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Saturday, October 23, 1999
By GUY PRIEL Journal Staff Writer NEW ULM -- In an attempt to provide more housing and lure more people to New Ulm, the Economic Development Corporation is exploring options with various state agencies. "There is an evolution in the area of economic development in town," EDC Director Brian Tohal said. "Local companies are having trouble getting employees to come here to work because of a lack of housing." In an attempt to be responsive to the needs of the existing employers, EDC officials have recognized that it is enough of a problem that something needs to be done, he said. "We are trying to do something in cooperation with others to solve the problem," he said. "We need to attempt to quantify the housing problem. This is not a new push, it is basically a change of focus." Over time economies change and there be a time in the future when officials will have to find ways to fill empty buildings, he said. "We don't have that problem right now," Tohal said. "The problem now is getting enough housing for employees. To address this problem we need to fill the needs of employees and employers." There are two agencies through which funding is available for housing programs that are being looked into by EDC officials, he said. One of these, the Greater Minnesota Housing Fund, is a philanthropic organization established by the McKnight Foundation that focuses on economic growth and housing shortages in communities. "This organization involves the employer in obtaining various types of funding, such as providing a matching down payment or some type of deferred loan," Tohal said. The other agency is the Minnesota Housing Finance Agency, which helps promote economic growth and works in a situation where employers are willing to participate in the financing program. "With this program, we essentially bring more money into the community per house, with up to $20,000 per unit," Tohal said. "It reduces the cost to the end user and removes a barrier, thus making the community more attractive for people to stay." When barriers are removed, the workforce is stabilized, decreasing turnover and reducing absenteeism, because housing is a major factor in attracting employees, he said. "When you discuss an employer match for financing, you essentially put more money into the community," he said. "The beauty of both of these programs is that they are flexible and can be adjusted to meet the needs of each community." The first order of business the EDC needs to do in this process is to identify the housing needs of the local employers and decide which options work best for the employer. Options include the employer developing, building and even owning the housing units; or providing credit counseling, payroll deductions or low income tax credits. "The city has already begun improving housing and has taken steps to become proactive in the process," Tohal said. "It will become a joint effort." Because there are multiple programs available for grants, it will take time to analyze the situation and determine what works best for everyone involved, he said. "What we are talking about here is not low income housing, but average homes for average people, making $40,000 or higher," he said. "the programs are all tied to communities with vital economies like New Ulm." It is an economic development issue and the primary mission at this point is to help employers grow. "It is my perception that the availability of employees and housing is a hindrance of economic development," Tohal said. "We need to undertake initiatives to increase housing stocks." Local employers have been advertising 60-70 miles away and that's quite a commute. Better housing for local employees is needed and the EDC is exploring their potential role in the process, he said.
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