The number of people working in Litchfield has grown by 22% since 2011, but most of those people aren’t living in the city.
At least part of the reason, according to a market analysis performed for the city and released earlier this month: There’s a dearth of housing at all levels of the residential spectrum, from single family to rentals to senior housing.
The Housing Market Analysis by Viewpoint Consulting Group found that 4,066 people were working in Litchfield in 2022, an increase of 716 workers from the 3,377 working in Litchfield a decade ago. These numbers do not include self-employed, domestic, seasonal or railroad workers, or members of the armed forces, but only workers covered by Minnesota unemployment insurance.
Despite these employment numbers, the population of Litchfield has not grown much over the past decade. In fact, the city itself may have lost about 100 people, according to the 2020 census, which reported 6,624 residents, down from 6,726 in 2010. Meanwhile, the Meeker County’s population grew by about 0.4% and now totals 23,878 in Census numbers.
The report notes that employment in Litchfield is strong, even up from pre-COVID numbers of 3,969 in 2019. Meeker County also experienced job growth of 16%, from 6,610 workers in 2011 to 7,473 in 2022, but the bulk of these jobs — 54% — are in Litchfield. During the same decade, Meeker County’s unemployment rate decreased from a high of 7.7% in 2011 to 2.4% in November, 2022.
The analysis puts a finer point on the fact that, since the city of Litchfield accounts for only 28% of the county’s population, the potential for more local workers to live in town — were there more housing available — is obvious. The study demonstrates that approximately two-thirds of people who work in Litchfield commute from residences outside of the city. Of course, workers might not want to relocate, but the analysis notes that at least some would move closer to local workplaces if they could.
As is typical of residents of cities everywhere, about a third of Litchfield’s working residents commute elsewhere to work. The largest number (438) commute to jobs in other parts of Meeker County, but 324 drive to Hennepin County, with the next highest numbers traveling to Kandiyohi, Wright and McLeod counties.
Viewpoints Consulting President Jay Thompson told Litchfield City Council during its Feb. 6 meeting that more people might live in Litchfield than indicaed by the Census. Since 2010, 68 more households have been added to Litchfield, and there were 120 residential housing unit permits issued, which would seem to indicate some population increase, not a decrease, Thompson said. But since the 2020 Census was taken during the COVID pandemic, there might have been a national undercount of the population. Growth during the 2010s was also curtailed by the Great Recession, he said, and its housing downturn in the beginning of the decade. This decade (2020-2030), Litchfield is projected to grow by 316 people. “This growth projection partly stems from recent development trends and the potential for Litchfield to draw some of the many people who commute to Litchfield for work,” he stated.
Thompson estimates that the next decade of growth would be concentrated in the senior population as the “boomer” generation ages, and also among young and middle-aged working adults. “Growth of these age groups should create demand for a variety of housing types, including rentals, single family homes, townhomes, and senior housing,” he said. Sources of housing demand in Litchfield include projected household growth, pent-up rental demand, capturing a portion of commuters to jobs in Litchfield, and senior housing needs. He broke down the needs within 10 years to 515 housing units: 90 ownership units (single family or town home), 150 rental units and 275 senior units.
Among the analysis’ specific suggestions highlighted by Thompson were:
Developing a new subdivision of up to 20 town- or twin-homes within the next five years, as most lots for this type of housing are now built out in Litchfield, yet demand remains high for this type of housing.
There remain about 70 vacant buildable lots for modest single-family homes within Litchfield’s current five subdivisions, so that may suffice, but a small development appealing to move-up/executive home buyers could attract an estimated 14-16 households likely to want homes starting at $325,000.
About 30-40 more rentals should also be made affordable to people with incomes below 60% of the area median income for households, about $38,000. Litchfield’s household AMI is $63.093, which is lower than the state median income of $72,205. There are currently three subsidized housing projects in Litchfield, but greater use of Section 8 vouchers might make market-rate buildings more affordable.
Thompson advised that 80-85 market-rate apartment units be built within the next five years, with rents ranging from $950-$1,050 for one-bedroom to $1,100-$1,200 for two-bedroom units. “These rents would be among the highest in Litchfield but would still be affordable to households with incomes of 80% of AMI, and thus would be considered workforce housing,” he stated.
Senior housing needs are also great in Litchfield. Currently there are only two supportive senior housing buildings in Litchfield, plus a nursing home and a small assisted living residence. Thompson sees a pressing need for another 115-135 units of independent, assisted living and memory care housing within the next five years. When asked by council members about the effects of the “boomer” population dying off over the next 20 years, he noted that the number of people aged 75-plus in Litchfield is expected to remain steady for the next several decades, which could sustain the development of a new supportive senior housing complex and also 50-55 units of market-rate 55-plus rentals to meet the needs of younger, more active seniors who want to downsize from their existing homes.
Seniors who wish to downsize would likely find a strong market for existing real estate. Thompson told the council that local realtors told him that there were only nine homes listed for sale in Litchfield in January. Older homes in saleable condition tend to sell quickly as they are more affordable. The analysis reported that median single-family home sale price in Litchfield was $187,510 in 2022, through October. This is up from $127,150 in 2018.
There is also a need to rehabilitate existing homes. About 60% of the housing units in Litchfield were built prior to 1980. Thompson recommended that Litchfield explore a Small Cities Development Program grant for low-to-moderate income residents who wish to update their homes.
The report also suggests using housing choice vouchers, also known as Section 8, that could be used to reduce rent in market-rate buildings for people with lower incomes.
The state also offers a first-time homebuyer assistance program, to which Thompson suggested Litchfield and/or Meeker County Housing and Redevelopment Authorities apply to participate.
The new Litchfield Housing Task Force, which was appointed during the Feb. 6 meeting, will review the 79-page housing analysis over the next few months and make recommendations to the city council for potential future action. The city council has already identified several hundred thousand dollars in remaining American Rescue Plan funds as a likely source for city-driven incentives to develop more housing.
