S5:E25 - Rural Housing Data with Ben Winchester

You are listening to the Growing Small Towns Show, a podcast dedicated to supporting you, the person who really cares about the future of your small town. We believe when people get better, everything gets better, and our episodes offer the ideas and actions that prioritize people and small communities. Thank you for listening. We're so glad you're here. Our guest on today's episode is Ben Winchester. Ben came back. It's 'cause he keeps doing awesome data research and then we bring him on so he can tell us all the cool stuff he's learned. Really excited to host Ben today. We had a beautiful conversation about housing. This is something that every single community in every single small town everywhere, at least in this country, seems to be challenged by or somewhat struggling with. And Ben and his team at the University of Minnesota, he's a rural sociologist. He's been on the podcast before, so we encourage you to take a look at the show notes and go check out our first discussion about the rural, rewriting the rural narrative. We are also going to be bringing him back to discuss regionalism because he has some very cool data to support that as a concept as well. But today we're diving into housing. And at the University of Minnesota, he specifically calls out Otter Tail County. So there's a lot of resources in the show notes on this episode. But I think you're just going to find, as I do, that listening to somebody whose perspective truly is steeped in research, and yet the way he presents it is with enthusiasm, passion, intensity, joy. I need people like Ben Winchester in my life because, as I say in the episode, I am quite feelings-based and quite anecdotal. By nature. And so when I get to visit with somebody that echoes a lot of the things that I have either said or felt over the course of my time in this work and know that behind his perspective comes a lot of data and research, it gets me very, very excited. So this is one that you're going to want to share with your local community, the people that are trying to unlock housing ideas. I can't wait to hear what comes out of this conversation for you and your communities. So buckle up, friends, it's Ben Winchester. Well, hey Ben, welcome back to the show.

Hi, good to be back.

So good to have you. So you and I were just chatting. There are so many things you've been cooking. You're cooking with gas over in Minnesota. I'm super excited to talk. Yeah, it's super exciting to talk. Um, so again, I'll just make a note for anybody that hasn't listened to your first episode. Um, I should have been more prepared and looked up the episode number. We'll drop that in the show notes. Notes. But the first time you came to talk with us, we talked about rewriting the rural narrative. Narrative, excuse me, just this conversation about how are we as people that live in our communities talking about what it's like to live here. That was a very popular episode. People really ate that up because I think anybody doing the work of community economic development, chambers of commerce, all of that work, city councils too, right? You're out here trying to promote, trying to get things to happen. And if the people that live here, every single time someone moves here, we go, well, like, why, why do you, why do you wanna live here? You know, with that face, like, that's right. The worst place to live. So your work, um, has already been super impactful, but let's talk about, uh, transfer of wealth and housing and what you're learning from, um, this research that you're, that you're conducting now over in Minnesota. Yeah.

No, that's great. We do. So for the past 3 years, we've taken on doing these, what's called a transfer of wealth study. And Don Mackey and Deb Markley with Locus Impact Investing have done these studies for decades here and really developed a good model to help understand how much wealth is going to transfer. And why do we need to understand that? It's because we have a demographic bubble, and that is the baby boomers, right? So when you think about the demographic snake, there's the baby boomer mouse that's working its way through the snake. And that baby boomers are— the baby boom generation is huge. And I think part of the arguments, even when we realize kind of this aging population, is that when these folks pass away, our kids, especially in our rural communities, are less likely to live here. So what does it mean for our rural communities when we've had this wealth generated in our communities, by our communities, for our communities, and then it leaves town, right? That person passes away. So over the years, uh, we've had a significant interest in the foundation world, especially Nebraska kind of took the lead on developing a strategy around at the foundation level. So encouraging community activity around a theme of abundance. And Jeff Yost is a rock star for— in the community foundation world. He has been running the Nebraska Community Foundation in this kind of— in the alignment with these transfer wealth studies to incentivize local action. And they set a goal of 5%. What if we were to capture 5% of the wealth that's looking to transfer over the next 10 years, 20 years, whatever that number is that they come up with a goal. And so they did. And they've set these markers at the county level. They help establish affiliate funds, or they're a pass-through for communities that want to just have a fund to draw from. So they've been doing this work around people recruitment, community organizing, like you name it. This has grown Nebraska in the civic sector in a way that many other states do not have that opportunity. So they've been using this for a long time. Other states have replicated this. Kansas, I mean, you name it. We've worked with now with Iowa, North Carolina, and Idaho, and everybody seems to take on this 5% thing. Like, hey, 5% seems to be a good goal. Let's try to capture 5% of this. So what we is with this aging population is that there's peak death. We have to talk about death.

Unfortunately.

The grain of rural. Yeah, the grain of rural from 20 years ago is now the dying of rural. And we're seeing this in the most rural counties in Minnesota that have the highest death rate. They now have the highest in-migration rate. And why is that? It's because our homes are filled and they're filled with older people. The grain of rural again. So even 10 years ago, like almost 3/4 of our homes are owned by baby boomers and older. And so our people keep aging and we do have people moving in as people age out, like we do have people moving in. But that's the biggest constraint right now is this relationship between the aging population and the housing stock that we've got.

Right.

And I will say like housing is a very popular topic, as you know.

Yeah.

I mean, really.

And the biggest problem everywhere.

How do you have a negative narrative if I can't find a home to buy?

Right.

Like, how does that— doesn't make any sense. Like, our homes are in very high demand and have been in demand, not just since the pandemic and not just in the 2010s and not just in the 2000s, but all the way back to the 1970s. So this is that brain gain trend I talk about. There's been a consistent pattern of people moving in in their 30s, 40s, and 50s. But again, you may have a narrative in town that your best days are behind you. And then the older people in town, as they're looking to give in community, is like, I don't know, this town's dying. I think, what would I give to my poor dying town?

Right.

Well, once you put newcomers in front of these older populations, you see there's continuity in your town. There's succession going on. There is success every day. And I think, again, it gets back to that really rewarding feeling I get when I talk about this and bring this to communities is I have people all the time that say like, I knew we weren't dying. Like, yeah, you just need to provide the arguments and the evidence behind it because a lot of times that narrative again is not only written by ourselves but by those outside of our communities.

Correct.

And so now how do we deal with that as well? So now we have this transition coming. Peak death here in Minnesota and a number of other states is 10 to 15 years from now. And so our idea here is to provide some research base to show that you have wealth. And I think this is the number one thing we see in this data is like Well, while people may be distracted by the trillions, and there are massive inequities in this country, but do not let the trillion of inequity distract you from the millions you have in your town every day and the ability for you to capitalize that and solve your own problems. We are not working and have not worked from a savior approach in our rural communities. I'll remind our local leaders that you're still here despite all of these challenges and all these things and these artifacts of the past. And there's the boarded-up grocery store, but your homes are still full. People still move into your town for hope and opportunity for what they see be today. But now we get back to continuity. What kind of shape are the homes going to be in when we have this older population that does very little to keep their homes up? By— not by choice, but by happenstance of their economic circumstances. So meanwhile, every year it costs more and more for them to even live and feed themselves, much less take care of their home. So now I do have a deep concern for the condition of this housing stock as we transition from one generation to the next, right? So part of my bigger topic here around tying those two together is There is a lot of change coming. This is an opportunity for us to have succession plans for our community, right? For our home, not just for us, for our businesses, but for our leadership positions too. We need to talk about community succession here. And this is the broad stroke I use. And again, when we want to talk with people about the future of our community, you need to incorporate all the voices in town. And in many ways, I like to just think of a mural. Like if everybody had a sliver of the mirror, what would you paint on your sliver? And it would go from oldest to youngest and everybody has a different view. And most— more than likely, the people moving in love your place. And that is the narrative I need to bring to the entire community. And so a lot of times they'll be like, oh, that's just Ben Winchester. Of course he's positive. He's like paid to be positive or whatever. Like, I'm not paid to be positive.

You're, you're, you're paid to find the data and the data encourages you. It's encouraging data, right? So, I mean, maybe in a way, but you're, you're paid to tell us what you find, right?

And you, I have the same reaction, like I knew it. I knew it. Yeah.

You're, what you're finding is encouraging, hopeful, and positive. So, I mean, what a win, right?

Yeah. And not being Pollyannish, right? There's good reason to be Pollyannish. It's because there are, there are great things happening. Right. It's just, it's very slow right now and it's very slow. It's a slow churn of housing. And when you have a very full housing stock and we are waiting literally for death to open up that house, like, that's very slow. So there is a change. I will say there's been a big shift, like we thought this housing was going to open up 15 years ago. And why? And this is the one I've got a graphic, I'll share it with you that we can put a link up here. But it really is historically every generation before this one once they hit the age of 67, would start moving out of their home. Like, once they hit 67 to 70, like, they're starting to move out of their home. Up to 20 to 30% would move out of their owner-occupied 4-bedroom, 2-bath place into something smaller— apartments, condos. You want to be closer to your kids, you don't want to take care of your lawn, your patio homes, all those, right? But, um, this latest generation is not moving over at all.

And why? Why?

Because all of the move-over housing is currently full. Right, already and waiting. So right now we have a grand mismatch. And that is— and you— and I'm not even talking about continuum of care. You have a mismatch there too, where you have people who should be in nursing homes in assisted living, and now you've got people who could go into assisted living, but they're all full because it's occupied by the wrong people. And that 30% want to move over and they have nowhere to go. And we've literally watched communities build patio homes. Like, hey, this developer says, oh, I heard what you said, and we put up these fourplexes and they sold the moment I broke ground. So I put up 4 more and then those sold. He had no idea. Like, I didn't even know this move-over thing was like really a good market. So this is right now actually causing a tension because many of these move-over homes are smaller footprint and are many times intended to actually be there for early household formation, young homeowners. And now that's being competed over by these older adults who have the capital, the cash, the equity to just move right in and dominate that market even more. So it is really— this is the inhibition of our market. It's very slow and churns one house at a time. And here in Minnesota, Kelly Ash with the Center for Rural Policy and Development does a lot of policy research. We found that the most rural counties that have the highest death rate now have the highest in-migration rate. And why is that? Because it is— that is how homes open up right now.

Right.

Aside from the general movement of people. So if you're doing resident— if you're doing economic development and you're trying to bring in labor and you don't recognize that housing is the great inhibition, then you actually blame yourself for other things. When you talk about your community having a labor shortage without a recognition of these other trends, you say like, well, we're not paying enough. Maybe like, right, are people moving here? We're not paying enough, I guess. Or maybe our community is not attractive enough. Obviously we have this labor shortage, nobody wants to move here. That's not it. Go to Zillow, go to Realtor right now and see how many homes are on the market. There's not very many. But then I go to look at how many saves There are on each of these properties. If you think your community is not in demand, look at how many saves you have for these random properties in small rural communities.

Right.

And even if you have like a small conversion rate on that, it still means there is desire in every community. So this paints a picture of how do you find a home to buy? You better know someone. And that is what we found out is that 40 to 60% of home sales right now and even before the pandemic, this was true, were not arm's length transactions. Connections. It was especially related to this generational transfer. It was like, hey, Rebecca, I know your mom is looking to move out. We've always loved her house. We're going to take you out for supper tomorrow night. And bam, bam, bam, that house gets sold.

Yep.

Those— these are the types of non-arm's-length stories about how housing gets found and located that you can't just expect economic development-wise to show off your job and then have people show up. That's not working. And why is it not working? Because we need to stop creating jobs. We need to bring in people. And how do you bring in people? You produce housing. And that is the answer we have here in Minnesota. So we do these studies about the economic impact of housing right now to show if you were to build an apartment or a twin home or a single-family home, you get massive economic returns from that, not just from building it. I don't even care about building a property like that. That return goes away after a year, right? You have your construction folks do all that. But then when it's habitated, when it's actually occupied every year, an apartment where somebody's making $35,000 a year creates at a bare minimum $29,000 in economic activity every year.

Yeah. See, those are the kinds that, yeah, those are the kinds of things that, again, I think we were talking about this. I, because I think what the answer, the question that everybody has is like, well, what should we be building? Like, that's the question that everyone wants to know. Like, what if you think about, cuz I think you're, you're, you're, this feels And I told you, like, I love that you bring research and I bring feelings. It's fine. We, we blend beautifully together, Ben. It's a good thing. Uh, but this idea that I, you know, I can feel into the fact that what you're talking about is true, you know, especially I think it's super fascinating and it makes me wonder why people are staying. Well, the, the reason why is because the, the transitional housing isn't there. It's not a choice, but the reason—

many other factors too. We have an entire age-in-place movement. That is encouraging people to not really even think about it.

Yeah. Which is— well, it's super interesting, you know, that, that, that because it is, it's like my— I think about my parents there. They built their house and they were older than 67. They were older than— they were older than the age that used to have this transition out. And they built their new home in town past that age. So you can definitely see that happening.

30%. That want that move over. I am not trying to kick people out of their homes that have been legacy for 3 generations. Right. You know, and I do have people stand up and say, you're not kicking me out of my home. And I say, I'm not talking about you. Yeah, I'm talking about your neighbors. And because you don't know everyone and around this housing topic, there's— I do a fuller presentation on moving in, moving out, and moving over. And the idea and the premise I've got is right now we have an older population who has a policy of best intention.

Adaptations.

And that is, I'm going to live in my house forever. And then we make these adaptations to allow us to live in this forever, even though we don't go upstairs anymore because we can't. And now we're just going to live on the single floor. So meanwhile, we put on a ramp and we update the bathroom. And then 2 years later, I need to move my mom out because my mom's like, oh, something happened. I can't live in this house anymore. And then the real estate agent may say, like, man, Ben, I would love to sell your mom's house, but you have a knob and tube wiring in that. Like, you can't even get insurance on that today. So you got to swap that wiring out and you have peeling paint and there's no first-time homebuyer eligibility if you have even a flick of peeling paint on that home. So let your mom know and just work together and get your electrical and that peeling paint done and bam, bam, bam, we'll sell this place. And then my mom's like, what? That's going to cost like $25,000. I just spent $18,000 on the ramp and updating the bathroom. Mm-hmm. That ramp and the bathroom were not equity builders. They were livability expenses.

Correct.

And so now I think about the amount of investment we make in livability expenses versus equity builders, and then that equity is lost at the time. So this policy of best intentions, which is I want to live in my home forever, doesn't end that way. But 21% of the time, like majority of time, people have to move out. So I am— I have to be upfront about like what's realistic for you. And I think I work from a different perspective. Like I had back surgery when I was 24. 27 or 28. And I kind of realized early on that your body just can't drag your— your mind just can't drag your body around, you know? Correct. And right now we live in a multi-level split. There is no way I see myself living here if my back were to fully permanently in any way go out. So the policy of best intentions, why I love this house so much, has to hit a realism in terms of that balance you make in terms of your life, in terms of the equity of that home. Thinking about this home as a future for someone else at all, thinking about how you can build movements in your community to even recognize this trend. And how do you then build support for people that want to have that move over? We're doing it up in Thief River Falls, Minnesota right now. We've done focus groups of people who moved recently by choice, focus groups of people who moved recently not by choice. There is a distinct set of groups. The people who move by choice, it takes you 12 to 18 months. When you're like, "Hey, I'm going to think about moving." How long does it take? 12 to 18 months. You don't do this in a month. So then all of a sudden you got to figure out what to do with your stuff in the home. And you look around and then you realize that the housing market isn't just wide open. You can't just choose where to go. We're going to sit around and wait like, "Oh, there's that 3 spots there. I'm going to have to wait for that to open up." But meanwhile, if you're in the policy of best intentions, something happens and bam, bam, bam, you got to move in 2 weeks. Do this thought exercise yourself. Imagine your mom lived in your home and you had to move her out in 2 weeks. Where does she actually physically go to live in your community? And I'll bet you it's not in your town. It might not even be in your neighboring town or your county if you're in that short a time frame. So, I advocate for— do not— like, I'm usually a positive narrative person, but here I like to lift up the stories of disaster where you don't have choice, you don't have control. The research is clear why older adults do not consider moving, and I'm not talking about moving into assisted living.

Right.

I'm not talking about moving into any nursing homes.

I'm talking about there's a continuum of life before a continuum of care.

So the continuum of life housing is what we want to fill in here. And so when we ask folks like, would you prefer to live in your house or live in your community? It's always community when it comes down to it.

Interesting.

So age in place is a redefinition for us.

That's a tough, it's a tough set of conversations. And I want to actually ask like how from a community standpoint, Like who, who gets to poke that bear? Like who gets to have that conversation? Because, you know, ideally I think even these, these ideas would be, it would be helpful, practical, smart for families to engage in. Obviously that's, that's where I think ideally this conversation would land and you'd start having those conversations before health starts failing and all of those things. That's right. Um, but when that's not happening, because I think one of the things that, um, when we had connected and we were preparing for this coming, you had sent me some things and I hope we can get into some of those documents because there's some really interesting stuff that you guys are doing in Minnesota. But talking about this idea of transitional housing, how we have this conversation and the idea of private properties and public interest, that's, I would love to get your, you know, because again, a lot of people that listen to this are community economic development folks. Sometimes they're just people that that really care about their communities. And, and I, you know, I live in North Dakota, Ben, so we have really conservative values. Um, there's this fierce independence of what my home means to me from like the pursuit of life, liberty, and free, you know, freedom and all of those things, right? But there's also then for all of us in community and economic development, housing stock is a public interest. It's a public good. And so how the heck do we navigate that if we're not in the family? Like, yeah, do you have— I mean, I just, I, I struggle with it, right? Because I see it, I understand it, and at the end of the day they get to just look at us and be like, yeah, well, I don't care, right?

No, I mean, which argument do you have to support housing for people? You know, generally, like, you can make it a moral argument, then with some audiences that works. Um, but in many of the more conservative audiences I work in, I need an economic argument here that there's a private benefit to public actions. So this is the public-private rub that I always look at. And so, um, I just start with the premise that number one, nobody is truly responsible for all the housing in your town.

Yes, great point.

Like your Section 8 homes, your HRA is responsible for your Section 8 stuff, and they have a huge shining light on them. But I mean all the other homes. Like, what happens if a house goes out of stock? Like, what's the impact of losing a home? So we've done these studies the other way, which is what's the impact producing a home, right? You build a home, you have a huge economic impact. But if you have a single-family home with somebody making $150,000 or a household making $150,000, you're producing almost $100,000 in baseline economic activity every year. So Otter Tail County, Minnesota, has been developing housing using public funds, public strategies. Same, same strategies we use to invest in our private industrial parks are being used to invest in housing because again, the shortfall of economic development right now are residents, our actual workers. And so how do you produce workers? You need to bring in housing for them to live in. And so now we see that there are not— it's twofold. One is what, what's the impact of losing a home, right? What's the public cost of private inaction? What happens when you have a lot of people doing nothing to their homes and all of a sudden homes go off the market and they're sitting for 3 years? Well, we know from our economic impact analysis, a single-family home produces almost $100,000 a year in economic economic output. So, if that home sits in somebody's estate for 3 years battling issues, you just have a massive sink on your economy right there.

Right.

If that house sits waiting to go through foreclosure and then it gets foreclosed on, goes to the state and then to the county and then to the city, and 5 years later, you spend another $7,500 to demo it, like all of these costs put together. But again, for every year that sits, that's almost $100,000. In economic output that you're losing. So there are real private benefits in public action. And why do we need public action? Because there's no private market here. There's no general private— we have market failure in construction. Mike Rowe would tell you every day there's 5 people retiring and only 2 going into the trades. We have such a massive shortfall in this entire industry that we need market intervention. The same way that we had market intervention to give us electricity and phone in our rural communities is needed now to ensure we're going to be able to participate in the future here. So for me, it is around this. When nobody is responsible, just let people be responsible. So I talk about, you have a great starting point is a home rehab program in your community. Do number one, free presale inspections for anybody over the age of 55. So that way, when your mom looks to sell her home, there's no surprises like, oh, I didn't know that was there. So free pre-sale inspection, just to give people a heads up. Now, people are very, you know, private too, so we need to make sure they're not, you know, putting their house at risk. They're like, oh, I got those bare wires downstairs, I gotta go, I don't want to be— whatever. We need to just ensure our house— that housing stocks are going. So then, talent pipeline, getting your high school kids, shop teachers, getting people involved and engaged in these homes to repair things. And I have a main premise here, which is you do not need to be an electrician to change out an outlet. You don't need to be a construction person to put up sheetrock. Like, we have— I love home rehab. These are lifelong skills, and you get these. So, on one side, you can have Talent Pipeline, and I tell kids every day, you go into the Talent Pipeline, you could be banking it after 2 years, making more money than any of us.

Correct.

Trades are in such short right now. So, that's on one side, is what if you were to develop a home rehab program for your community, and what does that look like when you have people helping each other? I work from the assumption that it's the hive Everybody in town that has tons of knowledge about how to do home improvement. I don't need an electrician or construction or the folks that we don't have, right? But my dad knows a ton. And actually, I don't. My dad passed away when he was 39. I was 19. I really never got to know him. But he was like a car repair person and a woodworker and could make and build just about anything. But I was a cocky little kid, never got to know him, right? So I didn't have any skills. I went to college. I went to school in Morris, Minnesota, and I got a job at Amoco. I was like, oh, wouldn't it be nice fixing cars to have my dad around, right, to learn all this stuff? But I'm big on like apprenticeships. Like, I go to people, I want to learn how to do it. I'm going to watch them, and I'm going to stand around them and like sit by them. Habitat for Humanity does that. You want to learn how to put down LBP, sheetrock, flooring, all that? That's great, but those are for new builds. The house I had in Hancock was 100 years old, more. It had no 90-degree angles. You're not just putting down LVP, the floor is all crooked. Like, how do you do that? How do you put down self-leveling concrete? So I am all about like, how do you build, offer classes in your community through community ed, through your lumberyard, through Ace Hardware, get a, get a whole home rehab program. Again, nobody's responsible for it, so take responsibility for these homes to ensure these homes are going to remain in the livable world of your community.

Who's, who's paying for it in these examples?

Like, what is the price of doing nothing? Yeah, I would go back to what's the cost of doing nothing. And if you were to invest $10,000 in your community and incentivize this, you're building your future, right? It's an investment. So we do, I convene this return on investment in housing. Trying to look at what's the return on investment. How's it— it's massive. And so this— when I talk about a $195,000 return on a household making $150,000, that doesn't even include all the direct and indirect funds. So we'll put a link here to the webinar, full webinar we did on this.

That's fantastic.

The idea here now is like, if we're priced out of building a home by $100,000, like maybe we just use some public monies for this or other sources because we get that money back in our local economy in just no time. Our economy is massive, and the housing is the very first step to produce economy.

The Growing Small Towns show is recorded locally at the Growing Small Towns podcast studio located in Oakes, North Dakota. It's produced by Pheasant Canteen Studio in Aberdeen, South Dakota, with marketing support from Cassidy Johnston in Canyon City, Colorado. Our intro music was created and produced exclusively for Growing Small Towns by James Bergman, singer and songwriter from Fargo, North Dakota. Local and small, it's what we support and it's who we love. Get your community a shout out on the podcast. Call 701-203-3337 and share your small town success that you just don't feel is being celebrated quite enough and let us shout you out. You can also share your biggest people challenge and we'll dedicate an episode to offering ideas to help. Hell, you can basically tell us anything and we'll do what we can to answer. We can't wait to hear from you. Today's small town shout out is to Stratford, South Dakota, where Christy shares that her biggest source of pride in the community of Stratford is their community theater. What a cool way to bring together people from all different parts of the community and to celebrate something like theater. Fantastic, and way to go, Stratford. This is— I— oh my goodness, I have a bunch of people I want to— I'm going to want to send this episode to directly. Like, please listen to this, because, because— okay, so I, again, I'm gonna— I'm going to— I'm not playing devil's advocate, I'm just going to say one, you know, one or a couple of the things that I I know I have actually heard. And one of the things that I feel like I hear when we start talking about public funds, right? We start talking about whatever that looks like, whether it's sales tax, if you've got, if that's what funds your economic development or, you know, it's some other set aside. But it's what I hear is why, you know, why should we have to do this now? We've never incentivized housing in the past, or, you know, how do we, how, you know, this idea of fairness. And equity in how public funds get distributed. Um, I know what my answer to that is, but again, um, sometimes it's nice to have somebody smarter than me say the same things, but with more data behind it. So how do you answer that? What's your, what's your response to that, Ben, to help people kind of understand that yes, we're doing something we've never done before and it's because why?

Modern tools re— or modern economies require modern tools. We're in a different world. This is like we are in literally the fourth wave of economic development. Steve Deller talks about this out of Wisconsin, and he talks about like first wave is industrial attraction, right? You want to bring in a business. And then the only motivation for me to move to your town is if I have a job there. That's first wave. Second wave is all about entrepreneurship. You're growing your own. You do this. A lot of communities do this like we are. Think of how many businesses you have in every one of our towns that's locally grown. And that's because we had strategies and our communities help encourage that.. And entrepreneurs don't grow themselves always on their own. They're done with the help of our communities that they live in too. Correct. So entrepreneurship, second wave. Third wave is around cluster. And it is like Wisconsin cheese or the medical industry in Minnesota around Rochester, right? You have clusters around different specialties that you have, uh, agricultural specialties in the Northwest. Like you've got a lot of different variations, but it's around the idea that you work in this kind of region and then you've got clusters around certain economic activities. The fourth wave is literally like, stop creating jobs, we need people. And it's called resident recruitment. And so now how do you actually bring people in in a tight labor market? Like, not only does your community need to be welcoming, but you need to help them find housing. And I say they need to be welcoming because it matters. We've done this research. It's clear. If you say that the community you move to is welcoming, 86% of those households say they're going to be there in 5 years. But those households that say the community they moved to is not welcoming, now you're at 44% say they're going to be there in 5 years. Now you have a huge retention issue. Are your business owners like ready to deal with the fact that your community is not very welcoming and having to turn employees over all the time? There's a distinct direct tie here. We need to move away from the warm body approach of labor and realize that these are people that live their lives that we need to help them connect to. So while it's one thing to walk into a shop floor and say like, yeah, here's the tools you've got and here's your pay and benefits benefits that we're going to provide you. But the moment you leave that shop floor is where you make your decision.

Correct.

So what happens at that point? So now we're at resident recruitment. This is the fourth wave. And this is what we're hot into across the country is trying to better understand all these dynamics related to how people are moving. But right now we're just inhibited by the inability of these older people to move over. You want workforce housing, you have it. It's currently occupied. Yeah, you have it. So these housing studies too, you need to ask for more. They don't do this cohort analysis to look at like who's in the wrong place at the wrong age or whatever. Like it is, it's a complete mismatch right now. And so the clunk clunk of the wheel around on the churn of housing is very slow and clunky. And if you don't recognize that inhibition, we just, you know, you're working on economic development in a world that doesn't exist in your community. Yeah, there's all these other dynamics. So modern economies require modern tools in that. And we like to think we're producing that and trying to produce like Here's the efforts. Here's the payoff that Otter Tail County has seen.

Yeah.

From their public efforts.

Yes. So let's talk, let's, so I, I have one question, one question to follow up about all of that before we kind of dovetail right into Otter Tail County, cuz I'm very excited for you to share what you've been seeing and, and just truly the bold strategy that they, that they took on and the results that they've gotten. Um, but here's my question. So what is the modern tool to activate? Is it, is it, is the modern tool, uh, opening up conversation? Like, okay, so, so what if, if I was just, I'm just a person, I'm just here. I don't even, I'm not even officially in charge of economic development in my community anymore. Um, I still care deeply about it, right? So let's say it's me, Ben, uh, here in Oakes, North Dakota, 1,800 people. Um, where do I start? With how, how do I engage my community? Do I go, do I look at my— so I'm asking a bunch of questions, but like, do I, do I canvas my community and say, okay, and identify every house where I feel like I perceive a mismatch? You know, and obviously the answer is that I go knock on their door and say, hey, Jean— I'm using that name because it's my mom's name— so, um, hey Jean, I think there's a mismatch between your age and your, and your property. Could we have a conversation? Like, obviously that's that's not the answer. But so what, what is the answer? What would be a, um, a generous, gracious, decent, thoughtful, and compassionate way to like start this conversation? What does that, what does that really look like in practicality?

Well, one thing we did in Thief River Falls, for example, is we did convene people in this age group, and we had a number of almost 100 people sign up because they were feeling seen. And again, I think our point here is this is an entire population that doesn't get seen by economic developers because they, they're not in the workforce, to be honest. And people are like, well, I just care about folks in the workforce. Now I need to make the economic argument that older people are worth keeping in your community. And that's where I get into things like transfer receipts. Our old-age Social Security, Medicare, and Medicaid, and they currently drive a quarter to 40% of all the income in your community.

Right.

And so, when I think about like education and health services are driven by these transfer receipts in many ways, so especially health services. So, part of this is I like to, as a community developer, I think a lot of times we're trained in doing like, hey, we need to get everybody on board. What can we do when we do that? And then we'll do some, you know, like consensus building. And now I am not about consensus. I'm about the army of the building. Yeah, you got a group of 5 people that are willing to do things.

We're just—

and Becky McCrae with Small Town Survival, she talks about this. Yes, all the time.

I literally— that you— this— I got really excited just then because I want to hear this come out of the mouth of somebody smarter than me, because it feels like sometimes I feel like I'm screaming into a void. Um, this consensus building, it then— and everybody loses their momentum, everybody loses their spirit. Nobody wants to attend 10,000 meetings to build consensus. And the best stuff in our communities happen when a handful of people come together and say, let's do it, right?

That's right.

I love that.

You're like, call it the willing, and you got to be approachable. Thinking about doing this, like, you got one person who's interested as a shop teacher, like, man, just work in that area. It doesn't have to be huge and everything. It can be small. I mean, getting back to the home rehab thing, it is like offering discounts on your outlets through your Ace Hardware or whatever that is, lumberyards, uh, partnering offering classes in rehab. And again, this doesn't need to be by everybody. It can be people that have knowledge like me who spent 20 years fixing up my home. And I'll tell you too, like, people love helping and people are also very cautious when it comes to their home. So I did, I started a subreddit on Reddit about home improvement from 500 people, whatever, 14 years ago and now has 4.6 million people. And why is that? It's because anybody can ask anything. No question is too stupid for us. Right. Yeah. Like, where's my water shut off? I mean, you don't know. You own a home. It's anxiety-ridden at times.

Yes.

You don't want to have it wrecked. This is your greatest asset. So how can we build upon that love you have to help you learn the skills you need? And the earlier you can do that, the better. Because people are like, oh, our aging housing stock in rural, like, no, update it. Like, it really is updated. And like, look at the homes on the East Coast. They're 250 years old, folks. And here we are complaining about our 75-year-old homes. Like, right. There's some context for me here. So that is all about you find areas of activity around that. But you have a lot of knowledge, and especially when you have a lot of older people who've already done this. But is there any network? Is there any way to mobilize, capitalize, like engage and direct this population of people who would love to do this. And this is community pride at its best.

Yes, sir.

And this is where now it's continuity. You're getting your kids involved in your older folks' homes. There is your, you know, bonds will be passed at a higher rate when you have higher levels of community engagement and intergenerational engagement. All of this matters. And this comes back to me again, a succession plan. Do you have a plan for the succession of your community, or do older people think that once I die, this town's done? Because there is a narrative out there.

That's right. That's right. So, okay.

That for me is just find a way to mobilize and identify where people are already active and just build it, capitalize it more. And you might have a local community foundation. You'd be amazed at how far $250 gets you in idea stimulation.

Correct.

And it's generating partners and it's generating courses or education, but it's not super complex. It's just caring for your homes. Yeah. And to ensure that the people that are in them can retain their equity. And then at the same time, one other piece, and I'll end on this, is that when nobody cares about all the housing in town, then what happens if somebody that's in a house is actually eligible for all these home weatherization programs? There are programs out there.

You bet.

For insulation, windows, like all that stuff. But what happens if nobody's responsible and I don't do anything and your mom I know is eligible, but she doesn't do it. Then what happens when she goes to sell her home and we find out it needs all this work? And then me moving into that home, we're like, I have to spend another $60,000 on this place because nobody cared about this housing stock and recognized that the previous occupant was eligible for a 60% to 70% grant. Mm-hmm. But nope, now I am having to pay for that.

Right.

Again, what happens when you look at the totality of your housing stock, its condition, and its potential for transfer? So this is where people do love their homes. Like, they want to share their— what they love about it. This really is a passion of stories for me. The data tells one thing, like there's a transfer, right? There's people are unable to move. But once I start prodding the questions, it opens up this whole plethora of education and research, more research that could be done out of that about why aren't people moving. Like, there's anxiety and fear in the unknown and all that, but then like all of these reasons why people don't move become exacerbated when you have to move.

Yep, when you're forced, for sure, for sure.

So okay, yes, that's my point, to be concerned about all the housing in your town.

Yeah, well, I love, I love it. And I think, um, let's, let's circle back to Otter Tail. What is Otter Tail County? What is Otter Tail County in Minnesota? What What have they been doing? Because you've got quite a story there.

Yeah, they do. You can Google them too. But I don't know, maybe 7 or 8 years ago, we had done a lot of rural narrative work up there. And some of their county commissioners and administrators had heard that about like, hey, the only way kind of you're going to grow is if you build housing and you bring in people, right? Because right now it's older people and they don't have kids and our school enrollments keep going down. And like, what does that look like? So they hired and they posted a position for the nation's first, I believe, Rural Rebound Initiative Coordinator was the actual title. And so they hired Eric Osberg. He used to be a sports guy for the TV station in the Twin Cities.

He's been on the show. He's been on our podcast. Yes.

He's so great.

Yeah, he is. He's fantastic. He's fantastic.

I love his main line for me is like, people don't want these polished commercials. We go out of our way to avoid commercials. Like just document what your life is like in this town. That's what people want. So anyway, they hired Eric. He had done this work. They do a lot of marketing, visibility, just lifting up the voices. And then that became so popular that they realized housing was the crux. Like the only way to actually grow in your population is to improve housing. Because on average, when you have an older population, the average household size keeps going down a little bit as people pass away.. So your overall population goes down, but your homes are still full, right? With one person now instead of two. So anyway, that is the dynamics. We talked about that, and they set a goal. Then this is the county. This is rural Minnesota. They're a fairly recreational place along the interstate in western Minnesota.

But very— what's the population? What's the population?

I don't know. Yeah, 30,000 to 40,000. Maybe that's just going to be in the Fergus area, but it's actually a very large county. Geographically larger than our typical counties in Minnesota. So pretty large. But then they— the county commissioners said, we're going to do it.

We're going to—

we're going to start looking at housing. We've got a market gap here. We need to put all these pieces in place to ensure we even build housing. So then they hired a community development director and then they hired somebody to run the— they called it the Big Build. And their goal was to build or improve 5,000 homes by 2025. This was in 2021. When they started. They didn't make it. They only got to 3,000. But still, Otter Tail County—

that's the only county in the state.

Yes, it was great. And Otter Tail County now is the only county in the state that grew its population. So this is how you take action. And so part of our analysis for them was to just support these public efforts. Like, this is the public doing all this work and they're seeing massive private returns. So again, there's this interrelationship between recognizing like what is public and what's private. And where is the private gap? Where is the private, you know, where is the complete absence of market in many cases? So, this is where when we take action, you see a return. And this is where I'm not going to wait for the private market to hopefully build a home in these towns. They have to take action. And they're building that ecosystem. They're doing everything from land acquisition to the sales because they recognize again, again, um, that market is weak in rural communities. And how do they, how do they deal with that? They have to take action because, again, this broader world is going to impact your place, and all these trends impact your place regardless of whether you do something or not. So the differential that we see is when you have globalization and these global trends impacting all of our communities, what differentiates one town from the next or one county from the next? Social capital. It's how well you work together.

It's the magic.

It's not even magic. It's like, it's the number one reason It's the secret.

It's the sauce. And it doesn't have to be a secret, right? Like it literally, yeah. People think it's a secret, but it's, you know, I, Ben, it's been too long, uh, since I had you on. I'm so grateful for this conversation today because, uh, again, there's, there's so many things, you know, I've, I've been in this work now, work kind of community development, broader community development work. My background's org development, right? So I work with companies with this, this concept of this transfer that's happening. So literally just the last 2 days I have presented on this generational shift that's happening in the workplace, right? So by, by 2030, just 5 quick years, 75% of our workforce is going to be millennials and younger.

Yes.

Okay. So that's happening in the workforce and I'm saying we're not ready for them and we can be, and there's things that we can do. It's the exact same conversation cuz that obviously is impacting our communities. And so So I appreciate so much that you're bringing such a data, like a data-centered, uh, lens to this. And yet your passion, your kind of no BS, like this is just simply, there's solutions, there are things we can do. Again, that idea, if nothing's happening, step up and do something. Find people that are interested, find people that are, and that, that exists in every community. Yes. Because if your community is still up and running, those people are in your town. So what if you— yeah, what if you, you know, link arms and what can you get done? So, um, I— we've already decided that you're going to be coming back, and we might as well tease out what that topic is going to be because you've got some really fascinating data about regionalism.

Yeah, that's right. Um, I think the big question here is which way do the wagon wheels turn for people? And I, I look at how we how we connect where we live and work to where we shop, play, and recreate. And we live in these vast regions. And so I, I use the narrative around living in the middle of nowhere to turn the dot's head and say we live in the middle of everywhere, and then use data to show the extent to which we actually live in these broad regions and live across communities. And so there's a complexity of rural life that gets unseen, and I'll introduce the term called sonder. And that is when you recognize that life is massively complex. And I think that every time you pass by a car, there's a huge complex life passing you by. And the fact that we can sit here even talk about how life is organized perplexes me every day that we can understand some organization to life at all.

Yeah. Oh, sonder is one of my favorite words. I love that you just brought that up. So, Ben, we're going to make sure we chock-full, like the show notes will be chock-full of links, resources, all the things that we've talked about. But I just can't, I can't thank you enough for the work that you're doing, the way that you're doing it. People like Eric, we might as well give Eric and the whole Otter Tail County Commissioners a big shout-out because we need, we need to see examples like this. A, to know that it's possible sometimes, and B, to have even a somewhat of a guide, guide or a roadmap to follow or a place to start. And you've given us a lot A lot to think about today. Thank you so much for everything that you're doing and continuing to remind us that being rural is cool.

Yeah, it is. Rebecca, you're the best for bringing this message out to everybody. I so appreciate your kind of job in our rural development industry here, both at home and across the nation. So thank you.

Hey, we'll have you back soon, Ben.

Okay, thanks, Rebecca.

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