By Heather Rule

Something was missing in Perham.

Large employers in town saw a need for affordable housing for their employees and potential employees.

“They were trying to hire people, but people couldn’t find an affordable place to live,” said Nick Murdock, economic development authority director for the City of Perham.

That led the business leaders, the city, and other stakeholders to set out to address the issue and create more housing. These leaders formed Grow Perham and built apartments to create workforce housing for local employees. The businesses in the group pooled money together for the project, “because they couldn’t draw the attention of a big developer to come in and do a project here in Perham,” Murdock said. In all, there are more than 20 investors.

“They’re basically just businesspeople who are putting their money where their mouth is,” according to Murdock. “They said, ‘We need it. Let’s build it.’ And it’s working for them.”

Grow Perham at first managed and maintained one apartment complex. With new development supported by the group, the city has added more than 300 apartment units to support the local growing workforce.

Housing study showed need

The need for housing was revealed in a 2014 housing study, which noted Perham could use 100 housing units at the time. Beyond that, the study indicated Perham needed another 10 housing units per year. The study recommended an additional 200 units, which Perham met within five years of the study.

Along with Grow Perham’s efforts, Perham also has a “pretty active single-family home rental market,” in the city, Murdock said. Some people own multiple rental homes and rent them to tenants. In 2023, Perham issued 12 permits for new homes. That marked the best year for the city in the last six years, according to Murdock.

Factors that create housing challenges

Many small cities struggle with the availability of land to add housing, plus there’s the necessary infrastructure to service those plots of land. So, adding the housing has been challenging.

“It’s really expensive to put in streets and water systems and sewer systems and natural gas,” Murdock said. “We’ve been lucky here in Perham. But we’ve got very active, very committed people in town that are willing to buy some land, stick their necks out a little bit, and then put some money down and build these developments.”

The city assists where it can, primarily with tax increment financing. Using that, much of the upfront costs for roads, water, and sewer expenses can be deferred until the property is sold to the end user. Many times, those costs get deferred and absorbed by the tax increment financing, “so they don’t end up having to pay it necessarily outright,” Murdock said. Financially, most developments completed through Grow Perham have used tax increment financing, tax abatement, or another available assistance program.

Costs — and rising costs — are always a struggle with these projects. When Perham added the Westwind Three edition a dozen years ago, the infrastructure investment per lot was about $13,000. But two years ago, with the Westwind Four, the tax assessment for that infrastructure jumped to about $30,000. That results in some juggling of costs and making sure there’s a viable developer who wants to invest in the project, Murdock said.

“Because from a city standpoint, we also don’t want to see this development fail,” he said. “We don’t want to throw infrastructure out in a field somewhere and then have it just sit there. So, we have an interest in these things succeeding.”

Land availability might be the next hurdle for Perham’s efforts to add more housing since they’ve “eaten up most of the available land,” Murdock said. A lot of the land around the city is owned by big farms and is hard to acquire.

More housing has positive ripple effect

Still, the added workforce housing in Perham has created a ripple effect for the city, its businesses, and schools. The more people living in the area, the better, Murdock said. More kids in the area leads to more funding for the school district, and everything trickles down to property values, too.

Perham has tourism, retail shops, and is a beautiful area with an abundance of natural resources. “So, people want to be here,” he said. “We’ve got the jobs for them to be here and live a comfortable life. We’ve just got to keep putting these pieces together so that it’s possible.”

“We’re trying to maximize the taxable value of the property that we have,” Murdock said, “so that we can provide these types of amenities.”

Heather Rule is a freelance writer.