Kossuth County Needs More Housing.

We’ve got a plan for that…

Kossuth County (population: 14,908) has good jobs with good companies making good wages. Why, then, are people not moving here to work?

The short answer: lack of housing and amenities.

Young people looking to move for work don’t think they’re going to stay for very long. They want a nice, modern apartment rather than a mortgage. They want places to meet people and socialize.

Essentially, the lack-of-workers problem is actually a lack-of-housing problem. Outlined here are direct action steps to remedy this problem in Kossuth county.

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You Probably Already Know: Rural America has a housing shortage

Our goal is to find a sustainable way to create more housing options in Kossuth County. Over the past 3 months we interviewed 10+ employers in the county to determine what their needs were, and how we can address them. Universally, the findings in the interviews were consistent with concerns we have uncovered around the country. All of these companies plan to grow their workforce over the next 2-3 years, but only if the talent is here to hire. And that talent needs somewhere to live. This plan will help solve this issue.

So, how do we entice people to Kossuth County?

For the past 30 years rural areas have seen a dramatic loss of population as their residents have moved into urban areas. Iowa is not alone; this same trend has transpired in nearly every state in the nation. However, what we have seen over the past 20 years are urban areas on the coasts, now over-saturated, shipping those from rural areas back to where they came from. Sort of.

Those who moved to New York, Chicago and San Francisco have largely taken up residence in the second cities, namely Minneapolis, Denver, Phoenix, Nashville, Austin, Seattle and Portland. This past decade has seen those cities become over-saturated, which has given way to Kansas City, Charlotte, Boise, Memphis, Birmingham and yes, even Des Moines. Now comes the true test, if we follow this pattern and in 10 years (or less) places like Des Moines are over-saturated, where will the next generation head? I believe it is rural America, and specifically, rural Iowa. But only if we change our game.

Recent national articles are right to point out that a major motivator to encourage people to move to a community is a good job with a good wage. However, we are ignoring the underlying problem before we can even talk about high wages and benefits – if a person does not want to live in that town, it really does not matter what amount of money you are offering to pay. This is specific to the elusive millennials that every community and company are chasing. Jobs and salaries are important, but they are far from the first or second thing this generation is looking for.

Rural Iowa does not have a job shortage, it has a people shortage. This is no more evident than in Kossuth County. We need people to take the often high paying jobs in manufacturing, agriculture, pharmaceuticals, bioscience and new technology that are offered daily. So, if these jobs pay so well why is there not healthy competition for these positions? The answer is simple – communities are not offering the amenities and lifestyle that these job seekers are pursuing.

Housing. Amenities. These are the pieces of the puzzle not discussed as major issues when we talk about how to re-populate rural. When we are looking to attract a single, 25-year-old to a rural community, that person may not be thinking she is going to live there for the rest of her life. She is likely thinking she will take a good job for a few years and keep her options open to move to a larger market.

Therefore she is not interested in a 30-year mortgage, assuming there is a single-family home to buy. She wants a modern rental unit, and those are hard to come by in rural Iowa. Pair that with a lack of amenities to offer social interaction and a dearth of peers and you’ve got the recipe for help wanted signs. You may offer her a six-figure salary, but she will likely take a lower paying job in a larger market with a higher cost of living regardless. We need to bring her to Algona for a few years to test it out, to see how great a community it is, and then decide to stay.

We interviewed employers. Here’s what they had to say…

Interviews with 10+ employers in the county all pointed to the same concerns: they have recruitment and retention concerns surrounding lack of adequate housing and local amenities.

  • Workforce is commuting far distances
  • Workforce would live closer if there were adequate options
  • County is missing middle-range single-family housing options
  • County is missing market-rate, modern apartments in/near downtown
  • Trouble attracting millennials or workforce in their 20’s
  • Trouble retaining millennials due to lack of amenities
  • Once families move here, they tend to stay
  • County, especially Algona, offers excellent quality of life amenities for families
  • School system is strong
  • Lots of opportunity to pioneer
Talent Retention Infographic

If Demand is There – Why No Housing?

The simple answer to this problem is that the cost to build does not equal the cost to sell or rent. When you add that up with the fact that it is easier and more economical to build in urban metros and a developer will normally need to pull in subs from metro areas because the trades have left rural, we’ve got a recipe for a housing shortage. However, good paying jobs exist in Kossuth County. Quality of life is strong for families. We can build upon this to lure in developers, but we need to incentivize them.

Our interviews with employers suggest that all polled companies are willing to contribute to a fund to bring developers to Kossuth County. The fund will need to specifically address the needs of the companies, so criteria needs to be created. The resources provided by the private sector will need to be matched in some manner by public entities.

Lastly, we will hope to create universal criteria for how the fund is created and what it can be used for, though we may need to look at specific options for specifics companies. I do believe this can be avoided, though, as nearly all companies polled had identical concerns.

One of those concerns went beyond housing, and directly to a lack of amenities in the county. Each employer interviewed expressed an interest in the fund being used to help create new and/or support existing quality of life amenities. These concepts will be used to attract and retain talent, with a specific focus on a younger workforce.

Introducing The Solution: The Kossuth County Revolving Loan Fund

A revolving loan fund is an ideal program to help address the housing and quality of life concerns. The goal for the fund is for it to be phased out over a number of years due to its success, thereby no longer needing this incentive program. In order to be attractive, we are recommending the fund be in place for 7 years.

The fund will pull resources from three partners, ideally as a match:

  • Private corporate community – 1st party in
  • Public City/County – 2nd party in
  • Public State – 3rd party in

In order to create new, in-fill lot housing, developers are short an average of $25,000 per housing unit. This number can drop if the land is donated and/or owned by the municipality.

The average shortage for new lot development without utilities is $60,000. Again, this number can drop if the land can be purchased below market value.

Based on our research, we are recommending that the county begin with 75 new units needed to come online over the first three years of the fund.

These units should be split between the following housing categories:

  • Single Family Units – 35
  • Renovated Upper Floors on and Surrounding State St. Rental Units – 20
  • New Rental Units – 20

Therefore, the Fund should be created with $3.1M

  • $1.0 million: 40 infill units that need $25,000 to close gap
  • $2.1 million: 35 non-infill units that need $60,000 to close gap

But How Does it actually work?

The fund is meant to be a revolving loan fund, meaning that it will perpetually put dollars back into the fund as it grows. The fund is also meant to sunset after a period of time, ideally the market has met the demand due to the success of the fund over a number of years. For this fund we are recommending a sunset in 7 years, with a realignment of funding every 2-3 years.

  • Developer meets pre-determined criteria for eligibility for the fund
  • Developer asks for gap financing through the application process
  • 60% of dollars loaned to Developer are at a 1% interest rate over 10 years
  • 40% of dollars loaned to Developer are forgivable over 10 years, meaning the Developer has to stay with the project for 10 years. Should Developer sell prior, these funds will need to be repaid in full at 1% interest
  • Developer has 6 months to begin/break ground on their plan once the dollars are granted

The Action Steps


County Supervisors, led by Maureen Elbert


Quarter 3 and 4, 2018


Maureen Elbert, Curt Wiseman, John Bilstein and 2 or 3 C-level leaders from one of the company’s interviewed need to present this plan to the supervisors and ask them to formally adopt it. The county can put a condition that Kossuth County need only pledge their share and commit if, and only if, the private sector and State commit us well


Maureen Elbert, Curt Wiseman, John Bilstein, Jacob Tjaden and others


Quarter 1, 2019


We recommend working with Steve Gilbert of Midwest Sustainable Homes. Steve has a great track record with this work and he is already in discussions with the county. If Steve does not work out, refer to the list of other identified Housing 360 developers


Maureen Elbert, Curt Wiseman, John Bilstein, Jacob Tjaden, Developer and at least 1 County Supervisor


Quarter 1, 2019


The corporate community should already be aware of this plan. When you meet, make them aware that the County has pledged but only if the companies will. Ask each company for an equal amount, spread out over 5 years. If working with Steve Gilbert, employ his kiosks that can be put into work areas to explain to employees how they can take advantage of the program. This is another reason we recommend Midwest Sustainable for this work


Maureen Elbert, Curt Wiseman, John Bilstein, Jacob Tjaden, Developer and at least 1 County Supervisor


Quarter 1, 2019


Make Lt. Gov. Gregg aware of this plan and ask that he assist you in setting up meetings. Last step in this process, same course that you took with Step 3. Meet with Carolann Jensen at Iowa Finance Authority and then separately with Debi Durham at IEDA. Ask them to commit at the same level as County
and Private


Maureen Elbert, Curt Wiseman, John Bilstein, Jacob Tjaden


Quarter 2, 2019


Create entity (either at County level or Utilities or Community Foundation or otherwise) to oversee and administer the fund. Create big public rollout in the media of the program. Let Developer begin work

So what are you waiting for? Let’s get started!

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