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Uneven Recovery: Grand Rapids on the Mend

February 27, 2014 By Lee Egerstrom, Economic Development Fellow and Leigh Rosenberg, Minnesota Housing Partnership

Find more articles in the Uneven Recovery series, an ongoing collaboration between Minnesota 2020 and Minnesota Housing Partnership.

With 160 new housing units constructed or converted to residential use in 2013, Grand Rapids offers all Minnesota communities a glimmer of hope that housing shortages can be conquered when all local resources and government programs are put to work.

There is progress coming out of the housing crisis that hit most of the state five years ago, say Grand Rapids and surrounding Itasca County housing officials. “Everyone is pitching in,” said Rob Mattei, community development director for Grand Rapids.

Using federal, state, local and nonprofit resources to study, leverage and assist developers, last year Grand Rapids issued permits for 83 assisted living rental units, as well as 77 additional units, most of which were for rental housing, he said.

Mattei said 78 of the units permitted this past year are what housing officials consider affordable, although most market rate rents in Grand Rapids are close to that measurement. The city also helped the developer of assisted living units keep costs down through use of tax increment financing (TIF) though which road and utility improvements were made to support the project.

That is a strong rebound from 2010, the low point of Grand Rapids’ housing crisis, when only 11 housing units were added in the city, and the years 2007 through 2012 when new units never topped 44 in a year. Only 14 assisted living units were added in that entire period.



This is progress. Yet at the same time, homelessness and need for affordable housing are also increasing.

The Itasca County Housing and Redevelopment Authority (HRA) has more than 500 people, comprising a two-and-a-half-year waiting list, for U.S. Housing and Urban Development (HUD) low-income Section 8 rental assistance.

It’s almost a “good-news, bad-news joke except that it isn’t funny,” said Sherry Shadley, executive director of the Grace House emergency shelter at Grand Rapids.

The good news is that community leaders, lenders, nonprofits, research groups, the faith-based community and “just, plain good people” have come together to work on Grand Rapids and Itasca County housing problems, she said.

“But here’s the bad news,” Shadley added. In 2011, the Grace House emergency shelter provided temporary housing for 194 people and had to turn away 121 others for lack of capacity. The numbers increased to 211 people served in 2012, while 368 people were turned away; and a tally on 2013 shows 216 people served and 538 people turned away.

“We have the two companion problems of not enough affordable housing and poor-paying jobs,” she said. The unemployment rate in Itasca County continues far exceeds the state’s average, and median household incomes have fallen by $4,800 since 2007, according to data compiled by Wilder Research.

In many ways, homelessness is more visible in the Twin Cities, Duluth and other large cities where the homeless are often out in the open. Surrounded by forests, the homeless in Itasca County are less visible as people hunker into icehouses, hunting cabins or take to the woods with tents, cars, campers and vans. “We think there is more ‘couch hopping,’ where friends are opening their homes for temporary shelter, especially on cold nights,” Shadley said.

Demand for emergency shelter services seems to be a little less this winter. Eight churches in Itasca County back up Grace House’s work with temporary housing for up to one week at a time. But forest rangers, game wardens, sheriff’s deputies and others keep bringing in people from the woods who need warm places to stay. Shadley said a disturbing number of them are veterans who haven’t sought social services for reasons of pride or other factors.

Putting Grand Rapids and county statistics in perspective, Itasca County is Minnesota’s third largest county in land size, but had an estimated population of only 45,221 in 2012. That is a gain of about 200 people from the 2010 Census and of about 1,000 from the 2000 Census.

Grand Rapids is the county seat, cultural and marketing center with a population of about 11,000. Cohasset (2,700), Keewatin (1,000), Nashwauk (1,000), Deer River (900) and Bovey (800) are the other larger cities in the county, and scattered through the woods are 37 unincorporated settlements with extremely small populations.

Such numbers make what Grand Rapids and Itasca County are doing all the more impressive. They also make homeless and housing problems shocking.

Grand Rapids and Itasca County are currently engaged in a comprehensive study of housing needs that will help the communities going forward, said Rosemary Fagrelius, housing development director at Minnesota Housing Partnership (MHP) in St. Paul. The collaboration of groups involved with this project consists of a team of seven Grand Rapids area leaders, representing 15 area organizations.

Funding for their work is coming from the Grand Rapids-based Blandin Foundation, the Duluth-based Northland Foundation, and MHP through its Housing Institute for Greater Minnesota collaborative training project with the Greater Minnesota Housing Fund.

These are resources that not all communities can muster, said Fagrelius, and the key is that Grand Rapids and the county are all working regionally. This prevents playing one city off against another in the battle for HUD, Minnesota Housing Finance Agency, USDA Rural Development and other sources of housing funds.

Federal funds have been cut back, making access to housing programs more difficult, she added. But Fagrelius said collaborators in Grand Rapids and statewide are hopeful the Minnesota Legislature will make $100 million in state bonding authority available for housing programs.

That will help Grand Rapids and Itasca County keep making headway on housing, she said. And it would help other Minnesota communities follow our Northwoods neighbors’ lead.

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