Session 3
A new era in the job and labor landscape – more jobs than people – is upon us. The demand for housing in rural areas is increasing so people can move in and fill these job vacancies. This session, presented by Kelly Asche from the Center for Rural Policy and Development, will provide the most recent data that illustrates how rural conditions have changed, making for healthy discussions about the current demographic and economic vitality of rural areas.
More from the Center for Rural Policy and Development: https://www.ruralmn.org/
@ruralpolicymn
Kelly Ash uh Center of Center for Rural policy and development Kelly’s a really smart guy that’s got some great information I knew Kelly I’ve known Kelly for a really long time I knew Kelly back when he spent his nights and weekends scrubbing out kegs so make sure
You ask about that in the Q&A um but I’m not going to give a lot of uh background I’m going to turn it over to Kelly because he’s got Aude lot of great stuff to say thanks Kelly thank you appreciate it awesome thanks everybody yeah thanks for having me um I speak
Rather loud so if this is too loud just let me know I’m trying not to blow your ears out but um my presentation today is just going to try to round up a lot of different things and it’s centered around this idea that we need people not
Jobs and that’s kind of the main theme we’re going to be pushing and I’m sure you all know that fact but I’m going to be giving an overview of some of the strategies that are being implemented in Ro Minnesota and being implemented in not tale County and how it all connects
Together um I have to give the obligatory what is the center for RO policy development we are 501c3 nonprofit um we are a nonpartisan research organization we were actually created by the Minnesota state legislature back in the late 90s we synthesize data gather data uh do survey
Work we do all kinds of analysis uh and give it mostly to legislators but also County Commissioners edas anybody else that can find information or wants information regarding rural Minnesota and that’s all we focus on is rural Minnesota and as uh any uh you know uh
Rural organization we try to do a lot with very little soar three of us across the state uh I’m out of New London Minnesota and Candy Ohio County my uh other colleague Marney Warner she’s out of Mano and then our boss the CEO executive director Julie Tess she’s out
Of Wasa Minnesota actually a small town called Waldorf she lives on her family farm there if you are interested uh these are our most latest research reports just go to rural mn.org if you’re interested we do a broad swath of topics regarding Ry Minnesota we try to do about five to six
Each year uh if if we’re lucky Marne and I try our hardest to get out as much as we can okay today this is three things we’re going to talk about and I’m going to fly through this stuff but I think it’ll resonate with a lot of you and
Provide you some data and kind of some concrete ideas and also kind of I think affirm or confirm some of the things you guys are doing in this County as actually being in the right direction even though they’re relatively new ideas and maybe a bit uncomfortable for a lot
Of folks because it is so different we’re going to talk about a new labor force reality just a real quick overview the labor force numbers uh is it real in migration to rural Minnesota just what the most recent kind of data is showing and it looks good for Rural Minnesota
And Otter taale county is really primed to benefit from it and a shift in Economic Development and that’s getting uh this shift away from job Recruitment and retainment towards people recruitment retainment how different that looks so let’s just start out with talking about our unemployment labor
Force so in Minnesota we have a really great economic system we’ve had it for a long time so we have the top five lowest unemployment rate we’ve had that since the 1970s top five highest labor force participation rate across the United States top performing State during recessions uh this happened during the
Great Recession uh from 2008 to 2012 and just during the pandemic that little blip we had we were the top performing State during that time as well and we Al also have the fifth most diverse economy and this is one that’s really important to me because we are none of these
Things we are not the top five lowest we are not the top five highest and we’re not a top performing state if we don’t have a diverse economy and you do not have a diverse economy if you do not have everything outside of the 7 count
Metro so if you’re ever looking for a talking point about why rural Minnesota or greater Minnesota is important that’s probably the number one key point if you’re trying to make an economic argument about it so what may threaten how awesome Minnesota is right now it’s lack of
People and this is an entire Midwest but we are severely lacking people in Minnesota we’re a slow growth State we have been for a long time we labor force growth has been decreasing for two decades and actually during the pandemic was our first actual decline in the labor force in modern
History we’re terrible at keeping our youth and this is a Statewide issue as much as we want to focus on rural areas of keeping our youth the Twin Cities is just as bad they just happen to get the youth from our rural regions in a few
Other states um but as far as their own youth they’re pretty terrible at it so I’m going to talk about unemployment and labor force and this is always kind of the tension right like somebody will argue about low unemployment rates and then somebody will pipe up yeah that’s
Cuz nobody is working right and then that you talk about Labor Force so like let’s just kind of clear the air cuz both are right um but if we need to talk about them in an accurate and correct way let’s talk about this so I’m going to be talking about unemployment and
Unemployment actually is folks participating in the labor force that’s the key difference so if you’re unemployed that means you are not working and you’re absent from a job vacation ill you might have been laid off for a winter a lot of seasonal work particularly in northern Minnesota or
You might be on layoff awaiting recall and you’re actively looking in the last four weeks and available for work that means you’re unemployed but you’re still in the labor force that’s what that means so we’re going to talk about that first these are the planning regions
You’re going to see some colors uh on my charts just so you know this is what the uh colors represent in terms of different regions and obviously autot Tales Northwest huge region pretty nuanced across it now provide some data for Otter taale as well so this is the
Unemployment rate since 2000 uh and as you can see we obviously say had a Great Recession there from 2008 2012 you had that Spike steady declines a quick little Spike during the pandemic and then just the bottom dropped out and we are at the lowest unemployment rates uh
We’ve ever seen uh since we’ve been recording unemployment rates in Minnesota uh in Northwest Minnesota 2.7% we want to get a little more granular here’s the entire State the actual lowest unemployment rate is in the very southwest corner of the state rock County at 1.5% but outter tail up here I did your
Whole Economic Development region just so you can kind of see a comparison across the region you guys are between 1.5 and 2% 2 and a half% these are his historically low numbers there are not a lot of folks on the unemployment roles to grab from to fill your labor
Force so let’s talk about the labor force then because we have had a lot of people leave the labor force over the past few years and so let’s kind of get a sense of what that looks like this is the total number in outertale county of folks participating in your labor force
And as you can see there’s been very little change uh you have just been a flatline since well probably since the early 2000s um but you are not growing and you are not declining this is actually pretty good news a lot of rural areas particularly when you get in the
Southwest have been declining and I’ll show you a chart on that in just a second if we were to look at it every year you could see uh this is otter taale County again and from 2012 to 2013 you had 179 people join your labor force
232 the next year you could kind of see a little bit decline in 2018 and then you could see during the pandemic you lost about 800 900 people and then over the last year you gained 216 this is pretty darn good honestly um even though you guys are just kind of
Flatlining in terms of your labor force you’re not seeing huge declines which is a huge win for a lot of rural regions um but just to give you the scope of how much we don’t have people in our lab or are are are coming into our area aale
Colony ended 2022 with 7 time 715 more people than the labor force in 2012 so over the last 10 years you’ve added just over 700 people so that’s not a lot that’s again essentially pretty much zero particularly according to how much economic growth is happening across the
State I did it by planning regions just so you kind of get a sense of where you guys stand you guys are in a Northwest region there and Northwest overall does all right so you can see L 800 kind of a little bit of a roller coaster there
Huge drop uh during the pandemic and then 1300 so you guys gain a few hundred there well I should say since 2012 this entire region has gained about 2,000 people over the last 10 years into its labor force course not bad you guys have gained 700 so according to the region
You’re doing really really really well uh but you can see other regions Northeast is actually operating with almost 5,000 less people in the labor force than 10 years ago and in Southwest 10,000 less people I just had to present down there in Tuesday regarding how many high school students they’re losing to
South Dakota and St Cloud and Mano and uh they’re kind of they’re really really really trying hard to figure out how to increase their labor force so you guys are doing really really good this is good news even though the numbers aren’t like super exciting right um but in
Comparison you guys are doing great and I wanted to Pro uh choose this is just changing labor force so if we were to compare where you were right before the pandemic to right after the pandemic um from 2019 to 2012 like we can look at all the numbers we want the percentages
Actually mean a lot in rural areas and you can see you guys are EDR 4 here and you guys lost about 3500 you have about 3500 from 2021 to 2019 that was only about a 3% loss way better than say EDR 6w which is like Locka Paro Swift County
Yellow medicine some of those they lost 1600 so not as many as you but that was 7% of their labor force uh and so they’re really really struggling down there that’s a big deal so again you guys are performing really really well now folks are always kind of like
Well you know there’s always these arguments who’s dropping out of the labor force right it’s all these young punks playing video games hanging out in their parents basements right there probably is some of that I’d probably do it if I could um but who dropped out
Labor for us if we look at the data it was quite clear in rural areas and in this region individuals 55 and plus were pretty big part of that and we’ll talk a few reasons about that and then uh uh women work women in the workforce dropped out in particular particularly
Related to healthcare and I’m sure some of you are have friends or know people or might be married to somebody that just got out of that business when the pandemic was hitting because it was hard it was super hard um and so why leaving the labor force we don’t we not able ble
To have focus groups with these people obviously but there has been some research coming out and there’s a lot of different factors right so if you’re looking for your Smoking Gun Factor on why people are leaving a labor force you’re not going to find it um but it’s
Kind of a lot of Life circumstances so one was need for child care we’ve seen this both in terms of the spouse leaving the labor force to provide child care because they couldn’t find it but also grandparents leaving the labor force to provide child care for their
Grandchildren uh we saw it on both sides so again I think it hit women kind of hard as well as 55 and older who might have had grandchildren fear of covid-19 right so there was a lot of that particularly in the healthcare industry and anyone that was 55 and older also I
Think uh some of the mandates around having to wear masks there was a lot of 55 and noer that just couldn’t deal with it right had to leave the labor market there’s just all these different kinds of reasons that play into this cultural changes at work I don’t think this gets
Enough attention um maybe you guys have some spouse or friends but folks that all a sudden you’re working from home and you’re 55 and older you’re not used to it you’re used to clocking in at your job job you don’t want to sit behind a computer that maybe you don’t even have
With terrible internet uh to try and do your job right so there was a lot of things that happened there as well as I know it sounds crazy but wage increases particularly uh over the last few years it’s starting to change now but really went to New entry folks that were coming
Into the labor force and the the wages for the folks that had been working for 20 some years didn’t bump up with them and I think there was a bit of kind of like well you know I don’t know what what a good British term like piss off
You know like I don’t know like I always listen to the BBC and whenever someone gets fired what do they say sacked he was sacked I just love that so I try and use it as much as I can all right so anyway we have a lot of things
Going on labor force we had that kind of drop off from underneath us while having low unemployment rate while having all these demographic changes of people leaving the labor force which leaves us with a whole lot of job vacancies and I know you all know about Job vacancies
Here um but I just want to give you some data to kind of show you how how severe this is and then I want to transition towards like how different of a time this is and what that means for strategies so 2021 um in the state of Minnesota there are point4 job Seekers
Per vacancy so we didn’t even have a whole body for every job that was available uh in 2021 this is the job vacancy rate so this is the number of job vacancies in each of those planning regions as a percent of the total filled jobs the higher that percentage the harder it is
To fill those jobs right we consider three to 5% to be a healthy percentage which means you have job opportunities for people in your region while at the same time people are applying for those jobs like you have a labor pool to pick from as you could see in sou uh
Northwest you guys are at 8.6% Northeast is at 99.4% with darn near 10% job vacancy rate that is absolutely Bonkers and again I keep reiterating this there is no historical precedent to compare this to nothing we have nothing in modern history to kind of talk about well we’ve been through
This before and this is what we did we just don’t have that uh and so this is really really unprecedented and this is significant and it’s interesting if you ever hear I do go on tangents so stop me if I’m going too long but um I get really irritated because some people I
Read articles and they’ll be like oh R areas lost jobs again no we didn’t lose those jobs we lost the people filling those jobs those jobs are still there there’s just no one filling them and so if you ever get into a conversation or somebody that thinks they know what
They’re talking about is spewing off crap like that let them know like that is just not true at all and I’m tired of hearing it God feel I don’t know how many articles in the star tribute or whatever I got to read talking about rural areas like you
Don’t know what you’re talking all right so the data is quite clear job vacancies are high uh the Gap in wages between the 7 count Metro and Rural Minnesota has actually narrowed quite a bit uh largely due to our area is having uh job vacancies
Uh be an issue this is since the pre pandemic we’ve been dealing with job vacancies in rural areas it’s just lately that the S County Metro has gotten a little bit more pressure and now they’re kind of increasing their wages along with rural areas but that
Gap has narrowed quite a bit um and I put up here a significantly larger number of job agencies are full-time uh significantly larger number of offering health insurance benefits like businesses employers are doing what they can to try and fix this issue as well they’re increasing wages they’re offering benefit they’re doing
Everything that you would expect in the Natural Market to for them to do and it is happening also I would like to add job requirements used as a lever for applicant pool um if anybody ever again is talking about like well these are all low skilled jobs that’s not the case at
All uh when this data comes out they always say all right how many requirements are are uh you know required for experience and things like that to get the job and over the last few years like those requirements have disappeared but it’s only because they’re trying to increase their labor
Pool it has nothing to do with the actual uh uh experience required for that job because I think there’s probably Employers in here right where you’re like does you know does your blood flow will hire you right does your heartbeat will take you on so we’re having a fundamental shift take place
And ottero county has been really doing a really nice job at leading this kind of effort from business recruitment to people Recruitment and this is a really big fundamental shift that I think we’re still coming to terms with in terms of our policy and in terms of how we’re talking about
It in our communities and these are some uncomfortable conversations cuz I think a lot of uh government entities and uh even Partnerships between for-profit and private Industries are having to have discussions that just they’ve not used to how do we provide daycare how do we provide housing who’s going to put what
Kind of money into this to help fix the issue right and that’s a tough conversation uh and so no one should feel bad that this has taken a little longer that we’re not always having having success cuz right now we don’t even have a tool set to deal with this
Issue because most of the tool set is involved around job recruitment so it used to be about tax incentives which are still important don’t get me wrong infrastructure Investments and focus on labor force we now we’re talking about how do we collaborate to build Housing Programs child care how do we use
Visitor strategies to make our place seem like a great place to live so we can try and recruit them in uh healthare current resident engagement Investments and natural amenities and focus on quality of life issues these are all to play a role in these conversations so before kicking off into
Kind of what that ship looks like I just wanted to give a quick update on what the migration patterns are looking like because um as much trauma and uh challenges that the pandemic kind of gave to us it also has presented us an opportunity as a rural area that I think
Uh we can at least hopefully discuss in a positive way without having to uh also you know also acknowledge that it was a very challenging time with a lot of death um two drivers of population change so anybody that’s looking at population it’s so important to think
About who’s coming in who’s coming out and where population comes from there’s really two places right it can be natural change so you’re going to have a negative natural change change if you’re having more deaths than births in your area and then you have to talk about
Migration change are you having more in migration or out migration this is all these are the only two things that influence population uh change in our areas I’m going to be providing some more charts this is a state demographers way of cutting up and trying to find
Like a nice um I don’t know what you call it like range of rural versus Urban most of Minnesota is neither purely Urban or purely rural most most of Minnesota somewhere in between uh you can see otter taale county is kind of considered Town rural mix here on want
The definitions just let me know but it’s not that important but you can see a lot of this area is town row mix and obviously with Clay County um you’re going to have a little bit of that more urban influence so let’s talk about natural
Change and this is by ruken I put out County on the end here what this is saying is that that red bar is the annual natural change from 2010 to 2019 the orange bar is where we’re at this decade per year and as you can see OT
County last decade was having 27 more deaths than births per year so far this year it’s 98 more deaths than births and this is going to be the ongoing thing and the ongoing challenge that rural areas are going to have to deal with because of our demographics changing so much is that
You guys are running against uh and it sounds terrible please don’t be offended by this but you’re running against deaths more than anything uh so you’re going to have to try to get migration in here to make up for a lot more death because of your aging
Population and again we just I know it’s dark but we got to have an honest conversation about it right uh entirely worlds as you can see all those counties are having uh so far this decade 437 more deaths and burst 1100 for Town R mix 310 Urban toal as you get more urban
You’re going to have more bursts than deaths just because they have uh younger population they might have more of a bipac population those populations tend to have more children things like that but as you can see everybody’s doing a little bit worse than last decade this
Is going to be the continual Trend over the next 20 to 30 years is that we’re going to be dealing with that a lot more there’s going to be a lot more deaths than births so let’s look at migration change so otter taale County here again uh last
Decade you’re were dealing with about 195 people more people coming into the county leaving the county that’s good that’s real good this decade so far 248 so that’s an increase that’s great because you’ve had more deaths than birs you need that immigration to help kind
Of uh uh level that off and as you can see entirely rural switched now this decade last decade they had they were losing 276 in out migration now they’re gaining 181 so far this decade Town Rox is huge they’ve lost per year 987 last decade now they’re gaining about 3,000
Per year uh urban town Ro mix 6,300 up from 205 last decade and then look at that entirely Urban they’ve been losing 14,000 for out migration it’s a total flip from last decade um and that’s due to migration housing cost I think the all the Uproar around the George Floyd
Flo uh Floyd uh issue just all kind of exasperated and created this perfect storm of people leaving entirely urban areas so what does that mean for total population change and as you can see uh ta County although you were gaining 161 last decade you’re only gaining 148 but
Still that’s good don’t worry about that that’s essentially you’re staying even despite the fact that you’re losing more people to death than birth so that’s that’s good there’s nothing wrong with that entirely rural they cut their uh total population loss in half and then you get to that town R mix they were
2117 now they’re gaining about 2,000 population each year that urban town row mix about 6,400 compared to 3700 and then you could see the entire shift in the entirely urban areas where they used to be gain gaining 33,000 and now they’re losing about 2500 so far this
Decade per year so anyway a lot of data uh as you can see uh this is a population change since 2010 out of tail Colony right around that 2 to 5% more than you had in in 2010 that’s great you guys are doing a good work here okay now
Let’s start talking about that shift and I you know going through population change it’s always kind of like I don’t know it’s not that exciting unless you have a story behind it so let’s talk a little bit about the story so we’re first going to talk about resident
Recruitment retention how am I doing Sarah on time I just want to check I should take my phone out 20 minutes okay great yeah we’re flying right along I talk fast too so uh resident recruitment retention so this is kind of a newer thing Otter Tail
County I have to admit you guys have been kind of on the Leading Edge about it I’ve probably presented some variations of this presentation probably over 40 times so far this year because this is kind of what everybody’s talking about is how do we fill our labor force
This is one of the strategies resident Recruitment and Retention so I always use this is anybody familiar with greater MSP yeah some of you so it’s a pretty uh uh I would say well-resourced organization in the sount Metro uh that essentially all they do is promote and provide information about how great the
Sem County Metro is to live to raise a family to find work to have night life things like that that’s what this organization does it’s called greater MSP and I call it rural EnV because I think a lot of rural regions are kind of figuring out we want something like this
Too there are some people recruitment efforts in Minnesota occurring obviously you guys are uh one of the big ones this is an old outdated map so before uh your guys’ campaign got started um but I I didn’t throw this in here because I’m in ail County this is actually with me all
The time because the as far as I know and I haven’t looked back under This research in a while aail county is the only County in which they’re paying for a position to do this work uh the rural Reb bound coordinator as far as I know there’s no other County doing this and
It’s really spectacular and every time I bring it up other counties are now like hey we should get on board with this and we show them the website and stuff so good work on this because this is a big deal and this is kind of what everybody’s trying to figure out how to
Do and it’s not based on anything I want to say like that isn’t based in research this actually is a marketing campaign and an idea this whole resident recruitment retention around this idea that yes we lose our young people rural region do a lot of out migration to
Colleges and things like that but since the 1970s rural regions have had an immigration of 30 to 49 year olds OT taale County could probably extend that to 30 to 59 to 69 year olds because of your lakes and Recreation you guys have been set up really really well you have
A lot of assets but the idea behind Recruitment and Retention isn’t necessarily how do we keep our young people but how do we recruit the people that have just turned 30 or 35 or 40 and looking for a change a slower pace of life and those YP of ideas and it’s
Based on This research many of you have probably heard Ben Winchester at the University of Minnesota extension uh brain gain resident recruitment campaign that’s the research it’s based on and one of the interesting things and this goes back to why recruitment of jobs isn’t where it used to be in terms
Of priority is when they did focus groups and this is down on EDR 6w so Swift County laca Paro yellow medicine where population loss is is a pretty severe uh issue they did and they asked people they pulled them aside they hold focus groups and they said why did you
Move to this area top three reasons affordable housing small class sizes and then this overarching theme of quality of life and it usually contained things like um I wanted to I don’t know be be near the woods to be on my hunting land I wanted to have
Dinner around the table I wanted slower pace of life I wanted my kids to be able to bike around the block and just not have to worry about it so much uh and so that all went on into quality of life jobs uh interestingly wasn’t even in the
Top five reasons when they did the focus groups most of them either had a job that they were coming to it wasn’t that important um they were going to try and figure out when they got there unless you’re an immigrant Refugee population then it was a bigger deal but outside of
Those populations jobs wasn’t even the top five which is very uh surprising because traditional Economic Development used to say if we have jobs they will come and now we have the jobs and we’re still trying to figure out how to get them to come the other thing I would say is uh
One thing as rural regions we really struggle with is what’s the region that we should be talking about and I think it’s always important to look at it and I think it’s what you guys do so well as you’re talking about your entire County and your region people live regionally
They don’t live locally anymore um for many different reasons and factors but if you were so University of Mines extension always kind of does this quiz where they’re like put a dot where you live right and then put an X where you work and the X might be like 15 to 30 mi
From where you live or or on the dot right now right uh things have changed uh then draw a circle around where you shop and that Circle might be like a 45m radius and then you say draw a circle around where you play and that circle
Gets even bigger the idea is that we don’t have to have every single town in our counties and in our regions be the One-Stop shop for everything for their residents but we can do that as a region uh and that’s probably the most important thing is that we are not
Trying to be everything for everyone but how do we fit into this puzzle of how people live in our area and in our region I use this promoting and engaging this is get rural MN so this is down in that upper Minnesota Valley uh EDR 6w uh
That RDC in particular they just had a really nice graphic about what are we talking about when we’re talking about Resident Recruitment and Retention what types of pieces need to be compiled together and as you can see it’s a pretty desparate group of information we’re talking about housing employment
Opportunities things to do family Essentials like how do we get this into one spot so we can put it out there and promote it and not only like have it on a website but probably more importantly and it was a frustration that EDR 6w RDC
Brought up was that trying to get it to their businesses because they still had so many employers that were really trying to sell their job to someone but forgetting to sell the community and we are living at a point where potential employees are comparing communities and places to live not necessarily comparing
Against jobs and so as employers we really need to start thinking about how we work together with our communities and regions to promote this as an entire package rather than just as having a great job obviously it comes with its own challenges right so as anybody in ail
County Eric osberg and you guys can know you’re building a network from scratch because this stuff hasn’t been done before how do we bring all these people together who’s responsible for this the county in aale County said no we’re responsible for this along with tourism
So we’re going to take this on a lot of other people are trying to figure that out is this an RDC level is this a Workforce Development issue is this just tourism what does this look like and who takes control and who pays for it that’s
A big question that needs to be answered for a lot of areas negative narrative and perceptions this one is always funny to me because obviously we get it from both sides right I feel like we get it from Metro areas having negative perceptions about rural areas but damn
It if we don’t get it also from our local community members having negative perceptions about their communities drives me nuts uh but it is a thing and it’s something that needs to be conquered and then the diversity skill set required for these initiatives you’re asking somebody to be a
Journalist a video editor a recorder a promoter a marketing person uh they should know how to put pictures together and edit them right like that’s a pretty diverse skill set to have someone and I know there’s people out there that can do it but you’re looking for a a little
Bit of a needle in a hay stack I think to some extent so yeah that’s resident recruitment retention so now that we’re all doing that work right and I think otter taale Count’s kind of run into this in some other areas we’re seeing this in migration of people we’re seeing
Resident recruitment initiatives kind of take place there’s some interests in living rural and now we’re out of housing right so now we’re kind of up against this housing Crunch and I know that’s why you’re all here I don’t think I’m going to present you guys any new information
But hopefully package it in a way where you know kind of how it fits into the grand scheme of things as well as hoping you can take some of the talking points to local leaders legislators or whoever to help fund what you guys are up to for
Resources and I apologize I forgot to change a slide I presented this entire presentation in my County candy ohigh County I’m in New London and I’m literally trying to get them to like you should have Eric osberg come down just tell them what you do uh and so this
This this uh the slides from that presentation my apologies uh but one thing that we need to get clear and again I think this points to if you guys were to look at your population your your your population change right you’re like God we’re pretty stable why do we
Need so much housing if our population isn’t changing that quickly it’s because housing isn’t linked to population it’s linked to households and the size of households has changed so much in our rural areas that that’s the biggest piece right so I use this as an example
If we were to take all those entirely rural counties that I showed you and you look at their change in population since 1970 they’ve declined 21% in population but the number of households has increased by 9% that’s why housing is such a weird issue particularly in rural areas we
Started talking to legislators about this in 2017 2018 like hey there’s a housing shortage in rural areas and they’re like what how can you have a housing shortage and lose people like that makes no sense to us and so this is a key thing is to recognize and I use candy oh
High County here uh change of population since 1970 it’s increased by 43% but the number of households has doubled that at 83% I hope that makes sense yeah I you guys could start recruiting a whole lot of Catholics change your birth rates is that still a Catholic Ling they
Still don’t wear protection that pretty sure my my wife’s Irish Irish Catholic used to be well it’s still you never lose it the guilt goes on forever so one thing that’s really interesting about a housing cycle and about housing is um so a lot of folks
Are really focused on how do we build more Workforce housing there’s nothing wrong with that um but sometimes I think we get too stuck on the idea of having a direct solution to the problem we have to have housing for work for so let’s build Workforce housing um the only
Thing we would argue is that rural areas have a bit of a housing cycle issue as well we call I uh Ben call Ben Winchester who I took this from uh calls it churn um we kind of started calling it normal houseal life life cycle right
But if you were to kind of like draw a diagram and and you would say okay as people age your housing cycle you know in their 20s maybe they want single or multif family rent starter home something like that um so you build multif family rentals people in the 30s
They probably want to start getting the single family own right so then you build starter homes or single family housing I won’t go that way uh and then you leave those multi family rentals behind those people are getting older so they leave those empty for the next
Group of people and then you might upgrade in your 40s right you might downsizes in your 50s you’re talking about maybe assisted living in your 70s uh and so you’re building all these things for that and then you’re leaving those units behind for the next group of
People to fill that spot right that’s what we call like a really healthy uh uh housing life cycle in rural regions and I would argue that Otter Tail County this is one of the things you guys are trying to fight off is we seem to have single or multif family rent and then
Single family own and then maybe they go to assisted assisted living or you just pass away in your home right like that’s kind of all we have and when you have that you’re not building a lot of new units and you’re not leaving much behind
So on Roll areas we have a very high percentage of older households that are still living in single family housing which you don’t see as much in metropolitan areas so you’re just not seeing that churn and what we would argue is that those single family homes that are occupied by aging households um
Are probably your Workforce housing or at least a part of what Workforce housing should be because they are going to be more affordable they’re older maybe they need a little work right that kind of needs to be part of the conversation and part of the issue is
That you don’t have a lot of I call them assisted living but also a patio style one Lev housing that lot of Aging households might want to be in there isn’t a lot of that being developed in R Minnesota uh in New London where I live
Um we got a piece of land we gave it to a developer for a dollar to build those single level patio style homes and they were sold out immediately with a weight list of about 28 people they just went Bonkers and it opened up some of the
Housing in the area that was quickly gobbled up by younger families and people that were looking for housing to raise a family in and yeah I go so I was going to say we there’s also like we had a couple divorcees move into the single family or
The patio style home so it does work for that too if you have a lot of that in your comedy but um but yeah so keep an eye and think about that as being part of the solution uh for housing in general now why is inre increasing construction costs I know I could
Probably how many of you are contractors or Carpenters or builders in the room there yeah a few of you yeah so you guys know this well right so costum material land and prep is up labor ages is still one of the bigger deals I would argue as
Well as we still haven’t recovered uh from the Great Recession in 2008 uh we still have less carpentry and development construction businesses than we did in 2008 we still haven’t recovered from that and so the these companies are stretched thin and there’s a lot of competition you have a very
Competitive retail Market which is crazy to say in the day and age of Amazon but the retail Market continues to take up a lot of development in construction business so places like Fargo Morehead and things like that they’re building retail they can make good money building that those little retail shops then they
Can building that patio style home that’s where the profits going to be so it’s a lot harder uh and then just a number and complexity of building codes it’s always going to be issue you hear about this a lot when you get to the border states particularly around South
Dakota and Iowa where people are much rather going to build in South cor Iowa just because there are a lot more lot less uh codes and restrictions which has kind of got to be a continued conversation with the State Legislature so impacts uh on housing in
Grer Minnesota and I’m going to show you some really outdated slides uh just because it’s changed so much but no market for starter homes uh that should say no Market uh it’s rather um uh what do you want to call it it’s just it doesn’t cash flow right uh risky
Rental market data and mortgage problems for dilapitated housing these are kind of like the gaps in a normal Marketplace that need are that I feel like OT colony and other people are trying to figure out how to fill so this first one no market for starter homes and this is
What I mean by uh being really outdated I made this in 2017 and I was like well starter home construction’s probably around there right and that’s probably not true at all what is it now 240 D good Lord yeah so yeah that’s happening uh so that’s really high and then the
Appraised value of the starter home after you’re done is probably going to be less than that the home affordability for a new labor force isn’t anywhere near that and so the whole Market just kind of just falls apart it just doesn’t work without something to kind of keep
It propped up and to help fill that Gap again these are uncomfortable conversations because we’re asking for uh uh private and nonprofit partnership and government partnership that isn’t a partnership that’s always been um uh uh very robust uh so this is a rescue rental market one and I think it’s one
That could further again this is probably should be like what 1,200 to, 1500 per month now to make uh rent multif Family Housing Development work is this is what’s required for monthly rent in a unit this is what the median rent according to the ACs in R Minnesota
Were and there was a big gap there and a lot of times when you’re talking about development you know they’re coming up they’re like oh what’s rental here I said they pull up the data and be like oh my God that’s nowhere near where we
Need it to be I’m not building here I would argue one thing that needs to be done is there’s just been an ongoing culture of low rent in rural areas it’s not necessarily that they couldn’t afford to pay more rent it’s just that they kind of refuse to right why would
You when you at times could buy a house for $100,000 and have a mortgage payment less than your rent right but that’s not the case anymore and I think um a lot of rural regions are starting to recognize that we can charge ,000 a month and kind
Of the the teachers and nurses that were trying to recruit in these areas that are looking for maybe temporary housing for a year or two can afford that um it’s not awesome but that’s just the way it has to be so that’s something I would challenge rural areas on is just make a
Go of it and I think there’s people there that can afford to pay a little bit more and then there’s always a dilapitated housing uh issue too where you might have some dilapitated housing and Ral areas somebody wants to buy that house build it up but to get that loan
To work again you’re going to have an appraised value of the home after Renovations that’s less than what it took to purchase and renovate that house and again there’s a gap in the mortgage and the loan fails so that’s kind of the big things and I did include changing the story for
High schoolers because I know you guys have some workshops talking about how do we increase the labor force in construction uh and this is something I’m just really excited about and very passionate about is how we start figuring out how to get our high school students engaged and involved in our
Labor force that’s local now keep in mind how many minutes do I have Sarah am I doing okay okay five minutes here we go we’re going to fix high schoolers uh so keep in mind that I hate using this word The Brain Drain right but we all
Know what it is and we all know what a references our best and brightest leave our rural regions it’s like why I stay in a rural region I consider myself bright and best but what the issue is is that that used to be during a time when
We encouraged our young people to maybe leave our rural regions because we thought they could find better pay more opportunities in a place that wasn’t local right like that’s what it was based on particularly in the Rust Belt and and southeast United States where that is an issue in Minnesota not as
Much depending on where you are but it was still an issue we told our kids yeah take off our education system was kind of built on this idea of getting them prep for college to take off somewhere and do something but that’s no longer the case the whole entire labor force
And career opportunities has completely flipped and our rural regions now have tons of opportunities for our kids but we still have an education system that values getting them to leave that still kind of has this pipeline leading them out of our rural regions it’s starting to change and it’s exciting to see it
Change and I’m I’m really happy to to to see it two things I want to say in in your Workshop you guys will hear this is that it’s going to take a full Pro full court press to get our students to change their perceptions about what their opportunities are in their rural
Region and when we look at academic literature there’s two types of influences right so there’s relationships that they have and the observations that they’re making duh right like that makes sense but we really need to realize like how broad that is so the relationships uh you obviously have immediate family that’s a
Big one how are we talking to our kids and the PE the children that we know about the opportunities and what it’s like to live here are we just constantly complaining about it or are we saying hey man I love living here I I hope you
Could see you should come to my job with me or whatever right like we should be doing things like that but then I would argue there’s formal advisers in college admissions anybody here a formal adviser of College admission person or right okay good so I would argue College
Admissions are salese they’re there to sell and one good sales pitch that’s worked really really well since the 1970s and tell is telling the kids and particular first generation College College Bound students and their parents that if they want their kids to succeed and not be poor and have the best
Opportunities they need to get the heck out of this area that has worked really really well the other one is formal advisers so I know down in southwest Minnesota I was talking to somebody and they like oh yeah we had a high school adviser who graduated from South Dakota
State University Brookings and once you know it that’s all she pushed was everybody to go to Brooking South Dakota and nowhere in southwest Minnesota right because they were in Alum there and they loved it there and well they did severe damage to their region by letting this
Person do that not be an objective person that was proud of where they lived and worked rather than where they graduated from that’s a big deal that hurts it sucks then we have observations right so how are we tell them about career opportunities and what are we doing in
Our communities I would argue that for a long time we haven’t talked to our kids about being valued members of our communities we just kind of expected them to leave hey we got you for 18 years and I hope you make it right and we’ll see you later now it’s like hey
You know we would love to have you and hey have you ever thought about running for city council or you know whatever just just get them involved in some of the decisions being made we’re not doing a great job at that so retention engaging youth it’s
Going to take a whole lot of things when we first started doing this research a lot of folks were like well we had a regional job fair right and that’s great you should have a regional job fair and I guarantee you those kids for those 24 hours were really excited and they’re
Like man there’s a lot of cool stuff here and then they went home and talked to their parents and their friends and advisers and got influenced in a different way right because there’s just all of this energy and resources pumped behind a different message uh and so
It’s going to take a whole lot of stuff to get our kids uh uh to move in a different direction because we’re working against 30 to 40 Years of migration trends that are pretty set in stone but it’s working and I think we’re seeing good results from it and I just
Encourage you to keep it up here’s some of the cool stuff that’s been happening you could talk to me afterwards I’m going to wrap up here one last thing though as I got to talk about build Dakota you probably saw the news North Dakota North Dakota State University anybody see it was
Yesterday yeah they’re matching Minnesota so if you go to NDSU and you’re a Minnesota resident they’ll pay your tuition fees to match up with the Northstar promise of Minnesota which they pass to wave tuition fees if you’re $80,000 or less in your home income and this is all competing against Bill
Dakota out of South Dakota which is allowing students from any state to come into South Dakota go to a 2-year College there and then work there for 3 years in South Dakota in an occupation considered in demand and they’ll wave your tuition in books and they’re actually sending
Postcards to people in South Minnesota come live in South Dakota and they have a picture of Christy No with a welding mask on stuff and $775,000 no taxes Land of the Free right and it’s and it’s a really it’s a really clever and competitive marketing campaign I would
Argue like good for them they know what’s up right we are behind on this why we’re not doing stuff like this drives me nuts and we have the infrastructure we have great two-year colleges we have philanthropy up the wazo for in Minnesota to do this kind of stuff there should be nothing stopping
Us from doing it the Northstar promise I think was a step in the absolute right direction um but the one thing and I encourage anybody talking to your legislature it should have a work requirement on it right now any student that gets his scholarship doesn’t have to work in Minnesota after they graduate
And I find that to be a really bad idea particularly for places like Morehead uh in Marshall where they’re going to go to college for free and can likely then just go to Fargo or sou Falls or Brookings to work and that’s not what we want in Minnesota so with that I have
Child care that’s a big deal just so you know uh I think that’s it yeah I’ll stand for questions yeah are your slides available I’ll send it to Sarah Sarah’s on our our board our Exe on our board of directors at Center for real policy development so
Talk to her I’ll get it to her well thanks a lot everybody I really appreciate it have a great day and keep up the good work here [Applause]