WW-07565     2000  

Small Town Housing Policies in Minnesota

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ANN C. ZIEBARTH AND EUNJU HWANG

Successful economic development frequently results in increased housing demand. While economic growth is desired, the push to build more housing-especially affordable housing-is often perceived as a threat to the small town rural character of many communities. As a result, local officials turn to land use ordinances, zoning regulations, and the enforcement of building codes and housing maintenance standards to manage the type of development that occurs. This study looks at the need for additional affordable housing and the degree to which local policies regulate land use, facilitate housing development and provide ongoing housing assistance for residents.

Dr. Ann C. Ziebarth is Associate Professor of Housing Studies, University of Minnesota, Department of Design, Housing and Apparel.

Eunju Hwang is a Research Assistant in the same department.

Introduction

Housing concerns are becoming increasingly important issues for small communities across the state. As communities succeed in promoting economic development, they create new employment opportunities and attract new residents. Population growth puts pressure on the local housing stock, which typically increases the demand for new housing development. Developing housing that is affordable for new workers, especially those in lower-wage positions, can result in substantial change to the look and social characteristics of a small, rural community. As a result, many communities face conflicting desires; on the one hand, they'd like to encourage economic development and population growth, while on the other hand, still maintain their rural character.

Traditional Small Towns

The desire to preserve a small town's rural character is based on an ideal image that includes a vibrant main street with shops and meeting places, well-kept single-family homes on tree-lined streets, and community amenities such as parks, libraries, and recreational facilities. Housing is at the focal point of this image. The rural character of small towns is centered on fulfillment of the American dream: owning a single-family house on its own lot, in a neighborhood of similar owner-occupied houses (Morris and Winter, 1995). The desire to maintain this ideal image is what guides the development and implementation of local housing policy. Housing ordinances and regulations deal mainly with detached, single-family, owner-occupied homes. The effort to maintain rural character frequently results in policies that restrict mobile homes, require large lot sizes, and limit the development of multifamily rental housing. Such policies may succeed in creating a desired community appearance; however, they may also have the unintended consequence of limiting economic development by inhibiting the ability to attract sufficient workers and meet growing economic development demands.

While general perceptions about small towns are common, relatively little research has been conducted regarding housing needs, regulatory policies, and supportive programs in these communities. We address the lack of information by documenting the extent to which small Minnesota communities have identified the need for additional affordable housing and are using their regulatory powers to shape housing development.

Background

Housing development proposals often result in community conflicts. In particular, attempts to provide affordable housing are frequently resisted by local residents and sometimes by local officials (Mattson, 1997). The drive to maintain the status quo among the established local leaders and elected officials is strong (Johnson, 1991). Local officials use their regulatory power over zoning, subdivisions, housing, and building ordinances to control change within the community (Mattson, 1997). In these cases, the local policies reinforce the stereotypical housing ideals of owner-occupied homes, set on large individual lots, in residential neighborhoods. Occasionally, growth management policies place moratoriums on all new construction as a strategy to limit housing development and control change in the community. Alternatively, in an effort to maintain the quality of the housing stock and promote economic development, local officials may promote public-private partnerships to encourage selected housing programs or development activities. Where these efforts are directed at providing more affordable housing, the proposals often meet citizen resistance. Public hearings on the development of new housing or zoning changes permitting higher density housing are often contentious. The opposition to the development of attached townhomes, multifamily rental housing, smaller starter homes, or the use of cost-saving building technology such as manufactured housing is common. In order to avoid the conflict that arises whenever land use changes are proposed, local officials are reluctant to address policies that impact housing. As a result, some communities simply have very few local regulations regarding land use, building construction, or housing use and maintenance standards.

Nationally, there is no uniform planning and land use legislation (Galatry, Allaway and Kyle, 1991). The regulations related to housing policies fall within the states' mandate under the policy to promote public health, safety, and general welfare. State legislation is typically general, setting only minimum standards and using constitutional authority to delegate responsibility for meeting minimum acceptable levels of services to local jurisdictions. Local governments have the option to provide higher level services, rather than the minimum levels, or they can provide additional services for the community's own good. (Norman, personal communications). Thus, local jurisdictions can enact ordinances to direct housing development and maintain the quality of the housing stock.

Land use regulations, building codes, and housing standards regulate the planning, design, construction, operation, and maintenance of local housing. Most of these legal requirements focus on aspects of the development process; for example, zoning regulates housing types and density for specific parcels of land. Subdivision codes deal with the division of land into building lots and the design of supporting site improvements, such as streets, curbs and gutters, and water and sewer connections. Building codes regulate construction standards and provide materials specifications governing the "construction, reconstruction, alteration, and repair of buildings and other structures to which the code is applicable" (Minnesota Stat. Ann. ¤16B. 59, 1999). Housing codes regulate occupancy factors regarding tenant health and safety as well as the structural condition of existing housing.

According to Minnesota state law, all metropolitan counties and municipalities, regardless of their size, are required to adopt the Minnesota State Building Code. However, local jurisdictions in nonmetropolitan areas are not subject to the same mandates (Minnesota Stat. Ann. ¤16B. 72, 1999). Where counties have adopted the code, the decision is applied countywide and municipalities within the county are covered by the regulations. However, if a nonmetropolitan county chooses not to adopt the code, municipalities within that county may choose whether or not to require new construction to meet specific code standards. Thus, the enforcement of new construction regulations may vary widely from place to place within the state. Building codes control the quality of new housing development, and therefore strongly influence the physical character of the community. Similarly, land use regulations, such as zoning, are under the jurisdiction of local governments. Zoning, by regulating the location and density of housing, also impacts a small town's appearance.

This research examines the extent to which small Minnesota communities have identified housing development as a concern. Second, we explore the use of local regulations to control housing development among small communities. Finally, we study the involvement of local governments in programs that enhance the provision of affordable housing and supportive services in their communities.

Methods

In order to determine the extent to which small communities use local regulations to control housing development, a survey of Minnesota communities with populations under 30,000 was conducted. Using a stratified random sampling procedure, local officials in 160 out of the 790 Minnesota communities received a mail questionnaire. In order to assure a wide geographic distribution of the sample, the original population of communities was categorized according to location within University of Minnesota Extension districts. The number of communities within each district varies from 73 to 160. Twenty communities were randomly selected within each district as the study sample.

Local officials were identified for the sample communities and a questionnaire was mailed to them. The survey requested information regarding the perceived need for additional housing development, local policies regulating housing construction, maintenance, and occupancy, as well as local programs to facilitate housing development and assist low-income residents in meeting their housing needs.

After the initial mailing, 53 survey forms were received, for a 33 percent response rate. A reminder card was sent and 17 additional surveys were returned, raising the response rate to 45 percent. The findings from all 70 surveys are reported here.

Over half (54.3 percent) of the respondents were from communities with populations under 1,000. Respondents from communities of between 1,000 and 2,500 represent approximately 23 percent of the returned surveys. The remainder are from communities with populations between 2,500 and 15,000. Only one survey was returned from respondents representing the larger communities with populations between 15,000 and 30,000.

Findings

Housing is a recognized concern among leaders in small communities. Nearly all of the respondents (60 out of 70) indicated that housing has been identified as a need within their community. For over three-fourths of the respondents, the need for more affordable housing was identified. One out of every four communities identified the need for additional housing to meet growing labor force demands, and over half reported a need for senior housing. None of the respondents identified a need for emergency shelter in their community, and only one community recognized a need for emergency shelter for victims of domestic violence.

The first step in addressing a recognized need is to establish a plan of action. Nearly half (47.8 percent) of the respondents reported that community meetings have been held to address local housing concerns. In most cases these meetings were attended primarily by local business persons and interested citizens. Very few (n=4) of the community meetings involved youth in the community. Public awareness is an important part of planning, but the establishment of an official document or plan to guide the long-term development process is essential. Among the respondents, less than one-third indicated that their community has a comprehensive housing plan in place. In spite of the lack of a housing plan, the overwhelming majority of communities do have land use regulations or ordinances in place that impact the local housing situation. For example, 57 of the 70 communities (81.4 percent) have zoning for residential use. These zoning regulations tend to be fairly general, however. Only 30 of the 57 communities with zoning provide for multifamily zoning.

One means of promoting affordable housing, while also encouraging owner-occupancy of single family homes, is to provide for increased density through the use of zero-lot line zoning or cluster housing development. Zero-lot line developments allow homes to be constructed without a setback placing them on the edge of the lot. In a subdivision, if all homes in a particular block are shifted in the same direction, smaller lots can be used while maintaining the same appearance as a development with setbacks on all four sides of the lot. This has the effect of providing a larger area of open space between houses even if the number of homes in the subdivision is slightly increased.

Residential cluster development is a "means of permanently protecting open space, rural character, and important environmental resources in new housing developments" (Mega, Lukermann and Skyes, 1998). In cluster developments, buildings are located on smaller lots in one area of the subdivision and a greater amount of common open space is provided. Only eight of the respondents indicated that their community permitted such development options. Less than one-fourth of the communities with zoning provided for town house development.

In addition to being a more affordable housing construction method, manufactured homes situated in mobile home parks are often more affordable for consumers because of smaller lot sizes as well. However, the survey results indicated that designation of residential zoning for mobile home parks has limited use among small communities. Only 26 of the respondents indicated that their community provided for mobile home park zoning.

Building codes are a means of local control over the quality of new construction within the community. Among the respondents, over 73 percent indicated that their community required construction to meet building code standards. All of those with building codes had requirements regarding the location of the building on the lot regulating the setback or distance the building must be placed back from edge of the lot. Slightly more than half of the respondents (56 percent) indicated that their community required both new construction and substantial remodeling or renovation to meet structural, plumbing, and wiring standards.

Over half (59 percent) of the respondents noted that their community actively promoted housing development through direct involvement by the local government. Twenty-five towns have annexed land for residential subdivisions, 21 have used tax increment financing to support housing development, and eleven have issued local municipal bonds to provide financing for housing development. In addition, five communities have provided tax abatements and 14 communities have donated tax forfeited property for housing developments. Only three communities have created a local housing fund to provide capital for housing programs.

Regulations regarding housing maintenance are less common among small communities than cities. The national trend for housing stock in smaller communities to be of lower quality than in urban centers may reflect the lack of regulatory processes in smaller communities in regards to deteriorating housing.

Less than one-fifth (n=13) of the respondents indicated that there were occupancy regulations for rental property within their community. Only ten respondents indicated that their community required licensing of rental housing and only six communities had regular inspections of rental property. As a drastic measure in cases where public health or safety is a concern, communities can condemn property, acquire it, and demolish the buildings. Among the small communities surveyed, about 23 percent (n=16) respondents indicated that their community takes this action. One community donated a public building for adaptive reuse into housing.

Communities can also provide incentives to maintain the existing housing stock. Community-based home repair programs, for example, provide assistance for owners in making repairs to their homes. Among the respondents, 17 indicated that their community provided a home repair loan program and 19 said that a home repair grant program was available. One community subsidized a handyman service to help residents maintain their homes. Yet for two-thirds of the communities, local governments chose not to provide assistance in maintaining the housing stock.

The provision of housing through the public ownership and management of rental housing or by providing rent assistance is critical to very low-income families and elderly persons who cannot afford the cost of market rate units in their community. Twenty-two of the respondents indicated that their community had a public housing agency (PHA). In only nine of the communities, the PHA owned rental housing for elderly persons. Even fewer communities (n=8) provided publicly owned rental housing for families. Eleven of the PHAs provided rent assistance directly to low-income households. Fortunately, while few communities had local public housing agencies, over half (58.6 percent, n=41) were served by a county or regional housing authority. Sixteen of the 41 area-wide housing authorities provided housing for elderly persons and provided family housing. In 17 communities rent assistance was available for low-income households.

Conclusion

Housing is a recognized concern among Minnesota's small towns. Local officials indicated that over three-fourths of their communities needed to expand the available affordable housing options. Housing development for both older residents and newcomers seeking expanded employment opportunities within their towns was identified as a concern.

To manage the development of new housing, the majority of small towns rely on zoning and building codes. Very few have considered regulating the continued maintenance or occupancy of existing housing. While some communities have provisions under health and safety ordinances to condemn and demolish extremely deteriorated housing, only a handful provide incentives to repair and renovate their housing stock. This failure to consider the existing housing may result in substandard quality of available housing. Furthermore, assisting low-income households, especially elderly residents, in obtaining and maintaining affordable housing that enhances their well-being is essential to the ongoing vitality of a community. Yet, in many small communities, housing-related services are unavailable.

As communities strive to promote economic development and achieve a high quality of life for their residents, housing will remain a major priority. Conflicts over the type of housing that is developed, the mix of rental and owner-occupied units, and the provision of housing for elderly persons or those with special needs will continue to challenge local officials. Recognition of the potential consequences Ñ intended and unintended Ñ of local housing policies is critical for small communities as they resolve the competing goals of maintaining their rural character while growing successfully.

The state legislature can assist local communities in addressing their housing concerns in a number of ways. First, funding for affordable housing programs statewide must be supported. Second, programs that provide technical assistance and encourage local officials to develop skills to address housing issues should be encouraged. Third, the establishment of recommended codes for housing occupancy, rental housing licensing, and housing maintenance would be extremely helpful for communities struggling to control overcrowded housing conditions, regulate the quality of rental units, and preserve affordable housing.

References

Galaty., F. W., W. J. Allaway, and R. C. Kyle. 1991. Modern Real Estate Practice. Chicago: Real Estate Education Company.

Johnson, R. 1991. A Question of Place: Exploring the Practice of Human Geography. Cambridge, MA: Blackwell.

Mattson, G. A. 1997. "Redefining the American Small Town: Community Governance." Journal of Rural Studies, 13:1 pp. 121-30.

Mega, M., B. Lukermann, and R. Sykes. 1998. Residential Cluster Development: Overview of Key Issues. MI-7059-S.

University of Minnesota Extension. Available at http://www.extension.umn.edu.

Norman, Jerry. January 31, 2000. Personal interview.

Minnesota Stat. Ann. ¤16B. 59. 1999. Minnesota State Building Code.

Minnesota Stat. Ann. ¤16B. 72. 1999. Minnesota State Building Code.

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