PAGE: LOCAL NEWS
Housing study pits researchers vs. developers
By Justin R. Lessman (December 31, 2009)
A new regional housing study takes aim at the Ashley Estates apartment complex currently being constructed near downtown Jackson, criticizing its rental rates and saying it doesn’t do enough to address the need for low-income housing in Jackson.
However, developers and city officials say a need exists for the type of higher-end housing Ashley Estates will provide, adding the introduction of the units into the local marketplace will not only help retain residents, but draw new ones to town.
The study, titled “Southwest Minnesota Comprehensive Housing Study,” is an analysis of the overall housing needs for the cities of Jackson, Pipestone, Redwood Falls and Worthington. Commissioned by the Southwest Minnesota Housing Partnership and conducted by Community Partners Research of Faribault, the study uses demographic data and analyses of current housing stocks and inventories to determine gaps or unmet housing needs, predict future housing trends and provide a market analysis for housing development. Results and findings of the study were recently presented to the Jackson Economic Development Authority.
While researchers generally found Jackson’s single-family housing inventory and potential to be sufficient, they took issue with the city’s rental situation. Projecting a steady increase in the number of households over the next five years, researchers estimated a need for the construction of 50 to 60 new rental units in Jackson by the year 2014 — about 30 general occupancy units, a dozen subsidized or tax-credit units and around 15 student housing units.
Researchers acknowledged the Ashley Estates apartment complex taking shape on riverfront land near downtown Jackson will add two-dozen general occupancy units to the mix, but said the project does not do enough to address the need for low-income housing.
Or even moderate-income housing, for that matter.
“…The proposed rent structure for Ashley Estates is significantly higher than the current rent structure for any other market rate projects in Jackson,” the study states, adding, “…Ashley Estates will have rents that are at the highest level in the community.”
The thrice-delayed apartment complex will feature a mix of one-, two- and three-bedroom units, according to developer Harold Jesh, some of which will have one bathroom while others have two. The one-bedroom apartments will rent for between $690 and $725 per month, the two-bedroom apartments for between $790 and $875 per month and the three-bedroom apartments for $945 per month.
On Monday, neither Jesh nor Jackson’s economic development coordinator, Sue Pirsig, refuted the study’s assessment of rental rates, though both said researchers missed the original intent of the project.
“There are a number of young professionals who work in Jackson but choose to live elsewhere for lack of higher-end housing,” Pirsig said, using AGCO Corp.-Jackson Operations as an example.
Local studies have shown the majority — some estimates say 60 percent — of AGCO employees do not live in Jackson, with many choosing the Iowa Great Lakes area as an alternative.
“The reality is that a number of young professionals who are employed in Jackson are moving to Spirit Lake,” Pirsig said. “Ashley Estates is a calculated risk on the part of the developers to capture those people and keep them here in Jackson.”
Success in doing that would bode well for Jackson’s business community and local government entities, Pirsig said.
“This is a look into the future,” she said. “The need for this type of higher-end housing was realized as a missing link years ago.”
At least as far back as 2005, Jesh said.
“At that time, and still today, local officials are excited about retaining some of those people being lost to other cities like Spirit Lake,” he said.
Another target demographic is senior-aged snowbirds, Jesh said.
“This type of housing will allow those who like to travel south for the winter, but live in Jackson during the warmer months, to sell their homes and have Ashley Estates as a housing option,” he said, adding a number of seniors have already committed to such an arrangement.
Each apartment in Ashley Estates will be air conditioned and furnished with new appliances, and the apartment complex will have an elevator. A 12-stall garage unit will also be built on site initially, Jesh said, with the possibility to add more at a later date.
Despite the planned amenities, researchers predicted that once completed, the apartments at Ashley Estates will rent slowly.
“…It should be noted that the introduction of 24 new units at one time could result in some short-term market saturation,” the study stated, adding “…Ashley Estates may have a long absorption period.”
Pirsig and Jesh said that is yet to be seen.
“I know for a fact that AGCO has already spoken for some of the units,” Pirsig said.
Added Jesh: “There are people already on the list to get in.”
Researchers did attempt to soften their criticism of Ashley Estates by saying they were “supportive of this project,” terming the planned apartments “high-quality rental units.”
They also said the existence of Ashley Estates could lead to more availability of already-existing lower-priced rental options — a notion with which Jesh agreed.
“Although Ashley Estates will have rents that are at the highest level in the community, we would expect that this project will have an impact on opening up less expensive options in the community,” the study stated. “… This project will probably attract a large share of tenants from existing housing options in the city. As some tenants choose to upgrade their housing, they will vacate older, less expensive housing options, which can then be filled by students and moderate-income renters that are looking for a more affordable option.”
But even with this, researchers said, the city still needs to add four to eight additional units over the next five years.
“We would primarily recommend the construction of two- to three-bedroom units with a rent structure more moderate than the Ashley Estates rent structure to accommodate moderate-income households,” they said.
In addition to their concern with Ashley Estate’s rental rates, researchers also expressed unease with Jackson’s current lack of low-income housing.
“Based on our experience in other communities,” they wrote, “we would normally expect to see between 22 and 30 tax-credit units in a city the size of Jackson.”
They found only 12.
“We recommend the development of 12 to 14 subsidized/tax-credit units over the next five years,” the study continued. “We recommend that the majority of the new units are two-bedroom units and rents are as affordable as possible, preferably affordable for households with incomes below 50 percent of area income.”
Student housing was also a concern, with researchers suggesting the development of 12 to 16 student housing units in the city of Jackson within the next half-decade.
“Students represent a relatively steady annual demand for rental housing, and have greatly contributed to the high rate of occupancy in most multifamily projects,” the study stated. “A small student housing project will provide a new housing option for students, open up affordable units for low/moderate-income households and can be absorbed into the market without having a detrimental impact on existing rental projects. A successful student housing project will require affordable rents that are competitive in the Jackson market. … If the student housing project is successful, additional phases should be considered.”
The one area of rental-unit housing researchers saw as adequate for Jackson was senior housing with services, citing The Pines as a “flexible option for seniors” and pointing out the demand for such housing is not expected to increase over the next five years.
Click here to read the overview of the multi-county housing study.
Click here to read the housing study's Jackson analysis.
However, developers and city officials say a need exists for the type of higher-end housing Ashley Estates will provide, adding the introduction of the units into the local marketplace will not only help retain residents, but draw new ones to town.
The study, titled “Southwest Minnesota Comprehensive Housing Study,” is an analysis of the overall housing needs for the cities of Jackson, Pipestone, Redwood Falls and Worthington. Commissioned by the Southwest Minnesota Housing Partnership and conducted by Community Partners Research of Faribault, the study uses demographic data and analyses of current housing stocks and inventories to determine gaps or unmet housing needs, predict future housing trends and provide a market analysis for housing development. Results and findings of the study were recently presented to the Jackson Economic Development Authority.
While researchers generally found Jackson’s single-family housing inventory and potential to be sufficient, they took issue with the city’s rental situation. Projecting a steady increase in the number of households over the next five years, researchers estimated a need for the construction of 50 to 60 new rental units in Jackson by the year 2014 — about 30 general occupancy units, a dozen subsidized or tax-credit units and around 15 student housing units.
Researchers acknowledged the Ashley Estates apartment complex taking shape on riverfront land near downtown Jackson will add two-dozen general occupancy units to the mix, but said the project does not do enough to address the need for low-income housing.
Or even moderate-income housing, for that matter.
“…The proposed rent structure for Ashley Estates is significantly higher than the current rent structure for any other market rate projects in Jackson,” the study states, adding, “…Ashley Estates will have rents that are at the highest level in the community.”
The thrice-delayed apartment complex will feature a mix of one-, two- and three-bedroom units, according to developer Harold Jesh, some of which will have one bathroom while others have two. The one-bedroom apartments will rent for between $690 and $725 per month, the two-bedroom apartments for between $790 and $875 per month and the three-bedroom apartments for $945 per month.
On Monday, neither Jesh nor Jackson’s economic development coordinator, Sue Pirsig, refuted the study’s assessment of rental rates, though both said researchers missed the original intent of the project.
“There are a number of young professionals who work in Jackson but choose to live elsewhere for lack of higher-end housing,” Pirsig said, using AGCO Corp.-Jackson Operations as an example.
Local studies have shown the majority — some estimates say 60 percent — of AGCO employees do not live in Jackson, with many choosing the Iowa Great Lakes area as an alternative.
“The reality is that a number of young professionals who are employed in Jackson are moving to Spirit Lake,” Pirsig said. “Ashley Estates is a calculated risk on the part of the developers to capture those people and keep them here in Jackson.”
Success in doing that would bode well for Jackson’s business community and local government entities, Pirsig said.
“This is a look into the future,” she said. “The need for this type of higher-end housing was realized as a missing link years ago.”
At least as far back as 2005, Jesh said.
“At that time, and still today, local officials are excited about retaining some of those people being lost to other cities like Spirit Lake,” he said.
Another target demographic is senior-aged snowbirds, Jesh said.
“This type of housing will allow those who like to travel south for the winter, but live in Jackson during the warmer months, to sell their homes and have Ashley Estates as a housing option,” he said, adding a number of seniors have already committed to such an arrangement.
Each apartment in Ashley Estates will be air conditioned and furnished with new appliances, and the apartment complex will have an elevator. A 12-stall garage unit will also be built on site initially, Jesh said, with the possibility to add more at a later date.
Despite the planned amenities, researchers predicted that once completed, the apartments at Ashley Estates will rent slowly.
“…It should be noted that the introduction of 24 new units at one time could result in some short-term market saturation,” the study stated, adding “…Ashley Estates may have a long absorption period.”
Pirsig and Jesh said that is yet to be seen.
“I know for a fact that AGCO has already spoken for some of the units,” Pirsig said.
Added Jesh: “There are people already on the list to get in.”
Researchers did attempt to soften their criticism of Ashley Estates by saying they were “supportive of this project,” terming the planned apartments “high-quality rental units.”
They also said the existence of Ashley Estates could lead to more availability of already-existing lower-priced rental options — a notion with which Jesh agreed.
“Although Ashley Estates will have rents that are at the highest level in the community, we would expect that this project will have an impact on opening up less expensive options in the community,” the study stated. “… This project will probably attract a large share of tenants from existing housing options in the city. As some tenants choose to upgrade their housing, they will vacate older, less expensive housing options, which can then be filled by students and moderate-income renters that are looking for a more affordable option.”
But even with this, researchers said, the city still needs to add four to eight additional units over the next five years.
“We would primarily recommend the construction of two- to three-bedroom units with a rent structure more moderate than the Ashley Estates rent structure to accommodate moderate-income households,” they said.
In addition to their concern with Ashley Estate’s rental rates, researchers also expressed unease with Jackson’s current lack of low-income housing.
“Based on our experience in other communities,” they wrote, “we would normally expect to see between 22 and 30 tax-credit units in a city the size of Jackson.”
They found only 12.
“We recommend the development of 12 to 14 subsidized/tax-credit units over the next five years,” the study continued. “We recommend that the majority of the new units are two-bedroom units and rents are as affordable as possible, preferably affordable for households with incomes below 50 percent of area income.”
Student housing was also a concern, with researchers suggesting the development of 12 to 16 student housing units in the city of Jackson within the next half-decade.
“Students represent a relatively steady annual demand for rental housing, and have greatly contributed to the high rate of occupancy in most multifamily projects,” the study stated. “A small student housing project will provide a new housing option for students, open up affordable units for low/moderate-income households and can be absorbed into the market without having a detrimental impact on existing rental projects. A successful student housing project will require affordable rents that are competitive in the Jackson market. … If the student housing project is successful, additional phases should be considered.”
The one area of rental-unit housing researchers saw as adequate for Jackson was senior housing with services, citing The Pines as a “flexible option for seniors” and pointing out the demand for such housing is not expected to increase over the next five years.
Click here to read the overview of the multi-county housing study.
Click here to read the housing study's Jackson analysis.