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April, 2018

By Kelly Asche, Research Associate

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Providing housing for a community or region’s population is complex and dynamic. A healthy housing market should be able to provide housing for most people and their diverse needs through a combination of natural churn and new construction.

In rural areas, however, economic and demographic forces are at work creating a housing shortage that many communities say is keeping them from attracting much-needed new workers.

But while hundreds of for-profit, non-profit, and government organizations are doing great work around Minnesota to untangle these housing issues, the housing shortage is complex and not well understood by people outside the housing field. This report looks at two major factors as to why the housing market isn’t naturally providing the housing needed in many rural communities:

It is important to note as well that not all rural areas are facing housing shortages. This issue is limited to regions where economic activity is growing and where new workers are needed to fill an aging workforce, which is a large segment of Greater Minnesota, but not everywhere. Other rural areas are facing other housing issues such as vacant housing and/or severe dilapidation of their housing stock, but these are not covered in this report.

Who needs housing?

An increasing number of job vacancies (figure 1) have employers demanding an in-migration of workers, and they are blaming the lack of appropriate housing as a significant reason for why they can’t attract more workers. At the same time, rural development organizations across Greater Minnesota are feeling the pressure to add more housing to attract these new workers and new, “younger” families.