Input from housing stakeholders in the community gives strategic discussion some direction
In the best-case scenario, so many non-city officials and non-Crookston City Council members would have attended Tuesday evening's strategic discussion on the city's most urgent housing needs and what steps to take next, that it would have been necessary to move the meeting from the cramped conference room at city hall to the larger council chambers downstairs.
That didn't happen. But, City Administrator Shannon Stassen said at the conclusion of the almost two-hour session, if one more person had strolled into the conference room, he probably would have suggested moving the meeting to the chambers below.
In addition to the full council, Stassen, Mayor Dave Genereux and CHEDA Executive Director Craig Hoiseth, also in attendance Tuesday were housing developers Bob Herkenhoff and Kevin Ross, Northern Lumber and Northern Properties owner Tim Persson, Crookston School District Superintendent Chris Bates, Sherry Coauette and Melissa Perreault, both with LeBlanc Realty, and Shana Reitmeier, executive director of Northwestern Mental Health Center.
While the council members, Genereux, Stassen and Hoiseth – all of whom have discussed the community's housing needs more than any other subject in recent memory – spent the first part of Tuesday's session covering familiar ground, when they engaged the other stakeholders seated in the chairs along the wall they seemed to learn a few things about Crookston's housing climate and culture – whether it's residential and rental, single-family and multi-family, low, moderate or high-income homes – that they weren't 100 percent aware of beforehand. And it was that conversation with the various stakeholders that put some real meat in the session's last half, and at the conclusion resulted in Genereux dishing out a list of assignments, of sorts, relating to potential next steps that emerged:
• Herkenhoff, who gained tax relief in return for giving the city the lots that made Barrette Street Estates possible, and who continues to plat and sell larger lots further to the east along Eickhof Boulevard in his Nature's View Estates development, said he was open to pursuing more detailed talks with Hoiseth about possibly putting in a new street to the east of Barrette Street, where the city has already put in all of the necessary utilities and infrastructure. Along such a street, around a dozen affordable and mid-priced homes – below $200,000 – could potentially be built.
If that's the direction taken near Barrette Street, then Tuesday's discussion seemed to trend toward putting higher-end homes north and east of Crookston Sports Center, where a new street, Pirate Drive, is currently being constructed, along with utilities and infrastructure, to the north. While a major residential subdivision has been platted for the future, the construction of Pirate Drive itself will make possible the construction of around 10 homes to its north.
• Also in the area of Pirate Drive, to the north of Drafts Sports Bar & Grill, discussions between Hoiseth and a couple of developers who have shown interest in constructing an apartment complex featuring market-rate rents are sort of stagnating. While the interest remains, Hoiseth said the city might have to "sweeten the pot" to make the sorely needed apartment complex a reality. "Maybe we need to offer a better deal; maybe the deal isn't good enough yet," he said. "These people want to built a high-quality unit. We're close to getting a deal done, but what can the city do to further that along?"
Genereux told Hoiseth to look into the possibilities to push the process along.
• Ward 2 Council Member Dana Johnson, who earlier this month was the first to suggest the scheduling of a strategic housing discussion so that the housing study CHEDA paid $12,000 for earlier this year wouldn't "collect dust on a shelf," said a work group should be formed that looks at the community as a whole and makes sure that everyone is on the same page when it comes to what kind of housing is going to be pursued in what locations in town. That includes, Johnson said, "in-fill" locations throughout the community that would be less expensive to build on because the utilities are already in place and the city already owns, or is looking to own, the land. She said it could be as simple as studying a map of the entire city and identifying the highest priority in-fill opportunities.
Input from those who know
Unless it's a basic rambler with no garage that hearkens back to the HUD housing boom of many decades ago, Persson said it's essentially impossible to build a new home today for less than $140,000. But Perreault and LeBlanc both said that when homes in the so-called "affordable" price range from $100,000 to $140,000 go up for sale, they sell fast.
For young families or young professionals looking to put down some roots, Coauette said, being able to afford a home of any price is a bigger challenge now than maybe ever. "When you factor in the student debt they're faced with and having to put 20 percent down in order to secure a mortgage, the financing just gets incredibly tight," Coauette said. "It becomes impossible for a lot of people."
"People want to stay under $200,000; the $99,000 to $130,000 homes, they're snapped up pretty quick," Perreault said, adding that she had hoped someone from the banking and/or financing sector would have attended Tuesday's session.
Some of the people struggling to find a house or secure a mortgage would probably like to rent a decent place in Crookston so they can start to put down some roots while they hope to maybe buy a home somewhere down the line. But, given Crookston's median household income of barely more than $40,000, Persson said apartments with income-based rents are probably going to fill quicker than those with market-level rents, and that’s why there are more of the former available than the latter.
Either way, there's a huge hole when it comes to the number of market-based rental units in Crookston, and some of the stories council members and officials heard Tuesday about new teachers and other professionals who can't find a nice place to rent in Crookston spurred the heightened push to get a deal done on a market-based apartment complex.
"We get new people at the university and they're new to town and they're looking to buy something or at least start with a rental," Ward 3 Council Member Gary Willhite, and longtime director of residential life at UMC said. "But they can't find it here, so they go to Grand Forks. Soon, they make some new friends, their kids make friends, and they start to put some roots down...in Grand Forks."
Bates said the story is similar for new teachers in the school district.
"Marilyn (Marilyn Wahouske, the district's office coordinator) is looking for homes for three new teachers right now, and when she finds none, they will live in Grand Forks," the superintendent said. "Then, when the first teacher job opens up in Grand Forks, we run the risk of once again losing someone we may want to keep."
But, Bates added, some nice rental options would certainly help.
"Not everyone's going to buy a home right off the bat like maybe their parents did; they might not even be able to with their student debt and today's financing requirements," he said. "The younger generation is a bit scared now. They've seen family, they've seen their parents go bankrupt with property."
As city officials identify what type of housing they're going to identify and where they're going to pursue it in the community, Persson said it's important that they don't just put any type of house or apartment complex anywhere. For appraisal purposes alone and the need for a sufficient number of "comparable" homes, he said the city can't take a haphazard approach that has $300,000 homes being built right next door to 900-square foot homes with a much lower value.
"If you're going to identify subdivisions, you need to identify what's going to go in each one," Persson said. But, he added, with property availability relatively tight in Crookston, sometimes only a street or two will be able to separate homes of widely varying values.
Affordable homes are being created as well by CHEDA's first-year housing rehab program that has developers and/or contractors getting short-term, low-interest loans so they can dramatically improve homes in need of dramatic improvements. "The fixes aren't necessarily huge, but they are fixes that the buyer or the seller can't necessarily do themselves," Perreault said. "You end up with a much nicer home that's still affordable."
Meanwhile, she added, "Our phones are ringing off the hook for rentals."
Coauette seconded that. "We were on the phone all day today," she said, mentioning the new UMC baseball coach who's moving from North Carolina and trying to find a home in Crookston. "We're busting our butts but can't find anything," she said, adding that town homes are a hot commodity in Crookston. "The minute they go up for sale they're sold," Coauette said. "(Wayne) Schenck's homes go like hotcakes; they don't even have to list them. People like that lifestyle. New professionals want freedom and they don't have the time to mow or shovel. There's a lifestyle we try to fill as often as we can, but there are a lot of different, little housing niches that are needed in Crookston."
As CHEDA and/or the city continue to pursue the former Professional Building property along Seventh Street, for a $25,000 price, Herkenhoff said that would be a great place for nice twin homes or affordable homes that would likely sell sooner rather than later. "To get that for $25,000, that's nothing," he said. "You pop some nice twin homes in there, they'll sell."
As everyone agreed that talks and brainstorming between city officials and housing stakeholders will continue, Persson cautioned that the availability of money and the limits on how much various investors and developers can get out of the developments they pursue will be a constant challenge in a community like Crookston.
“The problem is, if a developer has $1 million to spend and he knows he can make twice as much in Grand Forks, it's going to take an awful lot to keep him from going to Grand Forks and spending his money here," Persson said.
Also not present Tuesday were any representatives from Crookston's major employers. Hoiseth said if the need for nice rental units is so dire, maybe some major employers would actually secure a couple of new apartments in a new unit if it was constructed, to make sure their new professionals have a place to call home.
Ward 1 Council Member Tom Jorgens liked the sound of that.
"We need to have those conversations, to engage our employers and institutions," he said. "What are their housing needs, and how can we help them meet those needs? Maybe it helps build confidence, too, because it's always about clearing that last mile, so a developer knows they're making a good decision to invest here."
What happens next?
After Tuesday’s two-hour discussion, what’s next?
1. CHEDA Executive Director Craig Hoiseth and developer Bob Herkenhoff will discuss the potential for adding a second street east of Barrette Street Estates to construct more affordable and mid-priced homes, which realtors say are a huge need. If that is the direction taken there, then it appears the initial homes that would be targeted north of the under-construction Pirate Drive would be mid-priced and higher-end homes.
2. At the suggestion of Ward 2 Council Member Dana Johnson, the formation of a work group to identify spots for housing growth in the community as a whole, including mapping “in-fill” lots around town, will be explored.
3. Hoiseth will look into potentially “sweetening the pot” in somewhat stalled talks with developers who are looking at constructing a 24 to 36-unit apartment complex near the CSC and Drafts Sports Bar & Grill that will feature market-rate rents.