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City Notes: The relationship between housing and economic development

By Tim Fox, Executive director, Charles City Economic Development Corp.

In 1998 a distinguished colleague of mine, one of the foremost economic development practitioners in the nation, famously declared “I am not in charge of population.”

The line of thinking back then was that if you help bring enough jobs to town, residents will follow. She or he infused a line of demarcation into the mix, that housing and economic development constitute dissimilar constructs.

Tim Fox
Tim Fox

However, rapid social change has obviated this demarcation. A good job is no longer a sole determinant for residence. This is especially true in Charles City’s instance, given the transportation mobility afforded by the Avenue of the Saints. Floyd County is still a net exporter of labor, even though we have witnessed new jobs and more people commuting to work here.

With households getting smaller and no new housing built, population by definition will decline. Population decline further contributes to work force supply constraints.

Jim Thompson, downtown specialist with the Iowa Economic Development Authority, recently noted that, for Charles City, housing is the key for “growth.” The presumption is that housing stock growth and worker supply are interrelated.

To inject a dose of rationality into the housing equation, Charles City Area Development Corp. recently issued a Request for Proposal to perform a county-wide housing needs assessment to three national firms. The RFP responses are being evaluated by the CCADC Housing Committee.

It is one thing to evaluate demand for housing. It is quite another to comprehend the real estate economics of housing development.

There has been much talk in Iowa about “affordable” and “work force” housing. The truth is that the economies of scale are skewed in smaller towns.

This is because construction costs are the same as in a metropolitan area and the number of people with ability to pay for new housing is finite.

The housing needs assessment will examine real estate alternatives based upon our demographic characteristics. It may be that new housing construction in Floyd County and Nashua is not feasible without subsidization.

At any rate, this is a solid first step in assessing our housing conditions and formulating plans for future development.   

In short, housing is an important consideration for all Floyd County residents. Growing the tax base and increasing population and giving current and prospective residents more housing options benefits everyone.       

   

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