Polaris tackles housing crunch: Company buys Karlstad property where workers will live
Karlstad, Minn. - Polaris Industries is buying a former group home in this Kittson County town about 45 miles away from its factory in Roseau.
The snowmobile and all-terrain-vehicle maker needed to find homes for its workers, who must cope with a tight housing market throughout northwest Minnesota.
“Polaris is taking a real active role in alleviating the housing shortage,” said Lee Meier, executive director of the Northwest Minnesota Multi-County Housing and Redevelopment Authority, based in Mentor.
The Karlstad building that Polaris wants to buy is a 10-bedroom home owned by the Karlstad Economic Development Authority. It has been vacant since April, when the local group home moved into a new building in town, according to Sue Dufault, city clerk-treasurer.
The city advertised for potential buyers and wrote two major industries in the region asking if they might be interested.
“Polaris was the only one that submitted a proposal,” Dufault said. “For them, it was like an answer to their prayers.”
Under the purchase agreement, Polaris will lease the property for $10,000 a month, with an option to buy next April. Three-quarters of the lease payment will go toward the $182,000 purchase price, according to Dufault.
Including some repairs and remodeling that Polaris will contribute, the total transaction will amount to about $273,000. A recent appraisal listed the market value at about $160,000.
While the agreement is subject to a public hearing today, Dufault said she expects it to be a formality.
She said she wishes Karlstad, with a population of about 750, had more housing available to attract new residents. “The housing situation is terrible in Karlstad and the whole area.”
A Minnesota State Demographic Center housing report from 2013 indicated that several northwest Minnesota counties either had a housing shortage or will within the next six or seven years.
To alleviate the shortage by 2020, counties need to increase their housing supply by the following percentages:
- Roseau County, which includes Roseau, Warroad and Greenbush: 11.4 percent.
- Lake of the Woods County: 12.7 percent.
- Pennington County, home of Thief River Falls: 9 percent.
- Polk County, with Crookston and East Grand Forks: 6.1 percent.
- Marshall County: 5.6 percent.
- Norman County: 3 percent.
A separate study, conducted by the city of Roseau in 2012, indicated that roughly 60 percent of applicants at Polaris, in the three-month period of the study, lived outside the county.
Digi-Key, a Thief River Falls electronic-component distributor with more than 2,600 employees, indicated earlier this year that more than 1,100 of those employees commuted from other communities, including more than 100 making round-trips of longer than 120 miles.
But cities in the region have been making progress over the past year in addressing the housing situation.
In Roseau, a 40-unit apartment complex, Tamarack Place, is under construction.
In Thief River Falls, officials expect 84 new apartment units to be built this year. Seventy-five new apartment units were built over the previous five years.
In Crookston, the Crookston Housing and Economic Development Authority financed a $12,000 housing study this year to come up with ways to deal with the housing shortage there.
Meier said apartment construction is a challenge in small- and medium-size cities in the Red River Valley.
“I think they’ve done a good job, looking at all the different avenues,” Meier said. “They’re always looking for private developers to come in and build; but to do that, there’s got to be some incentive, so they can cash flow.
“Multi-family housing is expensive. You have to find developers who believe they can get a return. They can charge larger rents and get a bigger return in bigger cities.”
The Minnesota Legislature has recognized the problem, Meier said. This year, it allocated $2 million in housing grants for Pennington and Roseau counties over the next couple of years.