Job growth and the housing supply in Dakota County are not matching up.
There is an uptick in jobs that pay around $12 or $14 an hour. Think retail, child care or certified nursing assistant positions. But the community lacks housing those workers can afford, county officials say.
Last week, Minnesota Housing approved $964,172 for two townhouse projects in Dakota County that will help fill the void. But it was just a sliver of the $162 million from a variety of sources that the housing agency awarded to 78 affordable housing projects across the state. The biggest sum Minnesota Housing has ever dished out will fund 4,000 housing units.
Suburbs across the Twin Cities received nearly 19 percent of the total.
The policies that dictate where the money goes favor projects like preservation of existing properties or supportive housing for the homeless, said Mark Ulfers, director of Dakota County’s Community Development Agency. Those issues are more common in Minneapolis and St. Paul.
“I think it’s disappointing,” Ulfers said. “The policies are what drive the funding, and the policies come from the Met Council board and the Minnesota Housing board and the Minnesota Legislature. And they favor funding priorities that are not as prevalent in the suburban area.”
Minnesota Housing also prioritizes projects that are near transit. Coordinating housing and transportation creates areas where people with a variety of incomes can live within easy access to work, school and amenities, states a Minnesota Housing document on transit-oriented development.
“It does mean that the suburbs have a lesser priority in that area than other areas that have more transit,” Ulfers said.
Kenneth Johnson, chairman of the Minnesota Housing board, pointed to an objective point system that determines which projects are funded.
“We don’t believe it’s an either/or situation. There is need both in the cities and in the suburbs,” said Johnson, a Washington County resident. “It’s a balancing act.”
In the suburbs, workforce and senior housing are major needs, Dakota County Commissioner Tom Egan said.
The demand for senior housing is becoming more critical with the number of people 65 or older expected to double between 2010 and 2030, according to the state Demographic Center. In Dakota County, seniors will outnumber youth by 2030.
None of the funding this year was specifically awarded to senior housing projects. However, many of the buildings will be home to seniors and the focus on homes that have good access to transit and are near amenities will benefit the elderly as well as people in the workforce, said Minnesota Housing spokeswoman Megan Ryan.
Minnesota Housing officials are aware of the emerging need for affordable housing for seniors and are watching the trend, Johnson said. It is complicated to gauge their actual need, he said, as seniors often have a limited income but a lot of assets.
Dakota County’s Community Development Agency received $924,440 to build the 36-unit Morgan Square Townhomes in Lakeville, which will serve families making less than $49,740 a year. Construction of Morgan Square is expected to begin in spring 2015.
The county agency got $702,155 last year for the 50-unit Lakeshore Townhomes in Eagan. Those townhouses are already under construction. Minnesota Housing awarded another $39,732 in tax credits for the project this year to supplement the cost of the project.
That is one of three recent workforce housing projects in Eagan, Egan said.
“The waiting lists in these projects are unbelievable,” he said. The lists are full before the buildings are even open, Egan said.
A three-bedroom townhouse in Dakota County costs, on average, $1,521 a month, according to the Community Development Agency. A similar home in the new buildings will be $811 a month, including utilities.
“That makes the difference for a lot of modest income workers,” Ulfers said. “They’re working hard, but the wages just don’t match up with the housing costs in our area here.”