Cook County EDA Publishes Housing Needs Analysis Report

The Cook County/Grand Marais Economic Development Authority has released a report it commissioned that is titled a Comprehensive Housing Needs Analysis for Cook County Minnesota. The 75-page report is dated May 2, 2022, and was prepared by a St. Paul-based consulting firm called LOCi Consulting.

LOCi is managed by a man named Grant Martin who submitted this report. According to its website, LOCi does “market feasibility studies across the country for a wide variety of commercial real estate uses, including retail, office, residential, and mixed-use.”

The report does not present much in the way of new information from what local folks might have heard in conversations at the post office, hardware store, or coffee shop in recent years. On the other hand, it is well researched and presented in a logical fashion. It provides an analysis of demographic and economic trends to estimate future demand for housing to assist government planners looking to address housing issues.

Jason Hale, Executive Director of the Cook County Housing and Redevelopment Authority (HRA) since April of this year has been busy meeting with local folks, developers, builders, and other interested parties. He thinks this report will be useful for HRA planning and action going forward.

“Clearly everyone agrees that Cook County has a housing shortage,” Hale said. “If the private market could have solved it, it would have been solved by now.”

LOCi conducted interviews with local realtors and home building contractors and presents a fairly consistent message. Cook County has a housing problem.

The second paragraph of the Executive Summary of the report says this:

Overall, there is a shortage of housing in CookCounty across all housing types, from for-sale to rental, senior housing to special needs housing. At the time of this study, there was limited inventory of single-family homes available for sale. There were no vacant general occupancy apartment units available, and low vacancy rates in the age-restricted properties.

Among the findings in the report is that Cook is a rural county with a small and dispersed population. It is characterized by a large number of vacation properties with an economy dominated by tourism.

Asked if anything in the report surprised him, Hale said, “Just the total number of the projected demand for housing over the next five years. It’s a lot.”

The population and number of households are expected to increase at a rate that is higher than Minnesota’s increase over the next five years. The projection in this report is a population increase of 266 people and 143 households. The majority of household growth will occur in households with people aged 65 and over and there is a significant shortage of housing for this group.

The median household income (meaning half the population earns less and half earns more) in Cook County is $57,206. That number is 32% lower than Minnesota’s median income.

Although the hospitality industry is the largest employer in Cook County, the top five employers include government services, health care, and schools. Only one of the five listed is in the tourism industry. Shortages in the housing markets have driven up median sales prices significantly while increasing the difficulties of employers in attracting and retaining employees.

According to the report, half the homes in Cook County, roughly 2,900 of them, are seasonal properties, meaning they are not homesteaded by the owner.

The rental property market reports zero vacancies for general occupancy rental property. One out every four renters is paying rent that exceeds 30% of household income. Anything over 25% to 30% of income is considered unaffordable.

The median home value in Cook County, according to the US Census Bureau, is $240,100, a bit above the statewide median. On the other hand, the median sale price in Grand Marais is $370,000, an increase of 69% since 2017. LOCi reports that the number of sales has been slowing in the first four months of 2022, down almost 50% from the same period last year.

LOCi interviewed a number of realty firms and brokers for this report. A key point is found on page 38 of the report:

“Cook County is desirable for homebuyers from the area, hybrid workers, and retirees, but people often have unreasonable expectations.”

The report concludes that all of the new “for sale” homes in the county are built or were built by custom home builders on lots that the homeowner purchased and improved. There are no new home developments or spec homes, although some may be in the works.

LOCi recommends the EDA/HRA focus on so-called workforce housing over the next five years. It recommends that such housing is in the form of rental property rather than “for-sale.” It recommends one or two-bedroom apartment-style buildings along with three to four-bedroom townhouse style and twin home rentals for families. These are also recommended for low-income residents.

For senior housing, assisted living especially, LOCi recommends association-maintained communities of single-level patio and twin homes that will appeal to the 65 and over crowd.

Another recommendation is to explore zoning changes that make additional land available for housing. That may include increasing current density or opening up public lands for housing. In addition, LOCi recommends infrastructure subsidies from public funds.

Finally, LOCi recommends the public purchase of dilapidated properties and either bringing them up to current standards or removing the buildings to position the land for future development.

HRA DirectorHale has already been researching the recommendations for the report. He believes that public/private partnerships are needed to bring affordable housing for the workforce, the aging, and low-income folks and he’s been working to bring together the various interest groups.

“The solutions will take time, but we need an all-hands-on-deck approach starting now to address the housing issue,” Hale said.