// //

The mission of the Cook County Chamber of Commerce is to be the representative voice of county for-profit and non-profit businesses in working to improve the county economy and to address pressing county socioeconomic issues.
... read more

More About EDA's Lutsen Workforce Rental Housing

02-07-2017
Regarding the proposed Lutsen rental housing project for which the EDA seeks a lower interest rate through county backed bonds: Questions have been raised about why major West End businesses should not back the bonds instead of county taxpayers, since, it is asserted, those businesses will get all the benefits. Or, some people say, the employers should just build the housing themselves. Here are some reasons why neither option is a good alternative:

1. West End employers actually have invested a great deal of money over several decades in housing for hundreds of workers – primarily seasonal employees. But they face the same brutal facts as any other housing developer: Rents on privately financed workforce housing do not generate sufficient revenue to pay for the housing, so it becomes a net expense against their bottom line. Only so much such expense is possible before it threatens their financial health.

2. Ensuring that human beings have access to safe, decent, affordable housing long has been recognized as a community interest. That’s why homebuyers have help from the VA and FHA and can deduct their mortgage interest on their income taxes – a subsidy of $70 billion annually that taxpayers provide to homeowners of all income levels.

It’s also why federal, state and local governments invest significantly in construction and rent subsidies for low-income families. As a society, we do not let people go without shelter.

“Workforce housing” is a term that attempts to define housing for those in the middle – those gainfully employed who earn too much for subsidized low-income housing but are unready or unable to buy a home and benefit from mortgage subsidies.

“Workforce housing” also includes an element of proximity to work, because the length of commute becomes another cost factor as well as an issue affecting quality of life. People in this category include young professionals starting out, lower-level managers, government workers, etc. They are people who have permanent, year-round, full-time employment.

Housing for these folks is a nationwide problem, by no means unique to Cook County or to our West End. Across Minnesota, from Warroad to Worthington and everywhere between, state, federal and local governments, foundations, non-profits and employers are teaming up to find sensible ways of meeting the need.

One consequence is that some employees are stuck in seasonal housing although they have the desire and income to move up to higher quality places designed for year-round living and more suitable for starting a family. There simply is no appropriate housing into which they can move. That frustration can lead them to give up on Cook County and move away, which is our loss.

While “workforce housing” describes shelter for people and families in a particular income range, there is no work test, and none is anticipated for the Lutsen project. If you can afford the rent, it doesn’t matter where you work. That’s as it should be. And this project is just the first of several housing projects expected in coming years. The next one, which should break ground later this year, will be in Grand Marais. Every new unit added anywhere in Cook County expands the county housing pool, to everyone’s benefit.

3. It’s not just the tax abatement bonds that make this project work financially. There also is grant funding from the IRRRB, the state and other foundations, plus an investment in the project by the non-profit which will own and manage the project, One Roof Community Housing of Duluth. Much of the funding One Roof has assembled for this project would not be available if it were owned by a private business. It’s only through the involvement of One Roof and the county that a complete financing package has been developed which makes this project financially viable.

4. Those who argue that all the benefits of workforce housing go only to employers are mistaken. The benefits flow first to those renters who gain a safe, healthy, affordable place to live, making it possible for them to take a job and settle here. If the renter has children, that helps keep our schools alive and keeps teachers and others employed. Salaries that renters earn go to pay for groceries, gas, clothing, health care, car repairs, tires, snowmobiles, ATVs,fishing tackle, hardware, lumber and everything else that keeps a family going. All of that spending supports other jobs, enabling other families to live in our communities and spend in our businesses. Without jobs, there is no community, and without employers, there are no jobs. That’s the way a community economy works. We’re all in it together.

all news
 
Website by Katherine Hellner and Sandra Schutte of Two Dogs in the Web, LLC