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Rural towns, businesses join forces to help workers live closer to their jobs

MinnPost photo by Gregg Aamot
Jackson, a town of about 3,300 residents, is located in southwestern Minnesota near the Iowa border.

JACKSON, Minn. — At the AGCO manufacturing plant here, where workers roll out a dozen tractors and chemical sprayers each day, the number of workers is equal to a third of the city’s population.

It’s an enviable work force for a small Minnesota town. Yet hundreds of AGCO’s employees actually live outside this town of 3,300 in far southwestern Minnesota. One-fourth of the workers live more than 30 miles away, according to the company; some travel an hour one-way from towns where they have managed to find a home or an apartment. 

The result is untapped potential for the city, which would like the stronger tax base that more residents provide, and latent worries for AGCO, which needs the workers to keep up with demand for its machines.

'A missed opportunity'

Other rural communities around the state face the same conundrum – a housing market that isn’t keeping up with job growth. Eric Fisher, the director of operations at the Jackson plant, said the situation presents “a missed opportunity for greater Minnesota.”

He added: “It’s curbing the growth potential of a lot of rural communities because if they can’t get anybody to grow housing, then businesses won’t have a work force.”

To generate more housing in Jackson, AGCO has partnered with the city and two regional housing agencies on a plan to build 48 townhouse units on seven acres of land near the industrial park that is dominated by the manufacturer’s sprawling campus.

MinnPost photo by Gregg Aamot
AGCO’s Jackson plant has around 1,100 employees.

The company, which has 1,100 workers, has invested $220,000 in the $7 million project. The city donated the land and a state agency provided much of the financing while a regional nonprofit housing group will own the buildings.

“There just aren’t many for-sale signs around the city,” explained Susan Pirsig, Jackson’s economic development director.

New units in Worthington

Thirty miles west in Worthington, a similar project is under way: a $6.5 million plan to build 48 housing units. The city has invested $1.6 million in the project while its housing and redevelopment authority borrowed $4 million for it. Five local entities, meanwhile, including the meatpacker JBS, the city’s largest employer, together contributed $110,000.

And that only scratches the surface. By 2020, Worthington will need 500 more housing units simply to sustain its growth, said Bradley Chapulis, the community and economic development director.

A bill introduced in the Legislature this session would provide $50 million for work-force housing. The legislation, which would provide grants and investor tax credits, is being carried in the House by Rep. Rod Hamilton, a Republican from Mountain Lake, a town about 20 miles north of Jackson, and in the Senate by another regional lawmaker, DFL Rep. Dan Sparks of Austin.

One of the bill’s strongest backers is the Greater Minnesota Partnership, an organization that represents about 85 of the largest Minnesota cities outside the Twin Cities.

The challenge

Dan Dorman, the executive director of the group and a former legislator, noted that the housing stock in Albert Lea, where he grew up, has been stagnant for three decades. Attracting builders to towns in rural areas when building in the Twin Cities is a safer investment is a challenge, he said.

Chapulis traveled to St. Paul for a March 15 legislative hearing on the bill. He argues that it would serve a similar purpose as the incentives government often creates for developers in emerging markets, such as the wind energy industry whose giant turbines dot the windy plains in this region.

“We view this as another industry that needs a jump start to become sustainable on its own,” he said.

Photos by Gregg Aamot
A chemical spreader first made in Jackson in the 1960s is on display at AGCO’s visitor’s center.

Self-propelled chemical sprayers were first built in Jackson in the 1960s by a company called Ag-Chem (which was later sold to AGCO). One early model – painted in the mustard yellow that is the color of many AGCO-built machines – sits on display in a new visitors center on the north end of town. These days, besides building several brands of sprayers for AGCO, which is based in Georgia, the Jackson plant makes tractors, including Massey Ferguson and Challenger brands.

Tractors for far-flung markets

On a recent Friday afternoon, workers spread out along an assembly line in a cavernous, well-lit building worked on various parts of tractors. Big-screen TVs that time each work station and also note the destination of each machine hung on the wall; the models on the floor were headed for dealers in Illinois, Idaho, Arizona and the United Kingdom.

Across the street, engineers work in their own building while employees come and go from a company fitness center. Many AGCO workers have local ties and would love to live in Jackson, company officials said.

Some may soon be able to.

“There is such a need for a variety of housing types here,” said Pirsig, showing a reporter around the new housing site, which, so far, has only curbs, gutters and fire hydrants. “This (project) is one part of the puzzle in solving that issue.”

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Comments (16)

Public appetite

Governor Dayton, with his unique ability to say exactly the wrong thing, or maybe the right thing with exactly the wrong spin, put his finger on something when he said there was no "public appetite" for new stadiums. Of course there isn't. There never has been. What the public appetite is for is good teams, not good stadiums. And a lot of what bothers the public is that with all the money it spends on these stadiums, it never seems to translate into the only thing it wants, better performance on the courts and on the fields. The public is keeping it's part of the bargain. We build the stadiums, we renovate the arenas, we write the checks and our checks never bounce, and in exchange we get sports teams that waver between mediocre and awful. The bargains we have made have not turned out well for us.

"Housing shortage" = low pay

"Housing shortage" = low pay and/or job insecurity

If long-term jobs were secure and well paid, housing wouldn't have to be financed largely by the cities and non-profits.

Corporate welfare with some employees still having to receive additional governmental assistance to meet their daily needs.

not always

It could be that in a small town there is just a lack of available housing. Even if there is lower pay (which is expected in a rural town although there are other benefits of being rural) the cost of living (housing, property taxes, etc.) is also lower.

My guess is that in virtually

My guess is that in virtually every town where there is industry there are also people in the immediate area who make a living by building houses and apartments and there is access to every material necessary for the construction of apartments and houses (Otherwise, how would even subsidized housing get built?)

And that is exactly how the circulating flow of a healthy economy works--people make enough to buy what they need, and other people in the community have jobs because the other people can afford to purchase the goods and services that others in the community provide.

Rural towns, businesses join forces to help workers live closer

So, no housing is being built. Why? Maybe the return is not high enough for someone to invest in rental housing. Why is that? They can not charge enough for rent. Why is that? People can not afford the higher rent. Maybe if the employees were paid a higher wage they could afford higher rent and people would invest in rental housing. But, why pay your people more, You can complain about the lack of housing, invest $220,000 for $7 million of housing, and not pay your people any more money.

If they paid their employees more money they could afford higher rents and more housing would be built. It is not real complicated.

Gambling? I'm Shocked!

So those good conservative natives of out state MN elect a GOP-majority House and this is what we get? A government takeover of the housing market? I thought all of the job creators want a smaller government. "Get government off our backs so our businesses can grow!" What hypocrisy.

There was a time when employers located where they had access to labor. Now, they locate where they have access to a low wage labor force, and it's our problem to find housing through evil government subsidies.

For years, the UAW made concessions to Caterpillar, a very profitable corporation that flexed it's muscles to lower labor costs, because it could. Now CAT has announced it is moving production out of the good ol' USA. So what happens after the government "takes over the housing market" and these employers pull up stakes for greener pastures? Will they agree to keep a certain number of jobs for 20 years? What are we getting for our government tax dollars, which some like to say are confiscated over the barrel of a gun?

Let Adam Smith's Invisible Hand build the housing!

You're dead wrong, Frank.

You're dead wrong, Frank. Caterpillar is moving jobs back to the U.S., but the plant that used to be in Minnesota is not coming back.

http://www.gpb.org/blogs/georgia-works/2013/06/10/three-international-co...

Wonder why?

Beat Down

It's great to see that employers have beat down US manufacturing wages to the point we've joined the global race to the bottom.

And we wonder why employers whine that "we can't fill these jobs" (at $15/hour).

Word of caution for all you

Word of caution for all you higher wage mandate lovers. Minnesota is now, once again, among the top 3 highest taxed states in the country.

AgCo is based in Georgia, a state that just gobbled up your Caterpillar plant. Employees in Georgia can afford housing on lower wages because the cost of living, including the state's bite, are lower.

The 85 corridor is booming down here, and while we certainly won't refuse more business re-location from high tax states, y'all might want to keep a couple for yourselves.

If you don't like subsidizing housing for private sector employees, and you shouldn't, try taking less of their paychecks.

I'm feelin good about Minnesota.

Minnesota, that overtaxed state, seems to be doing better than many. Our unemployment rate is 4.5% vs Georgia's 7.8%, second highest in the country. Minnesota's economy is ranked 16th and Georgia's is 39th. I don't suppose Caterpillar moved to Georgia because they couldn't get the type of workforce they needed in Minnesota. Many of our workers are world class high tech employees. Minnesota's average annual wage is $51,000, Georgia's is $45,000. We'll know when the rhetoric turns real as Republican's will leave the state in large numbers for some of those greener pastures they think are somewhere else. Once they move the grass will appear greener somewhere else, again. The GOP is in control now and I'm still waiting for leadership. It seems infighting is all they are able to accomplish. That is what no leadership gets them.

Checked to see how many of

Checked to see how many of those jobs up there are temporary or part time? McDonalds isn't very popular in the South, and Chik-Fil-A employees don't quit as often. Hiring has been slow.

Also, if you read carefully, you'd have noticed I mentioned people in Georgia do very nicely on lower salaries because it's less expensive to live there. Evidently they found the workforce plenty skilled enough for their needs. So did 3M for that matter!

Go for it!

I'm still loving Minnesota and all it has to offer. I guess the part time thing is how the salaries got to $51,000 in Minnesota. Take away winter's cold and snow and road damage and Minnesota's cost of living would drop too. It is a fact of life, it is something we just have to pay for. I guess Minnesota being at or near the top of many polls about livability says something about being over taxed. That tax thing is just another GOP fuzz ball they throw at the wall and hope it will stick. When is the GOP going to work the real issues vs their pet projects?

Exactly backwards...

You have it backwards--the less companies pay their workers, the more the workers rely on governmental services.

And governmental services are paid for by higher taxes.

Gee TS

Did you miss those articles on?
Tax Fairness?
Low Unemployment
Higher than US average (Average incomes)
Show your numbers.
PS: SC is one if not the highest Federal tax taker (welfare) states in the union, when you all going to pull yourself up by your boot straps?

Build housing???

Why do investors need investor credit for building housing? Possibly because there is no expectation of return on investment. If there was, no credit would be needed. I'd be happy to invest in rental housing in some of Minnesota's rural communities if someone else gave me the money to invest.

Real homes or "townhome units"?

When a rural community or even a greater urban one 'speaks' in terms of a "town house' units", the image is one of trailer park housing sans wheels?

Clustered housing is an alternative if only to make a permanent livable space for new residents; ones that do not stand out as cheap temps rather than positively suggest; initiate long term blending in a community as those recipients are welcomed as permanent residents rather than gated out by the building of cheap "units" that mean profit for the builder/investors and a Welcome-To-Our-Town sign turned upside down?

To invite new workers who I assume have hopes, to fulfill permanent establishment needs...such hope to be recognized and those signs reflected even in the style and building of homes and attendant garden space etc.

Dwellings as homes need to be an invitation reflecting permanent not temporary structures-not with joined at the hip walls or which could be viewed as glorified chicken coops?

Cynic here but I do wonder...use funds wisely I hope and stick the profit motive in one's back pocket for a change and dwell on the human...but what do I know?