As discussed in previous issues, the housing stock in Clarion is aging, and statistics suggest there is a larger market for newer homes than Clarion and Wright County have available for purchase. 22 lots at White Fox Landing ’s first phase will go to auction April 5, 2:00 p.m. at CG High School Library, amid local and regional development groups’ calls for more systematic studies of housing. See recent past issues of the Monitor  and this week’s Supervisor’s meeting story for more information.
Members of i2i – the Landing’s developer – have expressed hope that the development will directly and indirectly entice more people to move to the community, including relatively recent hires at expanding area businesses who do not live locally. Generally, members have expressed hope that “medium-income families”- from young couples to retiring farmers – would express an interest in lots.
The addition of higher end housing, however, is just one part of the overall socio-economic picture of living in Clarion:
Wright County’s Household Income
The County’s median household income 2008-2012, according to the U.S. Census, is $45,713. The median for the state is $51,129.
Earlier in March, the Des Moines Register ran an article, “Minimum Wage: How Far Does it Stretch?” detailing estimates by the Iowa Policy Project on income needed to break even to live in Iowa. For a single adult with no kids, the story estimated $26,145 a year before taxes, including $451 for rent and utilities. For a household of two adults and one child, they figured $53,416, including $681 for rent. A full-time worker earning the minimum wage of $7.25 an hour would earn around $15,000 per year.
Ted Brigger, who owns 17 Clarion residential rentals (plus, full disclosure, the building that houses the Monitor’s offices), estimated that monthly rental costs in Clarion range from $400-450 for a relatively inexpensive rental to $600-650 for a three-bedroom house. These numbers are consistent with the Project’s estimates. No systematic local information is kept on the number of rentals in Clarion or the cost thereof.
According to the Department of Revenue’s statistics, 28.2% of households in the Clarion-Goldfield School District make less than $20,000, and 27% make between $20,001 and $40,000. By these statistics, a significant portion of Clarion’s current residents may not be able to easily meet a financial break-even point.
The Monitor’s estimates do not factor in debt payments, which may be especially severe for younger college graduates: the Project on Student Debt states that the 71% of graduates of Iowa universities with debt in 2012 had an average debt of $29,456, the sixth-highest in the nation. 15% of Wright County residents have a bachelor’s degrees, according to the U.S. Census.
Residents of varying income levels are eligible for housing assistance loans and grants, such as those offered through Homeward, a housing assistance venture formed by eight rural energy co-ops. Deb Prehm is the local program manager, as well as a broker associate at North Iowa Real Estate. For Clarion residents, the program offers $7,000 (half as a loan, half as a grant) for home improvements to households making $56,928 a year, and up to $5,000 for necessary home repairs to households that make less than $21,348 a year.
The General Costs of Putting up a Home
White Fox Landing is Clarion’s first housing development since South Pointe Lane in mid-2000s, which has six lots, four of which presently have homes built on them. Since 2009, six homes have been built in Clarion, according to the Assessor’s office. As mentioned above and elsewhere in the Monitor, however, most information on Wright County’s housing not from the Assessor is presently anecdotal or from local businesses’ internal surveys.
How much does it cost to put up a home? The area contractor and professionals quoted here stress that their estimates are merely general estimates.
Area contractor Mark Torkelson suggested that area construction costs may start around $120 a square foot; Assessor Shari Plagge suggested a number of $150. By their respective estimates, a 1,400 square-foot home (the minimum allowable under White Fox Landing’s covenants) would cost between $168,000 and $210,000.
Contractor Todd Studer was reluctant to give a specific estimate by square footage, stating final cost is determined by a number of choices. “You don’t want to scare people off, but you don’t want to come in low and give them unrealistic expectations,” he said of estimates, citing – as did others – a multiplicity of decisions on options that go into designing a home. Generally speaking, however, Studer said that area homes he had observed had been being constructed have been in the “$250,000 range – and its nothing to see homes get into the 300, 400 range when they start customizing.”
A potential builder must consider the cost of the lot itself. “In some communities in North Iowa, the lots in the marketplace range from $25,000 to $30,000,” said Ron Fiscus of Planscape Partners, i2i’s legal counsel, while noting this is below what he suggests it costs to ready a lot for building. “In other areas, they are closer to what the market needs to be which is $45,000 to $50,000. It depends on the community.”
Alternate large-scale construction plans not currently being employed in Clarion involve leveling dilapidated properties, leaving their extant infrastructure open to new construction, including less expensive, modular-style homes not allowed at White Fox Landing. According to Susan Maier, finance office with the City of Eagle Grove, that city is in the planning stages of moving to demolish around 40 dilapidated properties to open them to development.
Gene Rosenbaum, vice president of First National Bank, said that “most people who are building, in general, are probably going to be in their 40s, 50s or 60s and a bulk of their down payment is coming from equity out of their previous homes and secondary from money they’ve just saved over time.”
Rosenbaum also noted that most newly constructed homes are financed over a 30-year mortgage because of the larger amounts of money involved. “Every situation is different so we try to tailor our financing options to meet the customer’s cash flows,” he said.
A 30 year mortgage at 4.0% interest for a $300,000 home would cost $1432.25 a month, or around $17,000 a year. A $400,000 loan would cost 1909.66 a month, or around $23,000 a year.
What do you think about building a new home, buying one, or just getting by? Let the Monitor know!! And read more info in the March 27 issue!