KARLSTAD, Minn. - Polaris Industries is buying a former group home here in this Kittson County town about 45 miles away from its factory in Roseau, Minn.
The snowmobile and all-terrain-vehicle maker needed to find homes for its workers, who must cope with a tight housing market throughout Northwest Minnesota.
“Polaris is taking a real active role in alleviating the housing shortage,” said Lee Meier, executive director of the Northwest Minnesota Multi-County Housing and Redevelopment Authority, based in Mentor, Minn.
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The Karlstad building that Polaris wants to buy is a 10-bedroom home owned by the Karlstad Economic Development Authority. It’s been vacant since April, when the local group home moved into a new building in town, according to Sue Dufault, city clerk-treasurer.
The city advertised for potential buyers and wrote two major industries in the region asking if they might be interested.
“Polaris was the only one that submitted a proposal,” Dufault said. “For them, it was like an answer to their prayers.”
Under the purchase agreement, Polaris will lease the property for $10,000 a month, with an option to buy next April. Three-quarters of the lease payment will go toward the $182,000 purchase price, according to Dufault.
Including some repairs and remodeling that Polaris will contribute, the total transaction will amount to about $273,000. A recent appraisal listed the market value at about $160,000.
While the agreement is subject to a public hearing Monday, Dufault said she expects it to be a formality.
She said she wishes Karlstad, with a population of about 750, had more housing available to attract new residents. “The housing situation is terrible in Karlstad and the whole area.”
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Common problem
A Minnesota State Demographic Center housing report from 2013 indicated that several northwest Minnesota counties either had a housing shortage or will within the next six or seven years.
To alleviate the shortage by 2020, counties need to increase their housing supply by the following percentages:
- Roseau County, which includes Roseau, Warroad and Greenbush: 11.4 percent.
- Lake of the Woods County: 12.7 percent.
- Pennington County, home of Thief River Falls: 9 percent.
- Polk County, with Crookston and East Grand Forks: 6.1 percent.
- Marshall County: 5.6 percent.
- Norman County: 3 percent.
A separate study, conducted by the city of Roseau in 2012, indicated that roughly 60 percent of applicants at Polaris, in the three-month period of the study, lived outside the county.
Digi-Key, a Thief River Falls electronic-component distributor with more than 2,600 employees, indicated earlier this year that more than 1,100 of those employees commuted from other communities, including more than 100 making round-trips of longer than 120 miles.
Making strides
But cities in the region have been making progress over the past year in addressing the housing situation.
In Roseau, a 40-unit apartment complex, Tamarack Place, is under construction.
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In Thief River Falls, officials expect 84 new apartment units to be built this year. Seventy-five new apartment units were built over the previous five years.
In Crookston, the Crookston Housing and Economic Development Authority financed a $12,000 housing study earlier this year to come up with ways to deal with the housing shortage there.
Meier said apartment construction is a challenge in small- and medium-size cities in the Red River Valley.
“I think they’ve done a good job, looking at all the different avenues,” Meier said. “They’re always looking for private developers to come in and build; but to do that, there’s got to be some incentive, so they can cash flow.
“Multi-family housing is expensive. You have to find developers who believe they can get a return. They can charge larger rents and get a bigger return in bigger cities.”
The Minnesota Legislature has recognized the problem, Meier said. This year, it allocated $2 million in housing grants for Pennington and Roseau counties over the next couple of years.
In Roseau County, several businesses and local governments have created the Roseau County Affordable Housing Fund. Contributions came from Polaris and Marvin Windows & Doors, the area’s major employers; Roseau Electric Cooperative; the county and the cities of Roseau, Badger, Warroad, and Greenbush. The program provides low-interest down-payment assistance of up to $7,500 to anyone trying to buy a home in Roseau County.
The city of Roseau also has an incentive program that provides up to $2,500 in rebates and credits per home.
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“Cities and counties are trying different approaches, and it seems to be working,” Meier said. “There’s much more work to be done, but they’re making progress.”
