Dickinson County, Kansas, is looking for ways to attract more workers and grow its economy, but there is one big hurdle standing in the way.
When Natalie Muruato, chief executive officer of Driving Dickinson County, was tasked to look after the economic development in the county she discovered, the biggest obstacle is the lack of affordable housing.
“Housing affects economic development,” Muruato said. “It affects new business. It affects our existing business expansion and growth. It affects the workforce.”
Housing is closely tied to nearly every aspect of the county’s economic future, from attracting new businesses and helping existing businesses expand to building and retaining the local workforce.
Dickinson County has added new housing units and apartments in recent years, but not enough to make a significant difference, she said.
“If we really want to see growth, we need more housing,” Muruato said.
The challenge is particularly significant because Dickinson County already has relatively affordable housing compared with some surrounding counties. The problem, Muruato said, is that there simply isn’t enough of it.
“We have affordable houses,” she said. “We just don’t have enough of them.”
That shortage is affecting the county’s workforce. Muruato said many people who work for local employers, including companies such as Great Plains and Russell Stover, live outside the community and commute to work because they cannot find affordable housing locally.
And the cost of renting has risen sharply.
According to data Muruato has been examining from the Center on Rural Innovation, rent in Dickinson County has increased by 115% over the past two years.
“That was a sobering statistic for me,” she said.
The increase is a reflection of supply and demand, Muruato said. With too few available units, people looking for a place to live may have little choice but to accept higher rents.
The housing issue has now become a major focus for Driving Dickinson County and the Dickinson County Economic Development Corp.
County commissioner and DDC board chair Kenny Roelofsen, said housing is consistently one of the biggest concerns he hears from local business and community leaders.
For Roelofsen, the need is particularly focused on workers in the middle-income range, people who may not qualify for some existing low-income housing programs but still struggle to afford today’s construction and housing costs.
“We need the people,” he said. “The people are what grow the businesses.”
Muruato and Roelofsen say the county’s housing challenge isn’t necessarily a shortage of land on which to build. Communities including Abilene, Herington, Solomon and Chapman have vacant or infill lots, some with existing infrastructure.
The bigger problem is figuring out how to build housing that people can afford.
“Cost and regulations,” Roelofsen said when asked about the biggest obstacles to new housing. “Housing has gotten so expensive, and construction has gotten so expensive.”
What’s the answer?
Finding ways to make new housing affordable is the challenge. One approach Roelofsen and Muruato said they are exploring is the development of smaller “starter homes” that would provide an attainable path to homeownership without sacrificing quality.
The homes would generally range from about 700 to 1,000 square feet, similar in concept to the smaller homes in which previous generations often started their lives. She is careful not to call them tiny homes. Instead, the idea is to create a reasonably priced first home that gives buyers a foothold in the housing market and an opportunity to start building equity.
The concept could also serve more than just first-time buyers. Smaller, less expensive homes could appeal to older residents looking to downsize, potentially freeing up larger homes for families who need more space.
“It’s where you can achieve the American dream, have home ownership, and move forward,” she said.
Muruato said early results from a housing survey in Abilene indicate there is interest in the starter-home concept, although it would not be the right solution for everyone.
Officials are also looking at a less traditional option: housing cooperatives. Under the model Muruato is researching, residents would buy into a cooperative with a down payment and then make monthly payments while retaining an ownership interest and building equity.
One housing cooperative in Manhattan that Muruato has been studying has operated under the model since 1970. She said the example includes an initial payment of about $8,000, followed by monthly payments that are considerably lower than a traditional mortgage payment. Residents can make improvements to their homes and receive some of their equity when they leave the cooperative. Members also have a voice in decisions affecting the development.
The concept is still in the exploratory stages in Dickinson County, Muruato said, but she sees it as one way officials can think beyond traditional home construction.
“We’re trying to think outside the box a little bit and be very innovative and creative to provide more housing,” she said.
Neither approach solves the larger problem on its own. Construction costs, the price of materials and a shortage of skilled tradespeople continue to make new housing expensive. Roelofsen said one potential way to bring costs down would be to combine smaller floor plans with quality construction, existing infrastructure, tax incentives and Rural Housing Incentive Districts.
Another piece, Muruato said, may be finding investors willing to accept a longer-term return rather than expecting a large immediate profit from housing projects.
She calls it “patient money,” investment from people willing to look at the broader economic benefits of adding housing, including additional property and sales tax revenue and a larger workforce.
Housing assessment
Several years ago, there was a county-wide housing assessment completed.
“It was a very robust, a very great plan,” Muruato said. “But it just highlighted a couple of points from each community.”
As she visited the different communities, it became clear that each one is unique and has their own set of needs. Working off of the larger all-inclusive county needs assessment, she is now trying to break it down.
“What might work in Herington, might not work in Abilene and vice versa,” she said. “There’s different characteristics of each community and what those individual markets can bear.”