The creation of hundreds of jobs by Cargill, CJ Bio America and other companies means lots of people will be moving to Fort Dodge soon to take those positions. And when they arrive, they'll want to live in nice houses.
But thanks to years of weak demand, there isn't much in the way of immediately available new housing, according to economic development officials.
To address that challenge, leaders of the Greater Fort Dodge Growth Alliance have assembled a partnership intended to jumpstart local housing construction.
The partnership will build and sell four new houses in The Woodlands neighborhood on the city's northeast side. In the process, the partnership hopes to demonstrate to developers that they can make money building new houses in Fort Dodge, according to Tim O'Tool. the president of the Growth Alliance's board.
"Obviously, four houses isn't going to solve a problem," O'Tool said. "What we're hoping to do is help our local contractors see that there is a demand for speculative housing."
"If we see that other contractors are stepping up and building speculative homes, I would say that it is going to be successful," he added.
The construction is to be finished this summer. The Growth Alliance plans to hold a groundbreaking ceremony on June 25.
Last year, the city government issued just three building permits for single family homes valued at $100,000 or more.
The lack of available housing was identified as a problem in the 2007 R.A. Smith study commissioned by the former Development Corporation of Fort Dodge and Webster County. Dennis Plautz, the chief executive officer of the Growth Alliance, said representatives of new and expanding companies have told him they have some concerns about housing for their workers.
"We would probably identify the current housing situation as critical," O'Tool said.
The Growth Alliance established a Housing Initiative Committee, led by Tom Chalstrom, to address those concerns. That panel assembled the partnership over the last few months.
Chalstrom said the partnership includes the Growth Alliance, bankers, builders and a property owner.
He said each member of the partnership will assume a portion of the risk that developers have when they build a house.
Lisa Wilson, of Fort Dodge, will deed to the Growth Alliance four lots that she owns in The Woodlands, according to Chalstrom.
"She was approached, and she didn't hesitate from Day 1," he said.
The Growth Alliance, Chalstrom said, has hired Doyle Construction and Kolacia Construction, both of Fort Dodge, to build the houses. Doyle will build two one-story homes and Kolacia will build a pair of two-story homes. The companies will not build just any kind of house, however. The houses will be built according to guidelines established by the Housing Initiative Committee in order to create a market-ready property that will attract a buyer while they're still under construction, according to Chalstrom.
The construction companies will get their financing from a group of local banks which usually compete against one another for business, but who have joined forces for this project. Chalstrom said the banks have developed a special financing package that will allow the builders to get loan terms which normally would not be offered for such a project.
The houses will be sold for $225,000 to $270,000.
Before those houses are sold, there will be some financial risk for everyone involved, according to Chalstrom. He said Wilson won't get paid for her land until the houses are sold, while the banks will not get any interest payments for the construction financing until after the sale. The builders will have to make sure they don't have any cost overruns, he added.
Plautz said the Growth Alliance will not make any money on the sale of the houses. Any profits from the sales will be shared by Wilson and the builders.