Studies: Washington County workers earn less, live elsewhere
The Washington County Housing and Redevelopment Authority is hoping incentives and tax breaks will lure developers to the area and expand affordable housing options in the county.
Recent economic development studies show projected imbalances in the supply and demand for rental housing and that the majority of workers in the county are earning less and living elsewhere.
“What the HRA is trying to promote is a call for partnership with the private sector and the nonprofit sector to have a collaboration to create what we call workforce housing,” said Washington County HRA executive director Barbara Dacy. “So we can create additional housing choices and opportunities so that the employees that work in the county can have an opportunity to live closer to their jobs so they can avoid a longer commute.”
According to the University of Minnesota Extension Service, the economic big picture numbers revealed the county is well on its way to recovering from the recession.
The county’s employment rate grew by 80 percent from 1990 to 2012 with 32,000 jobs, according to U of M Extension data. The number of jobs in 2012 nearly rebounded to pre-recession levels, too.
But the study also showed that jobs in Washington County pay relatively low wages and that residents of the county have high incomes primarily from jobs outside of the county.
The average Washington County worker earns less than $800 a week, according to the data, compared with the Twin Cities metro average worker who earns around $1,100 a week.
“There is a dichotomy there,” said Adeel Ahmed of the community economics team at U of M Extension. “Basically it creates a difficult housing market.”
Another study by Minneapolis-based Maxfield Research shows a lingering affordability gap between the prices of rental housing and the wages of those who work in Washington County.
It also reveals projected demand for affordable rental units will be more than four times greater than the rate at which those units have been built in the past.
Each year, the average worker falls $4,400 short of reasonably affording the average monthly rent of $1,105 — the highest in the metro area, said Maxfield Research president Mary Bujold.
There are, however, some financing tools to entice developers to build in high demand areas of the county like Woodbury and Cottage Grove, where retail jobs have been growing.
The housing tax credit program, for example, gives developers tax credit annually for 10 years as long as they provide affordable housing for 30 years.
There are a number of programs available to facilitate private sector development, Dacy said, but they’re also time intensive and it can take up to three years to put together the resources to create those developments.
“The need outstrips the resources,” she said. “But the goal is to work in partnership and to leverage and to be as creative and innovative as possible.”
Many Washington County communities have historically grown as “bedroom communities” and now are starting to become typical suburbs with single-family and detached homes costing higher than what some individuals are able to afford.
So over time, when properties are bought and sold and based on comparability, the cost to develop those multi-family rental properties may have been higher than the rest of the metro.
Additionally, Dacy noted, the cost to extend water and sewer and buy empty land contribute to the higher rental prices.
“Eventually that gets passed on to homebuyers,” she said.
Most jobs in Washington County are retail jobs, Ahmed said, which explains why workers earn less compared to the rest of the metro.
Rep. Joann Ward, DFL-Woodbury, said even if the legislature were to pass a minimum wage increase of $9.50 an hour by 2015, it’s still not enough to pay rent in the county.
“There is no way that’s a living wage,” she said. “And these are not just teenagers looking for a few hours of work.”
The goal, Dacy said, is to provide more affordable rental units so that Washington County workers don’t have to pay more than 30 percent of their income on housing.
Providing two-bedroom apartments for $200 less than the average monthly rent of $1,105 can make a difference in helping families with day care expenses, transportation costs and grocery bills.
“By providing the diversity of housing, a little more balance in the housing stock, it can retain or attract working families,” she said. “Then that in turns helps support the neighborhoods and school systems and create additional opportunity for economic investment.”