The Housing Issue
Posted by Lake Superior Community Partnership on May 21, 2021
While housing may not be the first thing to come to mind when talking about business, it’s difficult these days to separate economic development needs from housing.
A recent CUPPAD study outlines some of the housing issues in Marquette County, where housing costs are rising more quickly than incomes and many household types, at a range of incomes, are facing affordability challenges. Demand for different types and prices of housing is high – but it’s getting harder and harder to find housing.
This isn’t just a problem for people looking for homes – it’s a problem for our economy and workforce. When people can’t find the housing they need, it’s more difficult to attract and retain workers, and businesses struggle to find enough employees. Families may need to move farther away from work and school, resulting in longer commutes, higher transportation costs, and added traffic – or they may leave the community altogether.
That’s why housing has been a top concern for business and community leaders in Marquette County, who have been exploring ways to ensure that different types of housing are available at a range of price points.
As we look to solutions, it’s important to first understand what the problem is. Simply put, there’s a housing shortage. But why? Long-term trends have driven a supply-and-demand mismatch that has been exacerbated by the pandemic.
For years after the Great Recession, multi-family housing development slowed dramatically, and single-family home construction never fully caught up. At the same time, high development costs priced many parts of the workforce out of the real estate market, while labor scarcity and financing issues further constrained new construction. Additionally, local policies or community opposition to new housing often limit housing development, especially for the smaller housing types needed by the growing numbers of seniors and young adults starting their own households.
Because of these development limitations, by 2019, new home starts were already well below a 50-year average – despite increasing demand coming from big demographic trends. Even in communities that aren’t growing, shrinking household sizes mean there are fewer people in each home – so we need more homes for even the same number of people.
Then…the pandemic hit. Demand for homes rose even higher as mortgage interest rates fell; families began looking for homes with more space; and remote workers looked to move to new communities or homes. As a result, home prices are rising in markets across the country, and real estate sales have become fiercely competitive. Meanwhile, skyrocketing materials costs have pushed new home prices up by $34,000, on average; supply chain issues can slow down construction timelines; and labor remains scarce, making new construction more expensive and time-consuming.
There’s a lot to contend with here, and the complexity of the housing shortage means that there aren’t any “silver bullet” solutions. But, there are local tools we can use to create more housing opportunities, and local leaders have been actively working towards solutions. The City of Marquette will soon be making recommendations on City policies that could impact housing opportunities, while Marquette County is acting as an important partner through its land bank authority and other housing programs. And there’s a statewide, bipartisan push for policies that will result in new tools and funding for housing programs, which could be further leveraged with incoming federal funds.
Last month, the LSCP hosted a panel discussion on these local and regional efforts, available on marquette.org/housingtrends/. As the community takes steps to address the county’s housing shortage and opportunities for solutions, the LSCP looks forward to supporting those efforts and working with its partners to find solutions.
Sarah Lucas, CEO, writes a bi-weekly column for the Mining Journal.