On Monday night at the community center, a representative from AdMark Resources presented the findings of a recent Montevideo housing study before a joint meeting of the Montevideo City Council and Economic Development Authority.
“Because of the new school being built and the vets home, we needed to know what our housing needs were,” said EDA President Marv Garbe. “I think the EDA always knew what we needed but you have to have a housing study for investors and developers.”
The following is a summary of the study’s findings.
Population and Household Data
“Between 2010 and 2018 the population of the Study Area decreased by 2.0% but is projected to increase 0.5% by 2023. At the same time households decreased at a lesser rate of 1.3% but are projected to increase 0.78% by 2023. Average household incomes are projected to increase from $42,330 in 2000 to $66,214 by 2023. There were 258 substandard and temporary housing units within the Study Area in 2016.”
“Area employment remains steady with projected controlled growth. The largest employer within the Study Area is the Montevideo School District with 500 employees. A survey of thirteen identified employees in Montevideo indicates two of the surveyed businesses grew over the past two years, with four projecting growth over the next two years. The 2017 unemployment rate for Chippewa County was 4.1%, with the State of Minnesota having a 3.6% unemployment rate. These are the lowest rates over the past ten years for both the County and the State.”
Single Family Home Market
“As of December 10, 2018, there were 46 single family homes for sale in the Montevideo zip code area as found on Realtor.com. The median price is approximately $140,950 with a range between $32,500 and $575,000. More precisely, there are 15 homes for sale below $100,000; 16 homes between $100,000 and $199,999; 9 between $200,000 and $299,999; 4 between $300,000 and $399.000 and 1 at $575,000. The higher priced properties are typically located outside of the city and have water, larger acreage and/or out buildings.
Based on recent history with an average of 60-70 homes sold per year, it would appear that the 46 available homes located within the city of Montevideo represents about an 8 month supply of homes. Realtors felt there is a shortage of inventory and homes correctly priced sell within two weeks. The majority of buyers are primarily repeat home buyers moving up or downsizing.”
Rental Housing Market
“Overall, the City of Montevideo has a shortage of quality rental properties, particularly in the higher price ranges. There are currently no existing apartments that are designed to attract young professionals or young families in need of a temporary housing option while they pursue purchasing or building a home, due to a shortage of three-bedroom units. There are also no newer apartments designed to meet the changing demographics and built with amenities to attract people to the community. And, there are few market rate rental options for empty nesters and seniors.”
“Projected population and household growth is continuing to increase slightly, identifying a combined projected need due to growth and unmet housing demand for additional home ownership units in the $150,000 to $200,000 price range. Just based on projected growth there is a need for 18 new housing units by 2023. Additionally, with the lack of buildable lots, the City of Montevideo needs to undertake expansion and creation of new building sites across the city.
Also, due to the low values of existing housing, home fix-up funds should be secured to improve the quality of existing housing and first-time home buyer and down payment assistance programs could be implemented for new and higher priced homes.
At a minimum, the city should work to attract a 24-32 unit apartment building with a mix of one, two, and three-bedroom units; four to six, two and three bedroom two-story townhomes with rents in the range of $800 to $1,200 would also provide a welcome option to the community.
Since the area is aging, the community may wish to attract additional senior-targeted twin homes and patio homes with a mix of the 6-10, one and two-bedroom one-story units with rents in the range of $900 to $1,200. These units as well as the townhomes could be built in phases.”