A pair of area home builders agree: Buyers are looking for something beyond just the typical single-family home in the housing market.
“Higher density is what we’re trying to do,” said Mike Paradise, president of Bigelow Homes in Rochester. “It’ll address some of the segments of our need.”
That means everything from more townhomes to more apartments. Today’s home buyers are not all looking for the same product, Paradise said, which means builders need to provide a variety of housing options.
It used to be that people would buy a home big enough to raise a family in, then stay in that house until they were wheeled out. However, Paradise said, today’s buyers are looking for a home that fits the immediate needs of their current stage of life.
“The home that used to cover that whole gamut doesn’t work anymore,” he said.
That diversity brings challenges to the home builder market.
“It used to be that people got out of college, they’d get a job and get a house,” Paradise said. “Today, we don’t have the product for them.”
Kevin Sternberg, a member of the Rochester Area Builders board and co-owner of Countryside Homes LLC, said part of the problem is that people aren’t as sold on the idea of living in that single-family American dream house.
“A lot of these millennials, they don’t want a house and all the things that come with a home,” he said. Rather than worry about mowing a lawn each weekend, they’d rather escape to the Twin Cities.
This move away from single-family homes has brought a boom in townhome building, Sternberg said. The reasons are many. In addition to the convenience of town homes — no lawn mowing, minimal shoveling — there’s also a much lower cost.
Townhomes have less land, less materials, and their cheaper costs are attractive to home buyers who want to own but don’t want some of the hassles that come with a big house and a big yard.
Paradise said answer to the housing crunch in Southeast Minnesota is not as simple as building a couple of thousand apartment units because people want to start small and grow into bigger housing as their needs grow rather than just buy one house and stay there.
As workers move into Rochester, they want an apartment or a townhouse. But as they get married and have children, they want a house. Finally, after becoming empty-nesters, people want to move back to a smaller home.
“Do we have a healthy housing market to let them continue to grow in the community?” Paradise said. “The answer is no.”
The answer, he said, is not to build one, large 400-unit apartment complex. Instead, builders need to develop 20 different 20-unit projects of all different types. “We need housing diversity in our community,” Paradise said.
This means a better partnership between public and private entities. Cities need to work with developers when it comes to zoning to allow mixed housing in the same area.
“Why do the single-family homes get the best lots and the best neighborhoods?” he said. “Why can’t people in apartments live in nice areas?”
Of course, none of this answers the question for smaller cities where the need for apartments or townhomes is real, but the city can’t support 100 units.
Buffy Beranek, executive director for Southeast Minnesota Multi-County Housing Redevelopment Authority, said the price of housing in Rochester is sending both buyers and renters looking for less expensive options in surrounding communities.
“In Rochester, you can build this big complex,” she said. “You can’t build this big complex in Wabasha.”
That, she said, is where government and builders need to work together to meet the needs of smaller communities across the region.
“You need to do 12 units in Wabasha, 24 in Plainview,” she said. “The question is, how are you going to finance these separately.”