Residence development round Rochester is a battle of provide and demand

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“It’s really important if you want growth,” said Mary Blair-Hoeft, Byron City administrator. “It’s important to business and schools.”

Last year, the city on the western edge of the district of Olmsted issued 28 building permits for single-family houses and four permits for multi-family houses in the amount of 64 residential units. This year the pace has been similar so far: Byron sees permits for 31 single-family homes and three townhouse permits for 10 units each, with the likelihood being higher.

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Byron’s success is no accident, said Blair-Hoeft. The subdivisions of the town squares are a few years in advance before they are needed so that sewage, water and roads are in place before the land is sold and the dirt moves. The city also has an inventory of land for homes at prices that range from $ 200,000 for starter homes to homes in the $ 300,000 to $ 400,000 range.

“We have many at different levels,” said Blair-Hoeft. “We like it when we can have variety so we can meet the different needs of different buyers.”

Mary Blair-Hoof

In the region

Blair-Hoeft said there are currently 74 single-family lots in Byron – either sold or unsold – with no planning yet to be granted, and another 34 for apartment buildings.

“Some lots will stay out a little longer, but that’s mainly because of the pricing,” she said. “Developers know which are the hardest to sell and usually charge them accordingly.”

Byron isn’t the only city fighting for more housing.

30 new plots will be created in Kasson, 43 building permits were issued in 2020 and 24 more were approved in 2021.

From left, Nick Hagen-Erickson, carpenter, Nathan Liesse, chief carpenter, and Richard Dessner, carpenter, all with Elias Construction, are working on a screened-in porch in a house in Rochester on Wednesday, May 26, 2021.  (Joe Ahlquist / jahlquist@postbulletin.com)

From left, Nick Hagen-Erickson, carpenter, Nathan Liesse, chief carpenter, and Richard Dessner, carpenter, all with Elias Construction, are working on a screened-in porch in a house in Rochester on Wednesday, May 26, 2021. (Joe Ahlquist / jahlquist@postbulletin.com)

Between 2020 and now in 2021, Eyota has issued permits for eight single-family homes and four multi-family homes, representing 12 separate units. A further 20 single-family houses are being built in a subdivision, another offers space for 18 residential units between single and multi-family houses.

Eyota Town Clerk Marlis Knowlton said these new lots are coming on time as the city does not currently have an empty lot.

Market barriers

All of these lots are a welcome sight, said John Eischen, executive director of Rochester Area Builders.

“We had people from Lewiston town who turned to us and said they needed single-family houses down there,” said Eischen. “I spoke to Jimmie-John (King), the Mayor of Stewartville.”

John Eischen, Rochester Area Builders

John Eischen, Rochester Area Builders

Around Rochester, Eischen said, cities are asking what they can do to get more housing.

Eischen said there are several factors preventing the housing industry from going full throttle despite an abundance of building plots available and high interest rates.

“The lumber prices are extremely high,” said Eischen. “Nobody saw prices the way we see them now.”

In a typical three-bedroom, two-bath home, lumber prices can add $ 30,000 to construction costs, he said. For apartment buildings, the additional cost of wood averages about $ 12,000 per unit.

And it’s not just wood. Steel prices have risen. Home appliance costs have increased, in part because manufacturers thought demand would decrease during the COVID-19 pandemic, but demand actually increased as people started embarking on remodeling projects to make their homes more livable, while they were stuck at home.

Jessica Markley, interior designer and marketing manager at Elias Construction in Byron, said her company was inundated with remodeling and additions over the past year.

“Because people have stayed home a lot over the past year, they have focused on improving their homes,” said Markley. “We have benefited a lot.”

Nick Hagen-Erickson, a carpenter at Elias Construction, is working on a screened porch at a home in Rochester on Wednesday, May 26, 2021.  (Joe Ahlquist / jahlquist@postbulletin.com)

Nick Hagen-Erickson, a carpenter at Elias Construction, is working on a screened porch at a home in Rochester on Wednesday, May 26, 2021. (Joe Ahlquist / jahlquist@postbulletin.com)

Markley said the company needs to manage customer expectations and inform them of the realities of a remodeling job versus the popular television shows on television.

First, there’s the cost of materials, which ranges from lumber and siding to roofs and equipment.

Next, she said, it would be the supply chain. A good example, she said, is the lighting, which has stayed about the same in terms of cost, but with so much shipping overseas, items can be delayed.

“Manufacturers didn’t expect that they would need so much replenishment because of COVID,” she said. “More than just costs, we have availability issues.”

Another scarce resource is work.

“With the boom and jobs, it gets even clearer,” said Markley. “There has been a decline in skilled craftsmen.”

Markley said one strategy Elias Construction has used is to give itself more lead time on projects. This means that decisions are made early enough in the process so that materials and components can arrive on time for the project.

Regardless of whether it is a renovation or a new building, the builders now have their hands full, according to Eischen, and the problems with material costs and availability have only intensified the work.

“We were in trouble before the pandemic, and that only made the problems worse,” Eischen said, citing the need for more living space. “And when the construction prices for new buildings rise, the prices for existing apartments rise with it.”