Back to the Mar-Apr 2022 issue

Ottertail Initiative Aims to Address Housing Shortage

By Andrew Tellijohn

The City of Ottertail and surrounding communities have plenty of jobs available, but not a lot of places to live. So, leaders came up with the “Building Big” program, which they hope encourages people to build homes.

Lots for $1

As part of the program, the city of just over 600 has put several plots of land on the

Lots for sale sign
Photo courtesy City of Ottertail

market for $1 each, explains Mayor Ronald Grobeck. In return, buyers must build a home within one year of purchasing the property and make it their primary residence for at least three years.

They are large lots — at least 40,000 square feet — and Grobeck describes them as beautiful properties along Donalds Lake. And they come with incentives from the city and Otter Tail County that leaders hope will help address the shortage of housing while also attracting young people to the area to work, raise families, and become the next generation of leaders.

“We’re trying to get people to move to the City of Ottertail,” he says. “You pay us a buck for a lot, and you’ve got an instant $20,000 in equity.”

Preparing the lots

The city’s offer of $1 lots is its way of taking part in Otter Tail County’s “Big Build” program, which is intended to help increase housing throughout the county.

The lots near Donalds Lake were acquired by the city when the prior owner, a developer who owned the entire property, couldn’t pull together his plans. Ottertail bought the land with the idea of splitting it into several lots as part of a larger development, and has spent the last two years working on roads and other infrastructure.

The timing of the deal was fortunate because as part of the program with Otter Tail County, buyers will be eligible to apply for future property tax rebates on their new home.

“We took a bad plot and turned it into a good plot that will really benefit the families that purchase them,” Grobeck says. “I would think they’ll sell pretty quickly. It’s a really good deal.”

The city already has some experience with this type of transaction. A lot in a different part of Ottertail was sold last year for $1 to a retired couple new to the city. The city tore down the previous dilapidated residence, and the couple built a nice single-family home.

Countywide housing goals

Amy Baldwin, community development director for Otter Tail County, says the city is one of several to jump on board the county’s Big Build initiative. The goal of the program, which was launched in late 2019, is to build, preserve, or rehabilitate 5,000 housing units by 2025.

To date, preliminary data for 2021 shows that over 1,100 housing units have been built or substantially rehabilitated. That’s over 20% progress toward the goal.

Responding to the need

The county initiative stems from a low inventory of housing available — for rent or purchase — to those moving to the area for jobs.

A countywide study recently indicated a rental vacancy rate below 2%, “which basically means there is not any rental property available,” Baldwin says. “We also have a high demand for workers. We have folks aging out of the workforce, not leaving, so not opening up housing. So, as we work to try to support recruitment of people through our other efforts, we needed to ensure that they had housing that would be suitable for them.”

Part of the county’s effort has involved finding funds to support housing development and ownership, reinvestment, and rehabilitation, Baldwin says. Additionally, the county has been helping by providing resources where cities need them. In Ottertail, for example, the county provided a matching $25,000 grant and other assistance to help demolish the dilapidated structure and make their first $1 lot sale possible. In other cities, it’s helped support small staffs with various aspects of finding funds for projects.

“It’s not simple to address these housing issues,” she says. “What we’ve found is that each community is unique in its opportunities, and we’ll help with what you have as an opportunity. It’s a customized relationship with each community.”

Andrew Tellijohn is a freelance writer.