Want a lot? Bring $500 to city hall.
Nine went right away, the Crookston Housing and Economic Development Authority (CHEDA) snatched up another one, and Wednesday morning, a family from Fargo looking for a smaller town to call home wrote a $500 check and secured another one.
So, for those scoring at home, since the 17 "free" lots along Barrette Street in Crookston known as "Barrette Estates" were made available to the public this past Monday at 8 a.m. at city hall, 11 are spoken for, and six remain.
The lots aren't totally free. Purchasers need to put down a $500 non-refundable deposit. As long as they see the process through to completion and a home is constructed on the lot within 18 months or so, the $500 is put to good use, in the form of being applied toward the cost of a building permit.
Some people actually showed up at city hall more than an hour before the doors opened Monday morning to make sure they'd be able to secure a lot. Once the nine lots were spoken for but there didn't appear to be a rush to secure the remaining eight, CHEDA Executive Director Craig Hoiseth said CHEDA put up $500 to get one.
"We decided that if there were 17 suitors in line we would opt out of the Barrette Estates, but as it was, only nine lots were spoken for the first day, so CHEDA did pony up $500 to secure a lot," Hoiseth told the Times. CHEDA at this point is not asking for any specific lot, he continued, in order to let those who seek the remaining half-dozen to get their preferred location.
With CHEDA and the Crookston High School construction trades program in recent years partnering to build homes in nearby Evergreen Estates, which is now full, Hoiseth said the Barrette Estates lot will be the site of the home built in 2013-14 by construction trades students in collaboration with a local contractor. Securing the lot for a mere $500 means that the savings will eventually be reaped by whomever ends up buying next year's construction trades house, Hoiseth added.
New housing construction had slowed in Crookston in recent years so, with an interest in spurring more activity, Hoiseth and City Administrator Tony Chladek came up with the Crookston Workforce Housing Homestead Act, and Barrette Estates is sort of the pilot project. Hoiseth has said that he felt the "great recession" dating back to 2009 was partly responsible for the lack of new home construction because banks, in the wake of the housing bubble that burst and triggered the recession, weren't as quick to approve mortgages for people who lacked a significant amount of up-front equity. Most people couldn't afford a home lot costing $15,000 to $20,000, he said, but if they were able to secure a lot dirt cheap, that would likely serve as the equity necessary to make a lender look favorably upon a mortgage.
Enter Bob Herkenhoff. The local developer, who owns the land east of Barrette Street that he calls Nature's View Estates, basically gave the 17 lots to the city in return for a 15-year tax abatement on three nearby lots that he's going to develop on his own.
The 17 lots are pretty big, and the view to the east is a big selling point, especially considering that Herkenhoff continues to develop a man-made pond in the area. But it appears that adjacent wetlands are far enough away to potentially allow for a street to be constructed and a second row of homes to be built.
But, for the first 17 lots, the city is targeting homes to be built in the $130,000 to $180,000 range. Some of the first lots that have sold this week were bought by individuals looking to build homes for their own families, Hoiseth explained, and other lots were secured by individuals who will construct homes for resale. Either way is fine, he said, as long as the construction timeline is adhered to.
"Both of these models (building and moving in or building and reselling) were what we were hoping to achieve with the program, assisting folks with equity to acquire financing, and to increase the available workforce housing stock," Hoiseth said.