Uneven recovery: Picket fence still faded in exurbia

Five years ago, when the housing crisis hit with a vengeance, new home construction in the exurban ring counties around the Twin Cities and St. Cloud came to a screeching halt, new housing tracts were boarded up, and thousands of people lost homes they couldn’t afford after losing jobs.

Find more articles in the Uneven Recovery series, an ongoing collaboration between Minnesota 2020 and Minnesota Housing Partnership.

Within the past two years, new families have moved in, repopulating vacant homes and starting daily commutes from exurban bedroom communities all over again, said Tony Rasmuson, who works in the Wright County Assessor’s office. St. Michael and Albertville, two I-94 communities known for commuter traffic jams going both north and south during drive times, have mostly found new occupants for their foreclosed properties, he said.

Single-family homes in Albertville and St. Michael, for instance, have recovered 21 percent and 15 percent of their value, respectively, since hitting bottoms in 2011, according to data from Twin Cities metro realtors. New home construction has resumed up and down the freeway. Next door in Otsego, 190 new homes were built in 2013, said Barb Williams with the city’s building inspection office.

The Minneapolis Area Association of Realtors found the median home price in Albertville had recovered to $179,450 in November last year, up from a low of $147,650 in 2011 but still $90,000 less than the housing bubble peak price in 2005. St. Michael median home prices followed the same pattern, peaking at $292,381 in 2005, bottoming at $170,964 in 2011 before climbing back to $197,000 by November.

Across the Mississippi River, in Sherburne County, similar signs of recovery and recycling are underway, and foreclosure rates have dropped. But problems still linger for families facing twin costs of housing and transportation.

“We are still trying to figure out if we are urban, suburban or rural,” said Mary Jo Cobb, interim director of Health and Human Services for Sherburne County. All agree, she added, that Sherburne is a “commuter county.”

When gasoline prices dipped to around $1.90 a gallon in 2009 commuting wasn’t too much of a household hardship, Cobb said. County residents were mostly two car families with two wage earners. With gasoline prices now in the $3.30 to $3.60 range, transportation costs have nearly doubled.

All in all, statistical signs of improvement haven’t lessened hardships for many county families, said Dan Weber, the county assessor. His records show foreclosure actions dropped to about 360 in 2013, down from nearly 830 in 2010.

Take another look at this interactive map, which tracks foreclosure rates statewide.

VIEW INTERACTIVE MAP

The cities of Elk River and Big Lake have had the highest numbers of foreclosures in Sherburne County, but third on Weber’s list is Zimmerman, a farm town until recent decades, which had 43 foreclosures last year after 70 and 55 foreclosures the two years before.

The exurban counties of Isanti, Sherburne, Mille Lacs and Chisago had the highest foreclosure rates among Minnesota’s 87 counties. Anoka County, which has exurban properties for long-distance commuters as well, was next and followed by exurban Pine, Scott and Wright counties. Twin Cities counties of Ramsey and Hennepin finished out the Top 10 list of foreclosures by percentage.

Distance from jobs is an important factor in affordability. The U.S. Departments of Housing and Urban Development (HUD) and Transportation (DOT) have an online calculator that is designed to help people figure their combined housing and transportation costs.

Considering the commuting communities around the Twin Cities and St. Cloud, these combined costs are where exurban living loses ground to metro and closer in locations.

Heating is another cost impacting exurban living, said Wright County’s Rasmuson. A lot of housing in this region is not connected to natural gas lines. Propane costs have skyrocketed from $800 to as much as $2,400.

Problems with homelessness and poverty often associated with urban areas are now an increasingly reality in places like Cambridge, Isanti and other bedroom communities.

As in most of Minnesota, the divide between owners and renters remains stark. About 85% of households in Chisago and Isanti counties are homeowners with a median income of $71,000 and $64,000 respectively. But renters in these same counties have a median household income of less than $30,000, and are more likely to end up homeless.

Mary Westlund, program manager and family educator for New Pathways Inc., at Cambridge, said her network of volunteers from 23 churches in Isanti and Chisago counties has provided temporary housing, meals and services for about 500 families and 900 children since it was founded in 2000. Affordable housing was always an Isanti County problem, she said.

Volunteers prepare meals in church kitchens. Sunday school rooms are converted into temporary shelters. And still, she said, 645 families have been turned away “because of lack of capacity. It isn’t getting any better.”

According to the triennial Wilder Research study of homelessness in Minnesota, homelessness in the Central region is indeed on the rise – up 40% from 2006 to 2012, faster than the state as a whole. The counties in the state’s central region include Benton, Cass, Chisago, Crow Wing, Isanti, Kanabec, Mille Lacs, Morrison, Pine, Sherburne, Stearns, Todd, Wadena, and Wright Counties, many of which high are exurban counties where foreclosures have been high.

Former middle class workers who lost their previous jobs in the recession are now taking low-paying jobs that used to provide incomes and rent money for the most impoverished area residents, Westlund reports. Those neighbors are likely the ones being pushed into homelessness.

In 2014, the Minnesota legislature will consider $100 million in bonding for housing. One of the uses for this funding would be supportive housing, which couples housing with support services to ensure that people who have been homeless can remain in housing successfully.

Another would be to preserve federally-assisted rental housing for low income people. Such units are too few to meet needs of Minnesota’s renters. But the buildings that do exist are at risk of being lost as properties age and decay. Building owners and housing authorities can’t collect enough from rents from low income residents to make needed repairs, and other funding sources are inadequate. State bonding would help preserve this needed resource – in exurban Minnesota and all throughout the state.

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    Lee Egerstrom's picture
    Lee Egerstrom

    Lee Egerstrom is an Economic Development Fellow at Minnesota 2020.