Affordable housing needs emphasized at Mankato roundtable with Smith

Oct. 6—MANKATO — The massive farm bill that will be drawn up and voted on next year covers everything from programs for farmers to school lunches. But U.S. Sen. Tina Smith heard mostly about the need for housing, particularly affordable housing, in rural areas during a roundtable she hosted Thursday in Mankato.

"It's a hugely consequential piece of legislation," she said of the farm bill, which is done every five years.

"The farm bill is really central to the economy of rural Minnesota," Smith said at the event at Pioneer Bank, where two dozen leaders of local, regional and state agencies attended to provide input on the rural development portion of the farm bill.

Smith, D-Minnesota, said she hears about the huge unmet demand for housing and affordable housing across the state and noted the problems of finding enough workers in most communities is tied to the lack of housing.

Chad Adams, CEO at Southwest Minnesota Housing Partnership, said his agency and others use federal funding to purchase affordable housing apartments and homes in order to maintain them as affordable housing, but said the effort is time consuming and funds limited.

"There's great risk that a lot of affordable housing will be converted to market rate housing," he said.

A participant from Jackson County said that while the region has a lot of major employers, there is little housing, leaving workers to travel 30 or 40 miles to get to work.

Much of the conversation focused on the difficulties small towns have in navigating all of the state and federal programs available as they have no grant writers or full-time town staff members to do the research necessary to tap funds.

Some participants suggested some type of groups be created that could help the smaller communities to work through the process.

Several speakers said it's increasingly important for more public-private partnerships to meet more housing needs. A spokesman from Compeer Financial, a Farm Credit cooperative, said they recently worked on a project to build a new hospital in a town about an hour north of the Twin Cities. He said they got involvement from every private bank in the region to help make the project happen.

He said that with new rural hospitals costing about $70 million, such federal, state and private partnerships will be increasingly important to get needed facilities built in rural areas. He said more direct funding for such programs is needed but also more federal loan guarantees that would encourage private banks to invest in rural projects.

Pioneer Bank CEO David Krause said the banking industry would be in full support of the government offering more loan guarantees to banks that take a risk on rural housing.

"If you're going to get broad private investment for housing, the risk has to be mitigated," Krause said.

Todd Prafke, city administrator of St. Peter, said one of the problems in creating more housing is to find ways for cities to pay for the needed infrastructure, including sewer, roads, water and even land. He said it would help if cities could borrow money from private banks at a below-market interest rate with the bank getting a federal loan guarantee.

Others noted there is also a lack of developers who have enough workers to build the housing that is needed.

Kevin Paap, Blue Earth County commissioner, said that even if small rural towns got the housing they needed, there remain big challenges, such as building the updated sewer and water plants, roads and other infrastructure needed to support the housing.

While hearings already have taken place on the next farm bill, a split has developed as House Republicans are wary of making climate change a priority for farmers and ranchers.

The pushback from Republicans comes as the Biden administration has proposed new investments in climate mitigation on farmland. Environmental groups say the farm bill could be a boon for fighting climate change.

While there will be clashes, the farm bill is one piece of legislation that is almost always guaranteed to pass as it affects the country's food safety as well as numerous programs that members in both parties favor.