Photo by Deb Gau A modular home waits to be installed at a lot on Ellis Avenue in Marshall on Friday. While there has been some housing development in Marshall in recent years, it hasn’t matched the demand estimated by a 2021 housing study for the city of Marshall.

MARSHALL — There’s a need for more housing in Marshall, whether that’s single family homes, rentals or senior apartments, a 2021 housing study said. But while there have been some new housing development projects in Marshall in recent years, there are still challenges to meeting the community’s needs.

“We continuously seek opportunities to add all housing types to our stock,” said Marshall Economic Development Authority Director Lauren Deutz. “Unfortunately, the cost of development has created significant barriers, especially in the single family and affordable housing markets.”

A 2021 housing study done for the Marshall EDA found a demand for up to 140 single family homes and up to 191 rental housing units in Marshall by 2030. Since 2021, there have been 37 single family homes and 87 rental units built, Deutz said. However, another 164 units of rental housing are either planned or under construction, she said.

Factors like rising costs, inflation and changing interest rates all have an impact on housing availability in the area, Marshall area real estate agents said.

Housing is one of the resources that can have an impact on economic growth, Deutz said. In 2021, the Marshall EDA took a more detailed look at local housing needs, through an analysis completed by Maxfield Research & Consulting, of Roseville.

The study analyzed housing demand between 2021 and 2030, and broke down the amount and type of housing that could be built to meet Marshall’s needs.

The study found a demand for up to 140 single family homes and up to 60 townhomes in Marshall between 2021 and 2030.

The study recommended that about half of the single family development in housing be priced at about $175,000 to $240,000 in 2021 dollars. Adjusted for inflation, that’s about $215,000 to $294,000 in 2025.

The study found a demand for up to 108 market rate rental housing units, including both apartments and townhomes. Additionally, the study found a demand for up to 83 units of affordable rental housing.

The 2021 study also looked at the need for senior housing in Marshall, and found a demand for up to 335 additional units of senior housing. This category included several different types of senior housing, from market rate rentals to subsidized housing, assisted living and memory care.

Deutz said Marshall has had new housing units open up since the 2021 housing study. Since 2021, there have been 37 new single family homes and 87 rental units added, she said. Another 164 units of rental housing are either planned or under construction.

Deutz said those new housing units did not include subsidized housing, but 60 subsidized units are being proposed for a development near London Road, by developer Tapestry Companies.

Some real estate agents in Marshall said they’ve seen the number of single family homes for sale decline in the past few years.

Real estate agent Tara Onken said there was a “missing middle” in available homes, with fewer homes in the $100,000 to $300,000 price range.

“It’s generally been a seller’s market. Houses sell quickly,” Onken said.

“We are always short of single family homes,” said real estate agent Jana Reilly. “We haven’t noticed it as much in the last year or so, because interest rates have been above what they’ve been for the last five years.”

Reilly and Onken said interest rates, and factors like the cost of inflation, can play a part in whether a house is affordable for prospective buyers. At the same time, homeowners who bought their current house when interest rates were lower might stay where they are instead of moving into a larger home, Reilly said.

Rising costs for builders also play a role in the construction of new homes, Reilly and Onken said.

“It’s hard to build an affordable home,” Onken said.

In addition to privately owned properties, Marshall does also have housing units managed by the Public Housing Commission of the city of Marshall (PHCCM). The PHCCM has a total of 145 housing units, including one, two, three and four-bedroom units, said PHCCM Executive Director Mark Farrell. However, those units also tend to stay full.

Farrell said the PHCCM has “a good number” of applicants on a waiting list for housing. But not every applicant will qualify for housing, and not every applicant will be able to move in when a unit becomes available, he said. Sometimes applicants have found other housing by the time a public housing unit opens up.

The availability of particular types of PHCCM housing tends to fluctuate, Farrell said. There can be turnover for some units when college students graduate, while public housing townhomes and houses have tended to have less occupant turnover, he said.

There have been some new housing developments in Marshall in the past few years. The Block One apartments in Marshall’s downtown were built in 2023. Stone Meadows, a 108-unit apartment complex, is currently under construction on land along Clarice Avenue, near the former Shopko building in Marshall. The project will include three buildings of market rate apartments.

Recently, the Marshall City Council also heard zoning and platting requests for two different townhome projects. One would be located on land along Donald Street, and the other would be located near Canoga Circle. Canoga Circle is in an area of Marshall near the Canoga Park Childcare center, the Super 8 and the Hitching Post restaurant.

Another developer is also trying to secure funding to build affordable housing on land near London Road in Marshall.

Tapestry Companies is seeking to build a 60-unit affordable apartment complex, which would include a mix of one-, two-, three- and four-bedroom apartments. The project would serve families with incomes at or below 50% of the area median income.

Typically, the residents of this kind of housing tend to be young families, or families in need of affordable housing options, Trimble said.

In May, Tapestry Executive Vice President Tim Trimble told the Lyon County Board that Tapestry was trying for a third time to get tax credits from the Minnesota Housing Finance Agency for the project. Lyon County and the city of Marshall have also pledged support for the project. Lyon County Administrator Loren Stomberg told county commissioners that the city of Marshall was donating the land for the project, as well as working through additional financial incentives. The county pledged about $144,000 of its state housing funds to support the Tapestry project.

Trimble said there were a few factors that made Marshall a good location for the planned apartment project. Greater Minnesota has been “overlooked” for affordable housing development, Trimble told the Independent. There also seemed to be a need in Marshall that Tapestry could help fill.

“Marshall hasn’t had a new affordable (housing) project built in something like 40 years,” he said. Plus, there didn’t seem to be many market rate options for rental housing with three or four bedrooms, he said. It also helped that there was support for the project from the city of Marshall and Lyon County.

Trimble said the Marshall project came close to being awarded funding from Minnesota Housing last year.

“It was heart-wrenching to find out we were so close,” Trimble said. “We came so close last year, that we have a pretty good feeling about this year.”

Trimble said Tapestry won’t know until December whether it will approved for Minnesota Housing funding.

Deutz said housing availability is an important issue for Marshall’s growth.

“A lack of housing stock, especially affordable housing, has significant impacts on economic development,” she said. “It affects our employers’ ability to attract and retain workforce, which is true for both existing businesses and those looking to invest in our community.”

Businesses consider many different factors when they look at adding jobs in a community, Deutz said. But factors like the available workforce, the cost and availability of housing, and training and education opportunities are usually high on the list, she said.

“We are fortunate that we’ve had developers interested in building market rate rental units in the community in recent years,” Deutz said. “We understand that this doesn’t meet the needs of all our residents, but we hope that it can help create more naturally occurring affordable housing, and support the growing housing demand.”

The recent interest in apartment projects in Marshall was a positive sign, Deutz said.

“I think these projects demonstrate that outside developers not only recognize the need that exists in Marshall, but feel confident that their investment in our community is worthwhile,” she said.