Study tackles Fairmont housing issues
FAIRMONT — Cities need adequate housing to attract qualified and quality employees, which helps spur business expansion and economic growth.
Numerous “for sale” signs in front of homes means there is housing available, but does that housing meet the needs and demands of residents? Is it too costly for some while lacking amenities and upgrades demanded by others?
In 2013, Fairmont commissioned a housing study, and it was updated in 2019. The findings were released earlier this week to a group representing area financial institutions, real estate, economic development and local government.
The study and the update were researched and developed by Community Partners Research Inc. of Faribault and presented by Steve Griesert, who has decades of experience in economic development, housing and consulting with cities and counties. Through Community Partners Research, he has participated in more than 400 housing studies.
The 103-page report can be viewed online at www.fedamn.com by clicking on “news” under the “about us” drop-down menu.
The study evaluated demographics, existing housing data, rental housing inventory, senior housing, and employment and economic trends. All the information was compiled into 16 overall findings and recommendations.
Some information validated that Fairmont is like many other communities in that its population is aging, with a growth in the 55-74 age category.
“We see this everywhere. That’s the Baby Boomers. This is typical everywhere we go,” Griesert said.
Other data showed the individual median income of Fairmont and Martin County residents in 2018 to be well below that of the state average. Fairmont’s median income that year was $48,826, with the county average at $53,915. The statewide median income in 2018 was $68,411.
Family median income, for households with two or more, registered at $67,297 for Fairmont, $68,650 for the county and $86,204 statewide.
The income data also encompassed what percentage of income that renters and homeowners paid for housing. Griesert said the norm is 30 percent of income for housing, but a little more than half, about 53 percent, of renters pay the norm. The rest are paying a higher percent of their income each month for housing.
Homeowners fared much better financially. Only 17 percent paid more than 30 percent of their monthly household income for their mortgage.
In 2019, there were 124 sales of single-family homes in Fairmont ranging in price from $22,000 to $625,000, resulting in a median sale price of $116,443. Ten years earlier, in 2009, 96 homes were sold with a median price of $79,175.
In November, there were 73 single-family homes in Fairmont listed on the website Realtor.com. The asking price for half was under $125,000, with the remaining half higher than that, including 12 listings with an asking price of more than $250,000.
The survey showed the number of rental housing units has changed little since the 2010 U.S. Census. A 2018 American Community Survey estimated 1,785 rental units in the city, with more than 34 percent of all households living in a rental unit.
Griesert said that a vacancy rate of 3 to 3.5 percent is considered “healthy.” Fairmont’s rental housing has a vacancy rate of 2 to 2.5 percent.
One of the surprising portions of the survey involved the local workforce. Information from the Census Bureau indicates there were 5,800 employed within Fairmont’s city limits in 2017. Less than half, about 47 percent of these workers, actually lived within the city. About 3,100 of the people working in Fairmont at that time commuted to work from mostly Martin and Faribault counties while almost 1,900 residents were traveling out of the city to work.
The survey also looked at growth patterns for Fairmont and Martin County over the past few decades and found the most recent reliable estimates for the city show limited change in the number of households over the last 10 years, although the population is declining due to age. Senior citizens, families with fewer children and an increase in the number of one- and two-person households resulted in fewer occupants in each housing unit. About one-third are single-person households. This is consistent with the state demographer showing the city losing only one household per year since 2010.
The survey indicated the population in Fairmont may continue to decline over the next five years even if the household count remains stable, but part of the issue impacting limited growth in Fairmont will be housing unit availability. Research showed a high occupancy rate in existing housing but minimal growth in overall housing stock.
Analysis projected that Fairmont has the potential to add housing units over the next five years. A summary of age-based projections show that the biggest growth segment to be those above age 65, with nearly 40 percent of the county households predicted to be in that age group.
Evaluating all the data in the survey, the following recommendations for rental housing were offered:
o Develop 36 to 42 traditional market rate rental units.
o Promote the development/conversion of 18 to 22 affordable market rate rental units.
o Develop 20 to 24 income-restricted moderate rent housing units.
o Monitor senior assisted-living supply and demand.
o Potential demand for 10 additional memory care beds by 2024.
o Potential demand for 30 to 42 additional senior rental units with light services.
Recommendations for home ownership included:
o Demand for four to six moderate to higher-priced homes constructed annually.
o Promote the construction of two to three affordable homes per year.
o Attached single-family housing, such as twin homes, should continue to gain market share.
o Monitor demand for additional condominium development.
o Coordinate with agencies and non-profits than develop affordable housing.
o Consider the creation of housing construction of initiatives.
With the median age of homes in the city as being built in 1958, the survey also encouraged promotion of housing rehabilitation programs for rental and owner-occupied homes and continued demolition of blighted structures.
Griesert encouraged some type of partnership between local government and private developers to spur housing construction.
“A lot of times, just having a housing study will get developers going,” he said.
Linsey Preuss, Fairmont economic development coordinator, said she has been in communication with developers who have been waiting for the results of the study.
She asked the representatives from financial institutions, real estate, economic development, city and county government what they would be willing to do to encourage housing construction.
All segments offered their input, with a unanimous opinion that education and collaboration must continue. Also: Let renters know that the old standard of a 20 percent down payment is no longer valid, and educate them on how to buy a home. Contractors should be given the housing study. Sitting down with the developers to stress the opportunities available and finding a way to work together.
Griesert said a high demand for housing or incentives, such as a tax abatement on construction of multi-family units that the city currently offers, will attract developers who will go where they can make money or cut costs.