Housing shortage burdens workers, employers, state

WORTHINGTON, Minn. – Finding a job was easy. The hard part was finding a place to live.

Every workday, Biftu Jamal kisses her 4-month-old baby goodbye and boards the van that shuttles her from her home in Sioux Falls, S.D., an hour away, to work the second shift at the JBS pork processing plant here. The plant, the biggest employer in town, has 2,200 workers speaking 54 different languages and has helped make Worthington prosperous, ethnically diverse, and very, very crowded.

"I've been looking for an apartment" in Worthington, Ethiopian-born Jamal said through a translator. Her house hunt, like many others before her, ended in frustration. The only apartments available weren't the sort of place you'd want to raise a baby. So she rides the vans organized by fellow plant workers who charge $45 a week for the commute. She sets out at 12:30 p.m. and arrives in Worthington two hours before her 3:30 p.m. shift. The van won't return her to Sioux Falls until 2:30 a.m. The only time she'll see the baby she's working so hard to support is a brief glimpse in the morning, before day care.

If she could find an apartment in Worthington, she'd get back six hours a day with her child. But Worthington is one of a growing number of Minnesota communities where workforce housing is in short supply.

There are programs geared to house the homeless or help people with very low incomes find an affordable place to live. But there are fewer options for people who earn a decent paycheck and just want to live in the same town where they work. That's a challenge in a place like Worthington, where the vacancy rate has hovered around zero since 2008.

Jamal is still searching. Even a one-bedroom apartment would be fine, she said. "As long as it is suitable [for the baby], I would be happy."

The housing shortage stretches across Minnesota, where many employers kept hiring even through the recession. Now that the economy is picking up, employers are ready to expand — if their hometowns are.

The workforce housing shortage stretches from Worthington, 10 miles north of the Iowa border, to Roseau, 10 minutes south of Canada.

"Once you get here, you can't find any place to live," said Roseau Community Development Coordinator Todd Peterson. "We have good opportunities up here. We can provide jobs, if we can just provide housing."

New workers move to Roseau to work in the Polaris plant, assembling snowmobiles and ATVs. Some move away again within weeks, sick of living out of hotels and frustrated by the search for somewhere more permanent in the town of 2,600 residents and 1,600 Polaris employees.

"Our vacancy rate is effectively zero," he said. "We don't have any place to put new workers. They come to town, stay awhile, looking, and then they leave. We need to solve the dilemma."

So why doesn't a community with more jobs than homes just build more homes?

Developers could build an apartment complex in Worthington and collect $600 a month in rent for a one-bedroom apartment. Or they could build in the Twin Cities and charge twice as much. Or take their business to the Bakken oil fields, home to the highest rents in the nation — the average rent for a 700-square-foot, one-bedroom apartment in Williston, N.D., was $2,394 a month, in a 2014 survey by Apartment Guide.

Persuading builders to build in Worthington, or Roseau, or Duluth or Mankato instead hasn't been easy — or cheap. Communities and employers have begun pumping their own funds into private developments.

In Roseau, the city tapped into a state pilot program that contributed a $325,000 grant to help persuade a developer to break ground on a 30-unit apartment building that should open this spring. The city chipped in $460,000 of its own money to the project.

Their combined efforts helped knock down the developer's expense on a project that will cost $3.2 million to build, but will only be worth $2.2 million once it's finished.

Roseau had given up waiting for the housing market to take care of the problem itself. Now, Peterson said, it's time for the state to step in and help other outstate communities with their housing shortages.

Last year, the state poured a record $100 million into affordable housing for homeless and low-income Minnesotans. This year, a series of bills now churning in the Legislature focus on housing for people who earn a decent paycheck but can't find a decent place to live.

Legislation now working its way through the Senate would invest $50 million in workforce housing, create investor tax credits and establish a new state Office of Workforce Housing.

While the state debates, communities and companies are pushing ahead with their own incentive programs.

In Worthington, a $6.5 million, 48-unit townhouse complex is rising on the east side of town. The city and its institutions chipped in half the money to get the project rolling. The city put $1.6 million into the project while the Worthington Housing and Redevelopment Authority took out a $4 million loan for it.

"The economic stability of our community is in question," said Bradley Chapulis, the city's director of community and economic development.

Worthington's greatest fear, Chapulis said, is that those companies won't expand unless the city does — or at least they won't expand their businesses in Minnesota.

For workers caught in the housing crunch, the cost is measured in time away from family and money spent on long commutes.

When John Landgaard accepted the post of superintendent of Worthington School District 518, he had so much trouble finding a home to rent, he ended up couch surfing with friends while his family stayed behind in their old community. Eventually, he bought a house and his family was able to reunite. Now he watches new hires face the same struggle. Some start the day with an hourlong drive from Iowa or South Dakota.

Jason Runia, who grew up near Worthington, wanted to live and work there as well. Only one of those goals was easy.

"The few [apartments] that were available had waiting lists that were miles long," said Runia, who works at Ideas Computers. And most were low-income subsidized housing that Runia didn't qualify for, even as a recent college graduate with student loans.

At the JBS plant, Lemlem Walu shares the ride in a crowded van with her mother, Tokko Fagi. Back in Sioux Falls, Walu's husband and two children, 8 and 1, are waiting. Fagi's two youngest children are in high school. She sees them only on Sunday, her day off.

"I was thinking of my kids. I don't want to leave them," she said, waiting for the start of her shift with a yellow hard hat on her knee. Down the hall are bulletin boards where real estate agents pass along any available listings to share with the 2,200 workers at the plant. She's searched, with no luck. The family of four doesn't need much, she said. "Two bedrooms is enough for us. Any place."

Her mother is also ready to trade in the long commute from South Dakota.

"I'm tired," she said as her daughter translated. "I work here 9, 10 hours. I don't get to rest, you know? I don't sleep enough. We send the kids to school [and only see them] on the weekend. … It's too hard."