since 2000, and all had significantly lower vacancy rates than older properties, suggesting there is a strong demand for newer housing with more modern amenities.

But for many low-income renters, just finding some place affordable is challenge enough. When asked what a healthy rental market would look like, Klecker said that while no city can offer every person the amenities they want at the price they can afford, having enough housing to meet the needs of residents is an important goal for city leaders.

“I would say that we would have housing that can accommodate most anybody’s needs, that everyone can find safe and adequate housing within the community at an affordable rate,” he said. ”It’s complex, and I don’t think any community ever solves it entirely, but you want to be able to, for most everybody in the community, find affordable housing in your community.”

Other details from the Minnesota Housing Partnership report:

• Renter incomes in Steele County have fallen 23 percent since 2000 after adjusting for inflation, while rents have increased 13 percent.

• Out of the top five jobs in demand in Minnesota, only two, customer service and registered nurse, make enough on average to afford a baseline two-bedroom apartment at $734 per month. Food service, retail sales, and nursing assistants fall short, as does a full-time minimum wage-earner

• Housing is especially dire for senior citizens, with 77 percent of senior-headed households in Steele County paying more than 30 percent of their income on housing.

• Fourteen percent of Steele County children were living in poverty in 2013, up from 9 percent in 2003.

• Older rental properties often require repair and can pose safety concerns for residents, and 34 percent of Steele County rental homes were built before 1960.

William Morris is a reporter for the Owatonna People’s Press. He can be reached at 444-2372; follow him on Twitter @OPPWilliam

City government and public safety reporter for the Owatonna People's Press

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