Perham a poster child for workforce housing needs
PERHAM, Minn.—More than 70 percent of people who work in Perham commute to the picturesque community of 3,000. That's according to a study done by Dave Schornack, who helped start Grow Perham 10 years ago, which has since built housing that quickly fills up. Schornack said earlier this year that "industry is growing faster than housing can keep up. We have to provide housing and amenities so people will want to live here."
But it is impossible to build enough apartments and houses that workers can afford, said City Administrator Jonathan Smith. If affordable housing were available in town, more workers in the community's factories could live close. But as it stands, booming Perham is one of Minnesota's most often used examples of the lack of workforce housing.
"Perham is sort of the little engine that could," state Housing Commissioner Mary Tingerthal said. "Jobs just keep coming."
Perham is home to major snack and pet food manufacturers and other big employers. The largest employer is Shearers, formerly Barrel O' Fun, with 830 workers. Tuffy's Pet Foods employs 228.
Local businesses are looking to hire up to 350 more workers.
About 150 apartments have been built in the past decade, City Manager Jonathan Smith said, mostly using city-approved tax breaks and government grants on top of private financing.
Other single-family home and apartment work also is ongoing.
"What the magic number is, it is hard to say," Smith said. Some say 24 to 48 new housing units are needed annually.
While most of the emphasis is on apartment construction, Smith said the goal is for renters eventually to be able to buy homes. "We are looking at that balancing act, rental versus home ownership."
A $120,000 home could result in mortgage payments close to what workers pay in rent, but Smith said it is difficult to build a home for $200,000 or less.
Rent in a two-bedroom apartment could be $780 a month.
Some local employers offer their workers loans to help them buy homes, some of which are forgiven if workers live in them long enough.
Banks also may get funds from government programs to make home ownership more affordable.
Smith said the city tries to do whatever it can to influence development, including providing tax breaks, and extending streets and utilities into new developments.
Workers who commute to Perham may come from more than 50 miles away, Smith said. Still, there are many Perham residents who leave town to work, including some who commute 70 miles to Fargo.
"There is a lot of back and forth because a lot of people just want to live in this area," Smith said.
KLN Family Brands, makers of snacks and candy, has used a variety of federal government programs in an attempt to hire people from other counties, four years ago investing in an apartment complex with 47 dormitory-style rooms for foreign workers.
"We continue to exhaust local and domestic avenues, and as added incentive we have initiated relocation and a revolving, no-interest loan program," KLN's Fred Sailer said. "During the five years I have been with KLN Family Brands, we have found it difficult to recruit people for our production team who have been in a financial position to relocate, make a down payment on an apartment and/or been able to pay the security deposit."
He said the company "had to be creative in order to hire entry-level personnel. Simply put, we have found that in the area of unskilled labor many candidates have serious debt and therefore, credit issues. Our programs to assist good candidates has helped."
For skilled workers, KLN initiated tuition repayment programs.