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Amid shortage, workforce housing becomes option in rural Missouri

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Amid shortage, workforce housing becomes option in rural Missouri

Jun 12, 2024 | 11:32 am ET
By Meg Cunningham
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Amid shortage, workforce housing becomes option in rural Missouri
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A program is being piloted in northeast Missouri to build more housing for workers. They hope it will take off across Missouri (Meg Cunningham/The Beacon).

In Kirksville, an entire floor of the hospital sits empty. The community could easily fill beds with patients — if only it could hire nurses and other workers to tend to them.

Just up U.S. 63 near the Iowa border, the Schuyler School District can’t keep teachers on the payroll.

A manufacturer wants to open its doors in the area, but worries about finding workers.

Although the open jobs may suggest otherwise, plenty of people want to live in rural Missouri — if they could find somewhere to live. The housing shortage across the state makes that difficult and thwarts efforts to draw workers and fuel local economies.

In smaller communities, homes are often old and need thousands of dollars in renovations to become livable, or they are newly built and more expensive than what many people can afford.

The rise in institutional investors that own and rent out single-family homes makes things worse, said Paula Hubbard, a real estate agent in Bolivar.

“We face the same dilemma that everyone faces across the country,” Hubbard said.

But in a small town like Bolivar, every housing unit counts.

“We feel it on a smaller scale,” Hubbard said. “The difference of one, two or three houses has a reverberating effect in our community.”

Missouri’s affordable housing dilemma

Missouri’s population is consistently growing, though some parts of the state are seeing more growth than others.

And while the population grows, the supply of affordable housing wanes. A 2020 report from the Missouri Housing Development Commission found a shortfall of nearly 128,000 affordable rental units in the state. For every 100 low-income households in Missouri, only 31 affordable units were available.

The report stated that rural affordable housing projects aren’t perceived as a priority, despite 48% of the agency’s spending going to rural areas.

Another 8,300 affordable units will likely lose their status as affordable housing units by 2030 and consequently no longer qualify for tax credits, said Jeff Smith, the executive director of the Missouri Workforce Housing Association.

When those tax credits — handed out to developers in return for keeping rents low — expire, the landlords can charge higher market rates.

And new housing units aren’t built at a rate that matches the low-income units that sunset.

“At the rate we build through (the program),” Smith said, “we don’t come anywhere close to replenishing the number of units that lapse out of affordability each year.”

In Hubbard’s area, the hospital is in the middle of an expansion. But she’s concerned about where the staffers who will work in that hospital will live.

“As far as entry-level affordable homes, it’s almost impossible,” Hubbard said. “In every instance, it is a struggle to find someone the right house.”

Developers get subsidies for building low-income housing, and they see demand to build new homes for upper-middle class families. In the meantime, those who fall outside of those categories are short on options.

It’s a chronic problem in Missouri. With interest rates high, homeowners don’t want to sell, leaving inventory low. And homebuilders aren’t keen to drop a brand-new development into a small community when they aren’t sure enough people can afford to buy them.

Housing experts point to the idea of the “missing middle housing,” like smaller homes or duplexes that more people can afford. It’s housing that isn’t eligible for tax credits or other construction subsidies. Despite the demand, those styles of homes aren’t popular among developers.

A nonprofit regional planning commission in northeast Missouri thinks it has found a path to catalyze growth.

How northeast Missouri wants to solve its housing shortage

The Northeast Missouri Regional Planning Commission covers six counties in the top right corner of the state, including Adair, where Kirksville is located.

The group conducted a housing needs study and found that the area had the capacity for another 450 housing units. Employers and real estate agents who responded to the survey said they mostly need housing for workers.

To meet that demand and with buy-in from local electric cooperatives, the planning commission created a fund to build homes in the $180,000 to $240,000 range.

The commision wants to start with one home in each of the six counties it covers. The homes will be sold to the first eligible buyer, so bidding wars that drive up the prices won’t be a factor. To minimize the strain on local utilities, they’re building on lots where homes have been demolished or abandoned.

Derek Weber, the executive director of the planning commission there, said that 65% of the homes in the area were built before 1960. Those homes have a median price of $90,000. Another 20% of the homes in the area were built after 2008 and have a median price of $400,000.

That leaves a sizable gap when it comes to affordable homes.

“The middle 10% is your workforce housing,” Weber said, “and there’s just no stock.”

Because Missouri’s regional planning commissions are nonprofits, they and others who use the potential state program to build homes won’t profit when they sell them. Instead, the purchase price of one home goes to building another. And so on. Local lumberyards and construction companies will still get paid, but developers won’t make a profit from the sale of the homes.

Weber stole the idea from Nebraska. In 2017, Nebraska passed a rural workforce housing grant, which created a nearly $30 million fund to distribute to nonprofits across the state to build housing units to help attract workers to rural areas.

The northeast planning commission broke ground on its first project in March. And it wants Missouri to expand the program across the state.

Republican state Rep. Greg Sharpe, who represents the area in Jefferson City, introduced legislation that mirrored Nebraska’s program during the 2024 legislative session.

During a hearing on the legislation, Michael Scheib, the CEO of Tri-County Electric Cooperative, a partner on the project, said that the Schuyler School District and area hospitals are interested in purchasing one of their homes.

“When we sit down with superintendents, they’ll say, ‘We get a teacher for one or two years, but the housing isn’t very good,’” Scheib said. “Schuyler schools are actually thinking about buying one of those houses and making it where a couple of young teachers could live in that house.”

Hospitals are eyeing the same approach when it comes to finding housing for their traveling nurses, he said.

“That’s my neighbors that can’t be served at that hospital because they can’t get nursing,” Scheib said, “because they don’t have places for those nurses to live.”

The planning commission and its partners believe that the undertaking is a way to slowly stir growth in their communities.

“We’re not looking to make a profit. We are looking to grow northeast Missouri,” Weber said during the hearing. “We’re trying to serve our community and create a way to bring a workforce to our region.”

With limited traction on the bill in 2024, Weber thinks next year will bring better luck. After the groundbreaking and as the word spread across the state, other groups like the Southeast Missouri Regional Planning Commission are watching to see if they could mimic the structure.

Despite all of the need for housing across Missouri, Weber said he felt that lawmakers in Jefferson City didn’t realize how bad the problem is.

“From the lawmakers I’ve spoken with, they look at it like it’s not their priority to get involved,” Weber said. “I don’t think they’ve attached the amount of homes we have to the workforce needs.”

This article first appeared on Beacon: Missouri and is republished here under a Creative Commons license.

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