New Ulm Embraces Innovative Housing Solutions Amid Crisis

Leaders in New Ulm, a city in southern Minnesota with a population of approximately 14,000, are tackling a housing crisis by embracing innovative construction approaches. Recent decisions by the City Council have resulted in the approval of multiple housing projects, including nearly two dozen shed houses, more than a dozen tiny homes, and a controversial 148-unit apartment complex. These initiatives aim to address the city’s significant housing shortage, which has left vacancy rates below 1% and driven property prices beyond the reach of many residents.

Innovative Housing Projects Approved

City Manager Chris Dalton has emphasized a shift in philosophy, stating that the Council is now more open to considering unconventional projects. “We are looking at ideas to see if they fit our community,” Dalton explained. This marks a significant change in approach, especially in light of a recent report by Maxfield Research and Consulting, which highlighted that rising construction costs have largely deterred developers from building homes priced below $250,000.

Among the notable projects is a development of 22 residential “barndominiums,” metal structures that typically serve as storage but will integrate living spaces. Developer Tony Gulden envisions retirees utilizing these units for seasonal living, allowing them to park their RVs while having a functional home. This project is located behind a Walmart on the west side of New Ulm and is set to be developed as a Planned Unit Development, a zoning classification that facilitates such innovative housing solutions.

About half of the housing initiatives approved this year in New Ulm rely on this type of zoning, which, while beneficial for development, has also sparked some controversy. Council President Andrea Boettger expressed initial reservations about the shed house project, stating, “I don’t love it, but I’m not afraid to try it.” The shed houses will require residents to join a homeowners association and acknowledge the industrial nature of their surroundings.

Community Reactions and Future Plans

Not all residents are enthusiastic about the rapid changes. Some have voiced opposition to the proposed 148-unit apartment complex, arguing that the city is moving too quickly and altering long-term plans without sufficient public input. Resident Paulo Pagliari raised concerns that increasing density could negatively impact property values and quality of life due to heightened noise and traffic.

City officials, however, maintain that the apartment complex is essential for New Ulm’s survival, arguing that the need for affordable housing has reached a critical level. Additionally, a separate project for a village of tiny homes, which will consist of 15 market-rate rental units, is aimed at attracting temporary workers such as traveling nurses and engineers. Project lead Steve Brown aims to test the waters with two model homes before committing to the full build-out.

The willingness to experiment with housing types reflects a broader trend in Greater Minnesota, where many cities are adjusting zoning laws and policies to encourage more flexible development. Ryan Allen, a professor at the University of Minnesota, noted that the situation has become critical enough for cities like New Ulm to explore innovative solutions. “Things have gotten critical enough that I understand the instinct to throw a lot of things at the wall and see what sticks,” he said.

Despite apprehensions about the unconventional projects, New Ulm’s leadership recognizes the necessity of taking calculated risks. Dalton noted that the traditional approach of single-family dwellings is insufficient to meet the demands of a growing population. “We have to consider other options,” he stated, recalling his own challenges in finding housing after moving to the city in 2018.

As development progresses, the outcomes of these experimental housing projects will be closely monitored, not just by local residents but also by other municipalities looking for effective strategies to combat housing shortages. Bradley Peterson, a lobbyist for the Coalition of Greater Minnesota Cities, remarked that New Ulm’s efforts will likely serve as a benchmark for other communities across the state.

The success of these initiatives may redefine housing in New Ulm, with the potential to attract new residents and revitalize the local economy. The city’s commitment to exploring diverse housing solutions underscores the urgent need for innovation in the face of an ongoing crisis.