City faces rental housing shortage
According to real estate statistics, Mobridge is facing a housing shortage that is particularly affecting those with middle income. With what little housing available currently located in subsidized units, some are wondering if the shortage is keeping good jobs away.
“Right now, “ said Overseth. “Lack of rental property is the number one issue preventing people from coming to town.”
Overseth said the housing market has been strong this year, with just under 15 homes on the market. Prevailing low interest rates have been good for potential homebuyers, he said, but most people looking at moving to Mobridge don’t want to buy a house just yet.
“Most people that call me want to rent a house for a year before they move here permanently,” said Overseth. “They want to see if Mobridge is a fit before they lock into a 20-year mortgage.”
Overseth said he receives around seven to 10 calls a week from those with entry-level positions but often has to turn them away. He fears they find work elsewhere.
The problem has become enough of an issue to grab the attention of the city council. Mayor Jamie Dietterle said the city is looking into possible solutions.
“We’ve discussed housing issues in Mobridge,” said Dietterle. “It’s become a concern and we’re looking at our options.”
Mobridge was largely sheltered from the housing boom and bust experienced by larger, more urban areas. The insulation left Mobridge in a slightly different position than the rest of the country. Mobridge, unlike many areas in the rest of the country, is a sellers market.
Peg Dixon of the Mobridge Housing Authority said housing and industry have reached equilibrium. Middle and upper income and low income families are all equally challenged by the unavailability of housing. But those who are most affected are those who do not have the means to build.
“Housing has proved to be hard to find at any level of income,” said Dixon. “But rentals are almost non-existent.”
She said there are less than three apartments currently available for rent on the market. All available units are located in the Brown Palace. The Brown Palace is a Housing and Urban Development Section 8 qualified property and is exclusively available to those with limited or no income. She said while there has been an effort to increase housing for those with limited or no income, any improvement has been quickly overtaken by demand.
Recently, a series of duplexes and four-plexes was built at the cross-section of 14 Street West and Third Avenue West. These units are income based but not income limited and are geared towards middle-income renters or owners. Dixon said the 12 units were filled quickly and soon developed a waiting list of nearly 20 people. According to her, this is typical for Mobridge and potential renters of subsidized housing shouldn’t expect a unit to open up any time soon.
“Tenants usually have to wait a couple years to get into these units,” said Dixon.
Much like the rest of Mobridge, those who typically look for units like the duplexes and four-plexes plan to live in the units for extended periods of time because of the rent controls. She said one unit has become available recently, but only after the resident passed away.
Some have blamed the lack of availability of housing on public sector involvement. They say that subsidized hosing makes it impossible for the private sector to compete. Landlords like Terry Schlenker say subsidized housing forces out private sector investments.
“If the government would stay out of housing completely, everybody would be on a level playing field,” said Schlenker. “For us it’s not like the other places where they don’t pay taxes and receive grants to build.”
The bulk of rental units in Mobridge are subsidized, or income based. According to the Mobridge Housing Authority, a privately owned apartment typically runs more than $150 each month more than a subsidized unit because of differing tax rates. But even with the tax-free status, said Dixon, the units sometimes barely break even, and sometimes take a loss.
“It’s definitely not a money makers,” said Dixon. “And we serve two different types of renters. The type of person who qualifies for a subsidized building typically can’t afford a privately owned unit anyways.”
Gene Cox is on the city council and said there’s not much the public sector can do. Homes Are Possible Inc, is a federally backed home grant loan association. They recently built four homes in Mobridge on donated land. Two remain unsold and after completion, all four homes appraised for less than the cost to build.
He said this depressed market is the real issue behind housing constraints and not competition between the private and public sectors.
“If I was an investor looking to buy a home, I would look at those homes appraisal values and think twice about building,” said Cox.
Land Lord Roy Hoff lays the depressed market at the feet of recently limited industrial growth.
“We need an economic bump in our economy,” said Hoff. “Building costs are too high to receive a decent return on investment. That’s the real reason why the private sector isn’t building. Until we see some more industry in town, we won’t have more housing.”
– Stuart Hughes –