Study: ‘Overwhelming’ need for local rental housing

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• 52-unit apartment complex on way for Mitchell

In recent months, local employers have repeatedly called Bryan Hisel to report another potential employee who chose not to move to Mitchell simply because he or she couldn’t find a place to live.

Armed with new information from an in-depth study on rental and single-family housing in Mitchell, Hisel, executive director of Mitchell Area Development Corp. and the Mitchell Area Chamber of Commerce, hopes those calls will soon stop.

The results of the study, performed by Scott Knudson and Steve Griesert with the Minnesota-based research firm Community Partners Research, were presented Wednesday afternoon before a crowd of about 60 people at the Highland Conference Center.

“It affirmed with data and hard numbers what we were already guessing,” Hisel said.

The study, which cost $26,400, was funded by MADC, with help from other organizations — $5,000 from the Mitchell Housing Authority, $2,600 from the Mitchell Area Manufacturers Association and $2,000 from the Parkston Development Corporation.

The study identified an “overwhelming need” for additional quality rental housing in the city, Griesert said at a press conference Wednesday afternoon.

Between 2000 and 2010 Mitchell added 696 people and 575 households, the study says, and the rate of growth has been increasing since at least 1990. Despite the continuing growth in population, there has been “very limited” construction of new rental housing in the city. No new conventional, non-subsidized apartment buildings have been built in Mitchell since 2003, the study says.

The rate of home-ownership in Mitchell is about 56 percent, below the statewide average of 68 percent, the study says, meaning the city has a higher population of renters than many comparable cities.

The vacancy rate among conventional apartments in Mitchell is 1.3 percent, the study says. Even that rate, below the 3 to 5 percent range Knudson said was ideal, may be misleading.

“Almost every time we found an unoccupied unit, the owner was already processing a new renter,” he said.

Rents varied based on the age and condition of the units. Monthly rent for older apartments generally fell between $375 and $490 for a one-bedroom unit and between $550 and $775 for a two-bedroom unit, while rent for newer one-bedroom apartments was above $700 and two-bedroom apartments above $900. Even with the higher cost of the city’s newer apartments, the study says the occupancy rate was still very high.

Over a five-year period, the researchers said Mitchell has the potential to add between 110 and 150 conventional apartments, another 40 to 60 “moderate rent” apartments — which would utilize federal low-income tax credits or other resources — and 20 to 30 subsidized apartments.

In downtown Mitchell alone, the researchers said another 100 apartments could be added in the upper floors of some downtown buildings, to add to the 182 apartments already in the area.

The poor condition of a segment of the city’s aging rental and owner-occupied units was of some concern, the researchers said.

Knudson and Griesert surveyed 1,000 homes in areas of Mitchell largely occupied by older homes and rental units, and found more than 25 percent needed “major repairs.” There were 41 homes they judged to be “beyond repair” they believed should be considered for removal.

Though Mitchell already has a code enforcement officer who performs random inspections, the researchers recommended the city create a more formal program to address some of the problems with the city’s older rental properties.

To be most effective, Griesert said the inspections should be mandatory.

“Some rental property owners are all for it,” Griesert said. “… Others, not so much.”

In addition to an inspection program, the researchers recommended the city consider a neighborhood rehabilitation program to either repair or replace the old and deteriorating housing units in parts of Mitchell.

“It’s easier to write these things down than to actually do them,” Griesert said, advising the study provided information, but not all the answers to Mitchell’s housing shortage.

The study should help spur housing development in Mitchell, Hisel said.

“It gives higher confidence to investors, lenders and developers that the demand (for housing) is there,” he said. “That’s really what we’ve done.”

Tags: news, updates, housing, local, mitchell