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HOUSING IMPACT ANALYSIS

Conducted for the Greenway Area Business Association

Itasca Development Corporation/Jobs 2020 and

Itasca County Housing and Redevelopment Authority

Rebecca Cohen

May 11, 2006

The author of this paper hereby grants permission for its contents to be shared with other students in theCommunity Economic Development course at the Humphrey Institute, and other interested parties.

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Overview

Despite record-setting home sales and homeownership rates in recent years, growing

shares of low- and moderate-income workers in urban and rural areas across the country are

having difficulty finding affordable housing (Joint Center for Housing Studies 2005). Evidence

suggests that housing options are increasingly scarce for workers in a range of occupations

whose earnings exceed the upper income limits of federal housing subsidy programs but fall

short of the level needed to pay for market rate housing near job centers.1 The lack of workforce

housing adversely impacts both the welfare of those households shut out of the local housing

market, and the productivity and economic development potential of impacted areas.

Responses to this problem tend to fall into two categories. Some advocates call for the

introduction of supply-side policies that promote development of affordable housing and relax or

eliminate ordinances that stand in its way. Others suggest that employers must play a stronger

role in addressing housing demand, through direct wage increases and homeowner assistance

programs. While the feasibility of, and preferences for different strategies will vary, the need for

prompt action to address workforce housing shortages can be found in communities across the

country, as indicated in this paper by a study of Itasca County, Minnesota. This rural area stands

to face a major housing affordability crisis in the next five years, as Minnesota Steel and

Excelsior Energy each prepare to open an industrial facility in the region. While the companies

resolve permitting and financing issues, all affected parties must consider how they will address

the heightened pressure for workforce housing expected to result from the operation of these two

facilities.

1 See the Center for Housing Policys Paycheck to Paycheck 2005 findings database for comparisons of medianhousing costs and annual income for a range of occupations in 181 metropolitan areas. Accessible at: www.nhc.org/chp/p2p. For further discussion, see Haughey, R. (2001) Challenges to Developing Workforce Housing ULI LandUse Policy Forum Report, Los Angeles: ULI; US Conference of Mayors (2002) National Housing AgendaWashington, DC: Mayors National Housing Forum.

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This report focuses predominantly on the housing needs of workers filling the auxiliary

positions generated by the Minnesota Steel and Excelsior Energy projects. After a brief

description of existing conditions in and around Itasca County, the following sections assess the

expected housing demands of temporary construction workers and permanent plant employees

relocating to the area. An exploration of trends in the construction industry and the local real

estate market suggests that neither of these groups should experience difficulty finding suitable

housing close to the workplace. Those filling job openings indirectly associated with operation of

the plants, however, will face greater obstacles in securing affordable housing. This paper will

demonstrate that a mismatch exists between what these workers can afford to pay and the cost of

available units in Itasca County. The remainder of the paper presents strategies for creating

workforce housing and assesses the viability of each, concluding with recommendations for

further research.

Existing conditions

Geography

Itasca County is located in north central Minnesota, roughly eighty miles northwest of

Duluth and 200 miles north of the Twin Cities. As US Route 169 crosses the southeast corner of

the county, the highway passes through a succession of small cities and towns settled by logging

and mining interests in the late 19th century. Excelsior Energy and Minnesota Steel have chosen

two of these towns, Taconite and Nashwauk, for the sites of their proposed projects: a coal

gasification plant and steel slab production facility. Both communities lie less than 25 miles from

the city of Grand Rapids, the Itasca county seat and most populous municipality, home to nearly

8,500 residents in 2004 (see Figure 1) (MNPro 2005).

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Figure 1: Area map

Representatives from the Itasca Development Corporation and Housing and

Redevelopment Authority estimate a generous labor shed for the proposed plants, extending

approximately forty miles north and south from Nashwauk, west to the village of Cohasset near

the border of Itasca and Cass Counties, and east to Gilbert, MN, in St. Louis County (McDermott

2005; Edington 2005).2Data from the 2000 US Census confirm local willingness to endure long

commute times, indicating that over twenty percent of workers living in Itasca County travel

more than thirty minutes to work (see Appendix 1). The labor shed covers most of Itasca County,

and encompasses the southwestern-most portion of adjacent St. Louis County, including the city

of Hibbing and small towns of Chisholm, Virginia, and Gilbert. This portion represents only a

small fraction of this vast county, which is the largest county east of the Mississippi River,

covering an area of 6,860 square miles (Saint Louis County 2005).

Although the labor shed spans a sizeable area, much of the land included remains

uninhabited, covered by acres of County-, State-, National- and privately-owned forests and

boasting over 1,000 lakes. When the 2000 US Census was taken, the population of the identified

geographic area totaled 89,314, capturing the majority (88 percent) of those residing in Itasca

2 Census tracts encompassed by this area include tracts 113, 121, 122, 123, 124, 125, 126, 127, 128, 130, 131, 132,133, 134, 135, and 151 in St. Louis County, and tracts 9803, 9804, 9805, 9806, 9807, 9808, 9809, and 9810 in ItascaCounty.

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County but only one-quarter of St. Louis County residents (US Census: Summary File (SF) 3

2000). These people lived in 37,954 households, yielding an average of 2.4 individuals in each

household (ibid).

Occupancy and tenure

The Minnesota homeownership rate of 74.5 percent is one of the highest in the country,

second only to the state of West Virginia (Knowledgeplex 2005). The area of analysis has an

even higher homeownership rateaccording to the 2000 US Census, owners occupy 78.6

percent of all non-vacant housing units in the identified census tracts (US Census: SF3 2000). In

both Itasca and St. Louis Counties, single-family detached homes comprise over 70 percent of all

residential structures, a phenomenon partially explained by the limited development and capacity

of municipal wastewater treatment collection systems in unincorporated parts of either county

(Knowledgeplex 2005; Edington 2005).

Because of the regions natural beauty and recreational opportunities, many local and

non-local people also maintain summer or weekend homes in north central Minnesota. When

reporting occupancy status, the US Census designates those units used for seasonal or

recreational purposes as vacant residences; consequently, without adjustment, the vacancy rate of

the area appears extremely high (see Table 1).

Table 1: Adjusted vacancy rates in Census tracts with the highest proportions of seasonal units

Tract 9804 Tract 9803 Tract 151 Tract 9807

Total housing units 3,693 2,430 1,694 2,478Vacant housing units 2,266 775 526 612

Vacancy rate (percent) 61.4 31.9 31.1 24.7

Seasonal units 2,147 691 452 536

Adjusted vacancy rate (percent) 3.2 3.5 4.4 3.1

Source: US Census: Summary File 3 2000

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Accounting for these special uses in all Census tracts brings the overall labor shed vacancy rate

down from 16.8 percent to 5.1 percent (2,338 units), a figure only slightly higher than the

statewide vacancy rate of 3.0 percent. Roughly half of these 2,338 vacant units were available for

sale or rent at the time of the 2000 US Census. The vast majority of available rental units could

be found in and around the larger cities and towns, such as Grand Rapids, Hibbing, and Virginia,

while for-sale homes were distributed fairly evenly throughout the area (US Census: SF3 2000).

Projected conditions

Households

Projections indicate that both St. Louis and Itasca counties will experience household

growth in the next few decades, albeit at a more modest rate than most metropolitan areas and

the state of Minnesota overall. Absent the influence of new production facilities, projections

indicate that the number of households in St. Louis County will grow by 11.9 percent from 2000

to 2015, while the number of households in Itasca County is projected to grow by 18.1 percent

during the same period (Minnesota State Demographic Center (MNSDC) 2003). Itasca Countys

explosive growth in households composed of seniors living alone and other nonfamily

households explains most of the difference in 2000-2015 household growth rates between

counties.3 During this time period, these household types are projected to grow at rates that more

than double those in St. Louis County (see Appendix 2).

The identified labor shed encompasses portions of both counties, however household

projections are not available at disaggregations below the county level. An approximate

projection of household growth can be derived by applying household trends within the labor

shed between 1990 and 2000 to the subsequent decade. For example, between 1990 and 2000

3 Nonfamily households may include unmarried people living with their adult children or grandchildren, or peopleliving with brothers, sisters and other relatives (MN State Demographic Center 2003).

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modest household growth in the St. Louis County portion of the labor shed failed to keep pace

with growth in the rest of the county. As a result, the labor sheds share of all county households

shrunk by 2.2 percent (see Table 2).

Table 2: Household growth within the labor shed by county

Share of countyhouseholds within

the labor shed

Percent change--share of county

households

Total number ofhouseholds within

the labor shed

Percent change--total number of

households

St. Louis County

1990 27.4 21,686

2000 26.8 -2.2 22,153 2.2

2010 26.2 -2.2 22,640 2.2

Itasca County

1990 84.9 13,100

2000 88.7 4.8 15,801 20.62010 92.7 4.8 19,056 20.6

Source: MNSDC 2000 and author's calculations

Conversely, between 1990 and 2000, the number of households in the Itasca County portion of

the labor shed grew by over 20 percent, increasing the labor sheds share of county households.

Assuming these trends continue into the next decade, the total number of households within the

labor shed in 2010 will reach 41,696an increase of nearly 10 percent, or 3,742 households.

In the absence of projections at the census tract level, similar methods can be used to

project labor shed population in 2010 (see Table 3).

Table 3: Labor shed projected population

Labor shed population Percent change

1990 86,513

2000 89,314 3.2

2010 92,172 3.2

Source: US Census 1990, 2000, SF:3 and author s calculations

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A projected population of 92,172 yields an average of 2.2 people per householda decline of 0.2

from 2000. Not surprisingly, in both Itasca and St. Louis Counties projections show households

composed of individuals living alone growing faster than any other household type (MNSDC

2003).

The proposed Minnesota Steel and Excelsior Energy projects will have an important

impact on labor shed population and household growth patterns. The projected job creation

directly and indirectly stimulated by operation of these facilities will induce migration into the

labor shed, as temporary and permanent workers from around the region take advantage of new

employment opportunities (see Table 4).

Table 4: Projected labor shed job creation

Temporary construction jobs Permanent full-time jobs Ancillary jobs

Minnesota Steel 2,000 700 2,100

Excelsior Energy 1,000 150 290

TOTAL 3,000 850 2,390

Source: Minnesota Steel 2005; Micheletti 2005; University of Minnesota-Duluth 2005

The next section addresses the housing impact brought about by construction of these facilities.

Temporary housing needs

While currently engaged in the environmental scoping and review process, officials from

both Minnesota Steel and Excelsior Energy expect construction to begin in 2007, assuming

permitting and financing procedures progress as scheduled (Minnesota Steel 2005; Micheletti

2005). Minnesota Steels shorter construction timeline indicates that production will begin two

years later, while Excelsior Energys Mesaba One plant will be fully operational in 2011 (ibid).

During these four years, the combined 3,000 member construction workforce will be drawn from

both local and non-local firms. Non-local workers will likely move on following completion of

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their assignments, but temporary accommodations must be provided during the construction

period. At present, neither Minnesota Steel nor Excelsior Energy has identified a general

contractor, making it difficult to predict the geographic areas from which employees will be

drawn. Although representatives from both companies express the desire to hire locally, a sizable

share of workers will likely come from Duluth, the Twin Cities, and other areas beyond the labor

shed (Edington 2005).

The following section draws from interviews with Twin Cities contractors who often

work on large industrial projects and presents typical strategies for meeting the housing needs of

non-local workers.

4

The robust tourism industry and lack of rental units in the study area present

obstacles to some standard approaches to this problem, but other viable alternatives indicate that

construction workers will have suitable housing. An exploration of conditions in the city of

Gillette, Wyoming, provides an additional perspective on strategies to accommodate a large

temporary workforce. Although more populous than Grand Rapids, Gillette faces similar housing

pressures and some of the same constraints. City officials have offered some creative responses

worthy of consideration.

Housing strategies

As identified by the staff of construction firms in Minneapolis and St. Paul, potential

courses of action for housing temporary workers include:

Secure all available hotel rooms in the area for employee use;

Purchase apartment buildings, or rent local apartments for construction workers; or

Construct an inexpensive compound with minimal infrastructure for temporary use

during construction.

All three options were identified by all interviewees as fairly standard choices that have worked

4 Phone interviews were conducted with staff at Ryan construction, Adolfson and Peterson Construction, and KrausAnderson Companies in Minneapolis, as well as Hunt Electric Corporation in St. Paul.

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in other communities. The unique characteristics of the Grand Rapids area, however, require

closer examination of the feasibility of each.

The first option, reserving hotel rooms within the commuter shed for an extended period

of time, would likely meet with opposition from local proprietors, as Itasca and St. Louis

Counties are both year-round tourist destinations. An estimated 1,500 hotel rooms can be found

within the study area, although demand for these rooms persists in all seasons as visitors take

advantage of the recreational opportunities the area has to offer (Visit Grand Rapids 2005).

Skiers, snowmobilers and other devotees of winter sports come for the Olympic-caliber Ole

Mangseth Memorial Ski Jump in Coleraine and more than 1,000 miles of snowmobile trails in

Itasca County. In warmer months, the lakes and natural beauty bring in visitors from all over the

region, while hunters are drawn to the area throughout the year. Setting aside a large proportion

of hotel rooms over a four-year period in order to accommodate a share of the 3,000 construction

workers could seriously damage the local recreation and tourism industry, causing visitors to

seek out alternative destinations in the future (Edington 2005).

Representatives from the construction industry also suggest apartment rental as a means

to provide temporary housing to employees. As of the 2000 Census, 718 units were available for

rent within the identified labor shed (US Census: SF3 2000). More recent analyses of housing in

Itasca County, however, indicate that the local rental market may have tightened. A 2003 study of

Grand Rapids found a vacancy rate of only 1.0 percent for market rate general occupancy units

(Bujold and Sjogren 2003). As a result, the viability of accommodating construction workers in

existing rental housing units may also prove difficult. Accordingly, a temporary housing

compound, sometimes referred to as a base camp, may present the best option for temporary

worker housing.

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Gillette, Wyoming

Exploration of strategies under consideration in Gillette, Wyoming, a community facing

similar temporary housing pressures, may prove instructive. Gillette, a town of approximately

19,000 in northeast Wyomings Campbell County, lies between the Black Hills of South Dakota

and the Big Horn Mountains. Known for its easily accessible reserves of coal and natural gas,

boomtowns in Campbell County have grown and dwindled as the nations energy needs have

evolved. At present, approximately thirty percent of all US coal comes from Campbell County,

and opportunities in the mining and utilities industries continue to grow (Schroeder 2006). With

minimal rental units and hotel vacancy rates of approximately one percent, the city faces

challenges similar to Grand Rapids, with three new power plants set to come on line in and

around Gillette in the next five years (ibid).

At present, the Wygen II power plant is garnering the most attention from the press and

local officials. At its peak, plant construction will require a workforce of 400, most of whom are

expected to come from out of the area (Concerns raised 2005). The director of the Gillette

community development authority (CDA) has raised concerns about the existing housing

markets ability to accommodate this influx of people (Power plant 2005). With limited hotel

rooms and rental options, local authorities have identified some creative solutions for addressing

temporary housing needs.

At present, the CDA is revising an ordinance that would increase the land available to

temporary residents by allowing construction housing in areas zoned exclusively for industrial

and commercial uses. The pending ordinance permits up to ten recreational vehicles (RVs) in

each industrial or commercial district, all of which must be connected to the city water system

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(Mcrae 2006). According to the ordinance, the RVs may only be occupied by workers linked to

ongoing construction, with project developers liable for financing and infrastructure costs.

Another strategy being pursued in Gillette involves working in cooperation with a local

community college to develop temporary housing options (Schroder 2006). In partnership with

the college, developers would finance the construction and operation of a new dormitory

reserved for temporary workers during plant construction. At project completion, the community

college would assume control of, and financial responsibility for the dorm, which would then be

opened up to students. While neither of these approaches has been implemented yet, they present

new ways of thinking about increasing housing options for construction workers.

The state of Wyoming has also convened an industrial siting council, responsible for

impact review and permit issuance for new industrial developments costing more than $155

million. This bi-partisan council is similar to Minnesotas Environmental Quality Board (EQB),

although whereas the EQB focuses primarily on environmental impacts, the industrial siting

council prioritizes socio-economic outcomes such as the drain on public services, schools, and

housing caused by new facilities and their employees (Industrial Siting 2005). Developers must

address all undesirable impacts, or identify strategies for doing so, before building permits will

be issued. The council came into existence in 1975 as a result of concerns about adequate

housing supply at a time when many temporary workers stayed in their cars or set up camp sites

during construction (Schroeder 2006). To receive permits, developers may be ordered to

establish base camps for their workers or pay for hotel rooms when available (ibid).

While implementing any of these strategies in Grand Rapids would require adjustment to

suit local conditions, experiences in Gillette suggest that the community would be wise to

consider ways of expanding its temporary housing capacity. According to Tom Schroeder,

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principal of the Industrial Siting Council, economic development in Gillette has suffered as a

result of inadequate housing opportunities. Schroeder suggests that companies seeking to locate

in the resource-rich area have run into problems finding both temporary and permanent workers

due to the scarcity of local housing options, a sentiment echoed by staff at the CDA.

Plant employee housing needs

Permanent housing will also need to be supplied for those workers who relocate to the

Grand Rapids area as the Minnesota Steel and Excelsior Energy plants become fully operational.

Representatives from Minnesota Steel estimate an average annual salary of $70,000, including

benefits, for all workers at the plantroughly $52,500 in annual cash salary (Elmore 2005). In

the absence of specific information from Excelsior Energy representatives, similar average salary

estimates are applied to the Mesaba One facility, which will require a skilled workforce for

nearly all positions. Analysis of the housing demand directly generated by these facilities and

current activity in real estate and homebuilding suggests that new permanent employees will not

have difficulty finding affordable housing in the labor shed.

Local workforce capacity

When running at peak capacity, the facilities will require a combined total of

approximately 850 full-time employees. These employees will be drawn from both local and

non-local skilled labor pools. Assuming prospective employees who currently reside within the

labor shed are adequately housed, the proportion of workers expected to relocate from out of the

area will indicate the number of housing units needed to meet the anticipated demand. An

assessment of the local workforce capacity provides greater insight into the share of new

positions that can reasonably be filled by individuals currently living in the labor shed.

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The 2000 US Census indicates that the overall study area had a weighted unemployment

rate of 6.1 percent in that year (US Census: SF 3 2000). Itasca County unemployment peaked at

8.0 percent in 2003, coinciding with lay-offs at the Blandin Paper mill, although the area has

since experienced a recovery. The average unemployment rate in Itasca County reached 5.8

percent in 2005, the lowest annual average in over 15 years, with the exception of 2000. St.

Louis County maintained a fairly steady average unemployment rate of 4.7 percent (Minnesota

Department of Employment and Economic Development (MN DEED) 2005). These trends

coincide with modest population growth in both counties (see Table 5).

Table 5: Trends in unemployment rate and population

Average unemployment rate (%)* Population

2000 2005 Change 2000 2005 Change

Itasca County 5.7 5.8 0.1 43,992 45,770 4.0

St. Louis County 4.3 4.9 0.6 200,528 202,850 1.2

Minnesota 3.2 4.0 0.8 4,919,479 5,197,200 5.6

*Average unemployment rate is not seasonally adjusted

Source: MN DEED 2005; MNSDC 2003

Unemployment figures for Itasca and St. Louis counties are higher than the state average,

although by a smaller degree than in previous years. Local figures are also slightly higher than

the national average unemployment rate of 4.6 percent (ibid).

The relatively low unemployment rates in the labor shed area should not be taken as an

indication that local competition for new positions at Minnesota Steel and Excelsior Energy will

be scarce. As suggested by Peter McDermott, president of Itasca Development Corporation,

local people want to stay in the area (McDermott 2005). When opportunities requiring skilled

labor and paying higher wages become scarce, a sizable proportion of the workforce may accept

jobs for which they are over-qualified, taking advantage of limited employment opportunities in

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order to remain in the Grand Rapids region. While unemployment statistics would not capture

these individuals, they will most likely be inclined to fill the more desirable positions that

become available once the new facilities begin hiring.

Local residents also suggest that members of the workforce have extended the distance

they will commute in order to secure gainful employment, with some residents traveling as far as

eighty miles east to Duluth on a daily basis (Christianson 2005). In 2000, nearly ten percent of

all workers over 16 living in the labor shed faced an average travel time to work of more than

forty minutes (US Census: SF 3 2000). In rural areas, this long commute time probably indicates

distance traveled, rather than time spent in traffic congestion. Where skill levels match, these

employees would likely try to secure work at one of the nearby industrial facilities, rather than

continuing to commute long distances for similar jobs.

At present, McDermott suggests that skill levels in the community would allow local

residents to fill approximately 25 percent of new jobs created by these projects. Neither plant,

however, is expected to begin operating until 2009. This gap during construction presents the

opportunity for at least three years of workforce development and training. Efforts are already

underway to inform high school and college students about potential job opportunities and the

skills needed to qualify for these positions; Vermillion Community College in Ely has been

developing programs to help train people to take advantage of these upcoming jobs (Strauss

2005). The Minnesota Workforce Center in Grand Rapids and other regional community colleges

can also be expected to tailor programs to anticipated employment opportunities, allowing

McDermott to estimate that by the time company executives begin hiring, members of the local

workforce will be qualified to fill between fifty and 75 percent of the permanent positions

(McDermott 2005).

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Homeownership opportunities

With a conservative approximation that the local workforce will qualify for half of the

new positions, 425 jobs will need to be filled by individuals relocating to the labor shed area.

Roughly twenty percent of current labor shed residents rent, rather than own their homes;

however, this study assumes all new employees will be seeking homeownership opportunities. A

housing impact analysis conducted for the Grand Rapids area indicates that rental units tend to

be occupied by seniors or low-income householdsindividuals and families seeking lower

maintenance responsibilities or living on a limited budgetwhile new employees will have

relatively high earnings (Bujold and Sjogren 2003). Moreover, local residents report that a

stigma may be associated with renting in northern Minnesota, where homeownership is much

more common (Nelson 2005). As such, this analysis continues under the assumption that all 425

new employees will be looking to buy or build somewhere to live.

At present, the Range Association and Itasca County Boards of Realtors list nearly 1,000

single-family and manufactured homes for sale in the labor shed, the vast majority of which are

located in Itasca County (Scherf 2006; National Association of Realtors 2006).5 The price of

single-family detached homes in the city of Grand Rapids averages around $150,000, with prices

closer to $120,000 for Itasca County homes on lots smaller than three acres outside the city.

Outlying homes on lots larger than three acres cost an average of $185,500, with prices doubling

on the lakeshore (Scherf 2005). Prices in St. Louis County are similar, with most homes listed

between $75,000 and $200,000. Typically, homes remain on the market for 90 days, and the

number of listings has increased by nearly 20 percent over the past four months (Scherf 2006).6

5 The Range Association of Realtors covers a geographic range that extends well beyond the labor shed, soindividual listings were aggregated for the following areas: Buhl, Chisholm, Eveleth, Gilbert, Hibbing, Keewatin,Mountain Iron, Nashwauk, Parkville, Pengilly, Side Lake and Virginia.6 Caution must be taken in interpreting these listings, as homes for sale by owner or through other means are notaccounted for in Realtors figures.

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The Minnesota Builders Association is also active in the region, with over 700 members

in Northern Minnesota300 of which are based in Itasca and St. Louis counties (Christianson

2005). Megan Christianson, executive officer of the Northern Minnesota Builders Association

(NMBA), reports that more and more, new construction in the area tends to be customized to the

end users preferences, with development generally costing at least $200,000 (ibid). Christianson

notes that as overall labor and material costs have continued to rise, homebuyers have become

increasingly dissatisfied with spec houses built before a commission has been issued. Buyers will

pay a premium price for a structure that meets their specific needs, rather than living in a cookie

cutter house (ibid).

As suggested by the custom-built nature of most new homes, members of the NMBA

typically build only one or two new single-family homes each year, focusing primarily on

remodeling and light commercial work. Multiple sources suggest these builders would be

unwilling and unable to develop a large-scale project, at least in the short-range timeframe before

the factories open (Edington 2005; McDermott 2005; Christianson 2005). With a maximum of

425 new homebuyers from out of the area, however, the combined capacity of the real estate

market and local builders should be able to reasonably accommodate this demand.

Housing market affordabilitypermanent employees

In general, owner-occupied housing is considered affordable if a household spends no

more than 2.5 to 3 times its annual income on the purchase (Bujold and Sjogren 2003). With an

annual cash salary of $52,500, a new factory employee would be able to afford a house costing

between $131,250 and $157,500. Although construction of a detached custom-built home would

be less feasible for a single wage earner family, if home prices remain stable new employee

households should be able to find affordable housing in the labor shed without difficulty.

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In nearly half of the married-couple families within the labor shed, however, both spouses

participate in the workforce (see Table 6).

Table 6: Share of families in labor shed with two wage earners

Total, all census

tractsWife in labor

forceShare of dual wage earner

families (%)

Married couple families 20,170 52

Husband in labor force 13,673 10,500 77

Employed or in Armed Forces 13,163 10,139

Unemployed 510 361

Source: US Census: SF 3 2000

When considering only those families in which the husband is in the labor force, the share of

dual wage earners rises to over three-quarters of all families. Even if a new employees spouse

earned minimum wage, the amount the family would be able to spend on a new house would

increase accordingly. For example, with a second income of $20,000, a family could afford to

spend up to $217,500 on a new home. Given the level of vacancies and relative affordability of

the local real estate market, and the preference for custom-built homes and capacity of the

NMBA, development of new homes for permanent employees of Minnesota Steel and Excelsior

Energy need not be a top concern of local authorities.

Auxiliary employee housing needs

The expansion of the regional economic base will inevitably create a multiplier effect,

stimulating demand for additional goods and services to support the new households and

enterprises and generating jobs to meet this demand. Many of the local workers offered

employment in the new facilities will leave behind lower-wage positions for which they had been

over-qualified; these openings will need to be filled as well. Under the assumption that industry

growth will reflect the present structure of the local economy, the following section explores the

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local employment composition to determine the industries in which job growth will be greatest.

Subsequently, an assessment of the local housing markets ability to absorb these workers will

reveal a shortage of affordable options for those relocating to the area to fill positions in

supporting industries.

Local employment structure

The following classification of the local employment structure provides an initial

framework with which to explore the projected industrial distribution of new auxiliary jobs and

their associated wage rates. Although employment and wage details are not available at

disaggregations below the county level, Itasca County figures serve as a proxy for the entire

study area (see Table 7).7

Table 7: Itasca County 2004 employment structure and average weekly wage

Percent oftotal

employment

Weeklywage(2003)

Adjustedweekly wage(1/06 dollars)

Estimated annualearnings, full-time

employees

Leisure & Hospitality 10 $184 $198 $9,915

Retail Trade 15 381 411 20,531Other Services 5 383 413 20,638

Professional & Business Services 7 414 446 22,309

FIRE* 3 463 499 24,949

Trade, Transportation & Utilities 5** 518 558 27,913

Information 1 523 564 28,182

Education & Health Services 25 554 597 29,853

Wholesale Trade 3 581 626 31,308

Construction 5 640 690 34,487

Public Administration 7 655 706 35,295

Natural Resources & Mining 3 889 958 47,905

Manufacturing 9 1,000 1,078 53,886

*Finance, Insurance and Real Estate

**Wholesale and Retail Trade are part of the Trade, Transportation & Utilities (TTU) industry; the percent of total

employment in TTU was listed at 23% in the original source, but has been reduced to 5% in this table to eliminate overlap.

Source: Northland Connection 2005; author's calculations

7 St. Louis County covers a massive area and includes the metropolitan area of Duluth. Conditions in the St. LouisCounty portion of the study area are likely to be more similar to Itasca County than to St. Louis County as a whole.

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At present wage levels, forty percent of Itasca County employees earn less than $500 a week if

working full-time, or under $25,000 annually. An additional thirty percent of employees earn

below $30,000 each year. Conditions in the county are similar to the region as a whole; roughly

forty percent of jobs in the Arrowhead pay less than $10 an hour (Strauss 2005)8.

Researchers at the University of MinnesotaDuluths Labovitz School of Business and

Economics used IMPLAN software to evaluate the economic impact of Excelsior Energys coal

gasification plant. Their study estimated that 290 full- and part-time auxiliary positions will be

created in the region as a result of plant operations (see Table 8).

Table 8: Auxiliary job creation

Direct employmentProjected full- and part-timeauxiliary jobs in the region

Excelsior Energy 150 290Minnesota Steel 700 2,100Total 850 2,390

Source: University of Minnesota-Duluth 2005; Minnesota Steel 2005

Although offering no evidence to support their figures, representatives of Minnesota Steel cite a

larger multiplier for new jobs spurred by the steel slab manufacturing facility; promotional

materials project 2,100 newly created jobs in other industries. In addition, currently

underemployed local residents can be expected to leave their positions to pursue better-paying

opportunities when the new facilities begin hiring. McDermott estimated that the local workforce

will be able to fill between 50 and 75 percent of the 850 new positions. If 425 workers vacate

their current jobs, a combined total of 2,815 new openings will be available in the region.9

8 The Arrowhead region, in northeast Minnesota, encompasses Aitkin, Carlton, Cook, Itasca, Koochiching, Lake andSt. Louis counties.9 This analysis intentionally uses the low end of McDermotts estimate of permanent employees coming from thestudy area to avoid artificially inflating the number of newly created positions by including high-school and full-time college students in estimates of local employees leaving their current positions to work at the new plants.

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Housing market affordabilityauxiliary employees

At present, communities in the study area are ill-prepared to accommodate those

members of the auxiliary workforce earning wages too low to afford the average home sales

price. Analysis of questionnaires completed by local employers for a 2003 study of housing

needs in Grand Rapids and greater Itasca County indicated that housing concerns are

prevalentmany employers perceive that housing prices in Grand Rapids are high and that

moderate-income employees cannot afford existing housing (Bujold and Sjogren 2003, p. 21).

The same report found a very limited number of general occupancy apartments, and noted a

vacancy rate of only 1.0 percent for market-rate units (ibid, p. 35).

10

A desirable vacancy rate

falls closer to five percent, allowing renters sufficient choice and discouraging rent inflation.

Finding available subsidized and affordable units presents a greater challenge, with no

vacancies reported by building managers, and long waiting lists at most subsidized projects in

the area (ibid, p.v).

The creation of an estimated 2,815 new positions, combined with a projected ten percent

growth in households over the next ten years, will undoubtedly exacerbate the already tight

affordable housing market. As noted, lending conventions suggest that homebuyers can afford to

spend between 2.5 and 3 times their annual income on the purchase of a house (ibid). The

Department of Housing and Urban Development (HUD) has set rental affordability standards at

thirty percent of household income. According to these criteria, a household with an annual

income of $25,000 can afford to spend $7,500 each year ($625 per month) on rental housing, or

buy a $75,000 house.

10 The geographic area covered by the Maxfield Research study differs somewhat from the area in the labor shed.For the purposes of this study, however, general trends in the rental market as identified by the Maxfield study areassumed to apply to the larger labor shed area.

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When compared with the expected income of single-wage earner households employed in

many of the new ancillary positions, application of these standards indicates cause for concern.

At projected wage rates, 45 percent (1,273) of employees without another wage-earner in their

household will not be able to afford monthly rent payments of more than $700 (see Table 8).

Moreover, nearly three-quarters of these employees will be unable to afford a $100,000 house.

Table 8: Housing affordability at projected wage rates

Percent oftotal

employment

Adjustedweekly wage(1/06 dollars)

Affordablemonthly

rent

Affordablehomeprice

Leisure & Hospitality 10 $198 248 29,745

Retail Trade 15 411 513 61,592Other Services 5 413 516 61,915Professional & Business Services 7 446 558 66,926FIRE* 3 499 624 74,847Trade, Transportation & Utilities 5** 558 698 83,739Information 1 564 705 84,547Education & Health Services 25 597 746 89,558Wholesale Trade 3 626 783 93,923

Construction 5 690 862 103,461Public Administration 7 706 882 105,886Natural Resources & Mining 3 958 1,198 143,714Manufacturing 9 1,078 1,347 161,658

Source: Northland Connection 2005; author's calculations

Even in a dual wage earner household, those employed in the Leisure & Hospitality sector would

not be able to afford average area home prices. Employees in this industry fill ten percent of total

area jobs, or roughly 280 of the new ancillary jobs.

When compared with monthly rent averages in Itasca County, wages in all ancillary

positions are more appropriately scaled to the cost of rental housing in the area. Based on

prevailing rental rates, most dual-earner households could easily afford monthly payments at

apartments of all sizes; small single-earner households could be accommodated as well (see

Table 9).

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Table 9: Monthly rent averages, Itasca County*

2003 Rent averages 2005 Constant dollars

0-bedroom $310 331

1-bedroom 533 569

2-bedroom 568 606

3-bedroom 780 833

*Due to data limitations, it was not possible to calculate rent averages for the entire study area.

Source: Bujold and Sjogren 2003; author's calculations

It is essential to recognize, however, that mounting pressure on the leasing market can cause rent

levels to escalate. More importantly, there are virtually no vacancies in the local rental housing

market and an extremely limited number of rental units overall.

Without any increase in the rental and starter-home housing stock, families relocating to

the study area will be vulnerable to the deleterious side effects of an extremely tight housing

market. As households scramble to find housing near their place of employment, some will

purchase lower-cost houses, which tend to be older and may be in disrepair. High demand is

likely to drive up the cost of even substandard units, further worsening the shortage of options

available to low- and moderate-income earners. As in Gillette, the inadequacy of the housing

stock could also seriously undermine the growth potential of the study region and constrain

economic development.

Demand for workforce housing

Given the recognized demand for rental units and lower-cost homes in the study area, it

may appear surprising that few developers have moved in to take advantage of this market. At

issue is the fact that development and construction of units within the means of a low- and

moderate-income workforce simply does not yield the revenue developers need to make a profit.

Without subsidies or other cost-saving incentives of any sort, total costs of production exceed the

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value of the house or income received from apartment rental (Nelson 2005). As indicated by

local building trends, housing development is typically most feasible on the upper and lower

margins, where the market, or government subsidy, can support construction costs. For those

families who earn too much to qualify for housing assistance, but do not make enough to buy

market-rate homes, options are limited.

This problem is not unique to the Grand Rapids area, nor is it new. Nationally, rental

housing opportunities for very low and high-income households increased from 1985 to 1999, at

the same time that the number of rental units affordable to low and moderate-income households

declined (Haughey 2002, p.3). Housing advocates have increasingly recognized shortages of

workforce housing, defined by the Urban Land Institute as affordable to those earning between

60 and 120 percent of area median income (AMI) (ibid, p.4). At these levels, households do not

qualify for most federal housing subsidies, but are typically unable to afford market rate housing.

The 2005 AMIs for Itasca and St. Louis counties were $51,450 and $54,850 respectively, placing

most of the auxiliary workers towards the low end of this range (National Low Income Housing

Coalition 2005). If local home sale prices continue to outpace income levels, this shortage will

only grow worse (see Table 10).

Table 10: Itasca County income and home sale price increases, 2001-2005

Median family

incomePercentincrease

Median home saleprice

Percentincrease

2001 $41,800 $78,9002002 41,800 0 82,000 4

2003 49,800 19 99,500 212004 49,800 0 105,000 6

2005* 51,450 3 112,000 7

2001-2005 23 42

*2005 sales data are for January through July only

Source: Itasca Economic Development Council 2005

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Strategies for workforce housing development

As recognition of the shortage of affordable workforce housing has grown, a variety of

innovative strategies to address this problem have been developed. The following section

presents some of these approaches, first concentrating on supply side strategies, or those that

contribute to an increased supply of workforce housing. Subsequently, those tactics that address

demand and consumer purchasing power are presented.

Supply-side strategies

Proponents of supply-side strategies suggest that measures must be taken to increase the

stock of housing affordable to low- and moderate-income households. Supply-side strategies

may include the establishment of tax-increment financing districts that induce developers to

build on a particular site, or direct government involvement in housing construction. This section

presents three strategiescommercial linkage fees, inclusionary zoning, and manufactured

housingthat do require government involvement, but no allocation of public money. Instead,

affordable housing options are expanded through developer fees and non-monetary incentives.

Commercial linkage fees

Municipalities impose commercial linkage fees on developers of new commercial

enterprises as an indirect means of ensuring that affordable housing will be available to

prospective employees. These one-time fees, also known as housing impact fees, are typically

assessed on the basis of square-footage and only levied on developers of projects that surpass a

pre-determined size threshold, to avoid penalizing small businesses with limited earnings

(Hendrickson 2005). Fees may vary depending on the nature of the structure (ie whether it is a

warehouse, hotel, or office) but generally do not exceed $1 per square foot (ibid).

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Proceeds are deposited into a fund to be used for affordable housing initiatives.

Communities have considerable flexibility in setting requirements for award eligibility; qualified

uses may include the creation, preservation or maintenance of workforce housing in close

proximity to the workplace, or establishment of an employee housing fix-up fund. Although

revenue from commercial linkage fees may be modest in small towns, proceeds can be used to

lower housing construction costs and accordingly the price of new residential units. The fees

present a means of developing affordable housing or improving housing stock without raising

taxes, increasing public debt or transferring funds from other programs.

As businesses in the service and retail industries relocate to the Grand Rapids area in

response to increased economic activity, the revenue received would grow, helping to ensure that

lower-wage employees have housing options. An argument could be made that imposing a fee on

new commercial construction could deter businesses from coming to the area, or cause them to

locate just outside of fee boundaries; regional cooperation would be needed to mitigate these

potential negative effects. As demonstrated in Gillette, WY, economic development suffers when

the workforce cannot live in close proximity to employers. Commercial linkage fees help to

address this spatial mismatch.

Inclusionary zoning

Inclusionary zoning can be used as a tool to encourage developers to include a pre-

determined share of affordable units in any new market-rate residential development.11

Participants are rewarded with an array of incentives such as density bonuses, expedited

permitting and reduced parking requirements, all of which help reduce development costs

(Hendrickson 2005). In order to qualify for these incentives, a specified share of all project units

11 In some municipalities, developers may donate land or make a cash payment in lieu of development.

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must remain affordable to households at or below a certain income level for a specified period of

time. For example, in Montgomery County, Maryland, 15 percent of all units in any multi-family

development with more than 35 units must be set aside for households earning at or below 65

percent of area median income for a period of twenty years (Brown 2001). Specific eligibility

and time standards, however, are at the municipalitys discretion. To address workforce housing

shortages, priority for affordable units may be given to people employed in the city or county.

While this policy can apply to rental or homeowner development, the relative

affordability of rental units in the study area may undermine its initial impact in the Grand

Rapids area. Moreover, inclusionary zoning typically only applies to projects where the number

of new units exceeds a certain size threshold. While zoning administrators may set this threshold

at whatever level they wish, the minimal level of subdivision development in the Grand Rapids

area could mean that inclusionary zoning standards will be applicable in a very limited number

of projects. Nevertheless, projected regional growth could change this dynamic. In 2002, the city

of Grand Rapids began implementation of an eight year scheme for the orderly annexation of

adjacent unincorporated land. Christianson estimates that 300 homes could fit amply on recently

annexed land, indicating that the potential for larger-scale residential development exists.

Additionally, as housing pressure mounts, the cost of rental units could rise as well. Inclusionary

zoning would ensure that a portion of units remain affordable, even in the face of rising rents.

Because there is no financial expenditure associated with this strategy, implementation

does not require any monetary contribution from local jurisdictions. Likewise, payment received

from the market-rate units subsidizes the reduced rent or purchase price of the affordable units,

which may also be smaller or include fewer amenities thereby further lowering development

costs. Should subdivision or multi-family development in the Grand Rapids area increase,

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inclusionary zoning would insure a portion of new units would be affordable to low- and middle-

income households. In addition, as the senior population continues to age, supportive housing

developments will be forced to include units affordable to seniors on a fixed income.

Manufactured home zoning allowances

Manufactured homes present an increasingly popular affordable housing alternative,

representing ten percent of all US single-family housing starts in 2004 (Manufactured Housing

Institute (MHI) 2006). The 2003 average sales price was $54,900, or $59,290 in 2006 dollars, a

cost savings of approximately half the average home sales price in the study area (ibid). A recent

study conducted for HUD by researchers at Abt Associates found that when combined with land

ownership, investment in manufactured housing generally provides a positive return to owners

(Boehm & Schlottman 2004). Moreover, owners of manufactured homes report higher average

neighborhood and housing quality satisfaction than residents of rental units (ibid). Additionally,

these homes can be built and installed relatively quickly and at reduced construction financing

costs, facilitating prompt expansion of housing options for low- and moderate-income

households (Haughey 2002).

Formerly referred to as mobile homes, today a majority of manufactured homes are never

moved once they are installed (MHI 2006). In fact, double-section homes may be virtually

indistinguishable from stick-built homes, particularly in neighborhoods with ranch-style or

modest housing stock (Beamish et al 2001). Nevertheless, in some communities a negative

perception of manufactured housing persists, and oftentimes regulations and ordinances

complicate the siting of these units. As of 2000, mobile homes composed only 3.7 percent of the

housing stock in Grand Rapids, as compared with the national average of eight percent

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(Knowledgeplex 2000; MHI 2006). Re-evaluating zoning ordinances to ease accommodation of

manufactured homes could quickly ease pressure on the local affordable housing market.

Demand-side strategies

Advocates of demand-side strategies argue that enhancing low- and moderate-income

households purchasing power presents a more efficient means of addressing housing

affordability. The Housing Choice Voucher program, one of the largest federal housing programs,

follows this rationale by subsidizing a portion of the rent payments of poor tenants. This section

presents two strategies, both of which hold area employers responsible for closing the housing

affordability gap.

Increased wage requirements

The most direct way to address workforce housing affordability would be to introduce a

local living wage ordinance, requiring all employers to offer competitive wages and benefits.

This rate can be set using a variety of benchmarks, including poverty line figures, food stamp

eligibility standards, and family self-sufficiency studies (ACORN 2003). The Universal Living

Wage Campaign (ULW) uses HUDs thirty percent affordability standard for rental units to

determine adequate wages, although this formula could certainly be adapted to areas where

homeownership is more prevalent, as is the case in the study area (ULW 2001). Additions to the

ordinance may include requirements for first-source hiring, or for initial advertisement of new

positions on a local basis only (ibid).

According to McDermott, a variety of local and non-local factors undermine the

feasibility of wage reform in the Grand Rapids area, at least for now. Low workforce skill levels,

exacerbated by educated young adults escalating emigration to the Twin Cities and other areas

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outside the region, have allowed employers to keep wages low, particularly in those positions

that do not require skilled labor. Additionally, the areas history of high unemployment rates has

allowed employers to pay the minimum wage, as a willing workforce takes available positions.

Moreover, the cost of doing business in rural Minnesota is relatively high, with costs for heat,

shipping, sewer and water and technical support higher than in other areas (McDermott 2006).

As such, business owners reduce labor costs to remain solvent.

With the confluence of these factors, McDermott suggests that until changes in the

economic environment are made, introducing a higher minimum wage would only cause the

community to lose much-needed jobs. At present, local companies in the paper milling, mining

and utilities industries do pay living wages because they must retain their skilled laborers and are

sufficiently large to pay more for this workforce. Small start-up companies, however, would be

unable to afford the cost of business in the region and would likely relocate to other areas. Those

companies that could afford to stay, even with the increased cost of labor, would be unwilling to

pay more for lower-skilled employees (ibid).

These constraining factors should not be taken as indication that higher wages are not

needed, nor that a living wage initiative could never succeed in the study area. According to a

report issued by the Itasca Economic Development Council (IEDC), the Itasca County average

annual wage paid per job, while once equal to the statewide average, had sunk to two-thirds the

state level in 2003 (IEDC 2005). As home prices continue to escalate, the need for higher

compensation will only grow. At present, the Itasca Development Corporation is engaged in

workforce training programs, in order to improve the skill levels of current residents. Moreover,

increased economic activity ought to further reduce local unemployment rates. With improved

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economic conditions, the community will be in a better position to require higher wages from

employers.

Employer-assisted housing

Employer-assisted housing has its origins in the company town, which was common in

the US and the Iron Range in the 1900s, as mining interests moved across the area. Today,

company towns are being revived under the rubric of employer-assisted housing, although

contemporary advocates recognize drawbacks of the earlier system and limit the companys role

to the realm of home financing (Sullivan 2004). Many practitioners now encourage the

establishment of partnerships between employers and the workforce as a means to create

affordable housing.

Employer-assisted housing strategies can take a variety of forms. In most cases,

employers provide direct assistance with the purchase of a home, generally through closing cost

or down payment loans and grants, group mortgage origination plans or mortgage buydown

programs (Bell 2002). These loans may be forgiven incrementally, as the employee remains with

the company, or offered at below-market interest rates. Through this assistance, minimum-wage

earners can more easily cover the gap between their earnings and the cost of buying a house.

The company also benefits from working with and assisting its employees. These

programs can help guarantee the presence of an available labor pool and generate better

relationships with the community, government, organized labor, and most importantly the

employees of the company (HousingMinnesota 2005). Many advocates feel communitywide

employer-assisted housing is easiest to provide in small towns such as Grand Rapids, where the

relationships between a company, its employees, and the local government are clearer, and

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housing options are scarcer as there are not inexpensive suburbs or central city areas in the

immediate area, where workers can relocate to cut down on housing costs (Sullivan 2004).

Recommendations for further research

As local stakeholders begin to think about the best ways to ensure that an adequate

supply of workforce housing exists in the study area, some additional situations and scenarios

should be taken into consideration. Completion of additional studies would also refine current

assumptions and resolve persistent questions, allowing for a more accurate base scenario from

which to develop housing development strategies.

Obtain estimates of local construction capacity

As the permitting process progresses and companies get closer to hiring contractors to

work on their projects, local officials will be able to consult with those firms to determine where

their workforce and subcontractors are drawn from. By that time, however, it may be too late to

ensure that suitable accommodations are provided for non-local temporary workers. To arrive at

a precise estimate of non-local construction employment, company officials should be consulted

regarding the proportion of construction workers needed in various trades, which can be applied

to the projected number of total workers at each project. Local union representatives can then be

asked to estimate the number of their members who will be available to work on these projects;

the balance will be non-local employees.12

Survey of hotel owners and proprietors

As previously mentioned, the Grand Rapids area benefits from the tourist trade year-

round. In this analysis, it is assumed that housing temporary construction workers in area hotel

12 This method was suggested by Itasca Development Corporation/Jobs 2020 president Peter McDermott, and wasattempted for this analysis. Unfortunately, the unresponsiveness of company officials prevented its application.

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rooms during the construction period is not a feasible option. However, it is possible that some

proprietors would be willing to reserve a block of rooms for workers, particularly during times

when tourism slows. A survey of area owners is recommended to assess the possibility of

accommodating construction workers in this manner.

Updated housing market analysis

This analysis has drawn heavily from a housing market analysis completed by Maxfield

Research Inc. in 2003 for the Housing and Redevelopment Authority of Grand Rapids, City of

Grand Rapids, and Independent School District #318. It is recommended that a similarly

comprehensive study be conducted for the labor shed area, accounting for both growth projected

by the State Demographer and growth stemming from the operation of the Minnesota Steel and

Excelsior Energy facilities, in order to create an updated snapshot of housing conditions and

anticipated housing needs. This analysis should include an inventory of unoccupied housing that

is notfor sale as well. Approximately half of the 2,338 vacant non-seasonal units identified by

the 2000 US Census were not for sale or rent; these structures could present opportunities for

rehabilitationa means of creating affordable housing that is considerably less costly than

creating new structures.

Implications of the Blandin paper mill expansion

The Blandin paper mill is the second-largest employer in Grand Rapids, with roughly 500

employees (Northland Connection 2005). Currently, a project to replace an old paper machine

with a new, more efficient one is under consideration. While the net employment impact of this

project would be negligible, approximately 1,000 additional temporary workers would be needed

during the construction period (Chandler 2005). If this project goes forward, temporary housing

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needs would skyrocketa scenario that local officials ought to take under consideration. Should

the project fail to go through, an estimated 250 local jobs would be lost, according to the

Minnesota Department of Natural Resources' draft Environmental Impact Statement (Brissett

2006). The local impact of this job loss would be dramatic and far-reaching, and would likely

affect the number of local employees filling new permanent and auxiliary positions.

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Boehm T. and A. Schlottman (2004) Is Manufactured Housing a Good Alternative for Low-Income Families? Evidence from the American Housing Survey. Washington, DC: HUDOffice of Policy Development & Research.

Brissett, J. (2006, February 25) Blandin considers Duluth Warehouse.Duluth News Tribune.[Online]. Available: .

Brown, K. (2001) Expanding Affordable Housing Through Inclusionary Zoning: Lessons fromthe Washington Metropolitan Area. Washington, DC: The Brookings Institution Center onUrban and Metropolitan Policy.

Bujold, M. and Sjogren, M. (2003) Housing Market Analysis and Demand Estimates for GrandRapids, Minnesota. Minneapolis: Maxfield Research Inc.

Chandler, G. (2005) Personal communication.Blandin Paper. 17 October 2005.

Christianson, M. (2005) Personal communication.Northern Minnesota Builders Association. 10November 2005.

Concerns raised about Gillette housing market. (2005, June 7)Billings Gazette. [Online].Available: .

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Hendrickson, C. (2005) A Community Guide to Creating Affordable Housing.Business andProfessional People for the Public Interest. [Online]. Available: .

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McRae, S. (2006) Personal communication. Gillette Community Development Authority. 9March 2006.

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Minnesota Steel (2005) Project Description [Online]. Available: (29 October 2005).

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Strauss, K. (2005, October 9) Future bright in development, according to DEED spokeswoman.Timberjay Newspapers. [Online]. Available: (15 September 2005).

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Visit Grand Rapids (2005) Grand Rapids Minnesota Conferencing Lodging [Online].Available: (25October 2005).

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Appendix 1: Labor Shed

Exhibit A: Where Workers Employed in the City of Grand Rapids Live

Baseline Count of Jobs 2003 2002

Count Share Count Share

All Jobs (Private Sector Only) 1,914 100.00% 1,587 100.00%

Cities/Towns Where Workers Live 2003 2002

Count Share Count Share

* Unincorporated Areas 1,044 54.50% 806 50.80%

* Grand Rapids 457 23.90 413 26

* Cohasset 133 6.90 115 7.20

* La Prairie 36 1.90 29 1.80

* Hibbing 33 1.70 14 0.90

* All Other Locations 211 11 210 13.20

Counties Where Workers Live 2003 2002

Count Share Count Share

* Itasca 1,620 84.60% 1,314 82.80%

* St. Louis 103 5.40 58 3.70

* Hennepin 30 1.60 38 2.40

* Cass 25 1.30 11 0.70

* Dakota 21 1.10 8 0.50

* All Other Locations 115 6 126 7.90

Source: US Census Bureau LED On the Map

Exhibit B: Travel Time to Work for Workers Age 16+

Itasca County,

MinnesotaShare of all

Workers

Total: 18,909

Worked at home 772 4.1%

Did not work at home: 18,137

Less than 5 minutes 906 4.8

5 to 9 minutes 3,010 15.9

10 to 14 minutes 3,599 19.0

15 to 19 minutes 3,043 16.1

20 to 24 minutes 2,590 13.7

25 to 29 minutes 914 4.830 to 34 minutes 1,490 7.9

35 to 39 minutes 245 1.3

40 to 44 minutes 391 2.1

45 to 59 minutes 760 4.0

60 to 89 minutes 639 3.4

90 or more minutes 550 2.9

U.S. Census Bureau 2000

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Appendix 2: Household Projections, 2000-2015

2000 2015

AmountChange,

2000-2015

PercentChange,

2000-2015

Itasca County

Total Households 17789 21010 3221 18.1Married Couples 10370 11600 1230 11.9Other Family 2015 2360 345 17.1

Nonfamily, Living Alone 4634 5990 1356 29.3

Living Alone, 65+ 2178 2710 532 24.4

Other Nonfamily 770 1050 280 36.4

St. Louis County

Total Households 82619 92410 9791 11.9Married Couples 40706 43710 3004 7.4

Other Family 10668 11576 908 8.5

Nonfamily, Living Alone 25804 30760 4956 19.2

Living Alone, 65+ 10719 11726 1007 9.4Other Nonfamily 5441 6370 929 17.1

Source: Minnesota State Demographer, 2003

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Appendix 3: Number of Households and Percent of all County Households in 1990 and 2000

Census Tract

Number ofHouseholds--

1990Share of all CountyHouseholds--1990

Number ofHouseholds--

2000

Share of allCounty

Households--2000

St. LouisCounty

113 870 1.10% 891 1.08%

121* 2,004 2.53 2,043 2.47

122 977 1.24 811 0.98

123 1,139 1.44 1,301 1.57

124 2,084 2.63 1,937 2.34

125 1,300 1.64 1,374 1.66

126 2,196 2.78 2,192 2.65

127 464 0.59 965 1.17

128 1,416 1.79 1,353 1.64

130 1,198 1.51 1,340 1.62

131 1,503 1.90 1,268 1.53132 1,642 2.08 1,723 2.08

133 1,729 2.19 1,732 2.09

134 1,157 1.46 1,214 1.47

135 835 1.06 837 1.01

151 1,172 1.48 1,172 1.42

Total 21,686 27.41 22,153 26.78

Itasca County

9803 1,246 8.08 1,656 9.29

9804 747 4.84 1,443 8.10

9805 1,128 7.31 1,171 6.57

9806 926 6.00 1,129 6.349807 1,393 9.03 1,875 10.52

9808 3,051 19.78 3,414 19.16

9809 2,379 15.42 2,642 14.83

9810 2,230 14.46 2,471 13.87

Total 13,100 84.92 15,801 88.68

* Tract 121 was referred to as Tract 121.98 in the 1990 Census, but the geographic area coveredremained the same from 1990 to 2000.

Source: 1990 US Census SF 3; 2000 US Census SF 3