Minn. city to renew free-lot offer

By Mark Anderson
Dolan Media Newswires

Minneapolis — City leaders in New Richland decided five years ago that the best way to keep their town alive might be to give part of it away.

Leaders in the farming community of about 1,100 people in south-central Minnesota were worried about the demographic trends. The population was declining, the average age was climbing and the tax base was flat.

Their response was to make an offer. People willing to build a home in New Richland could get a free lot in a city-owned subdivision and a big reduction in assessment costs. They just needed to be willing to call New Richland home.

“We wanted to see if we could grow this community,” said Bernie Anderson, a city council member in 2006 when New Richland launched its offer, and president of the State Bank of New Richland, which his family has owned since the 1970s. “But generating growth has been a tough task for many outstate small towns.”

So he was intrigued after reading a story in a banking magazine about a rural town whose land giveaway idea had elicited a lot of interest and applicants. He took the idea to fellow council members and they agreed it was worth a try.

The outcome in New Richland so far is mixed. The city gave away seven lots in its 24-lot subdivision during the first two years of the offer, well above the one new home a year the city had averaged in recent years.

Interest started disappearing in 2008, however, as homebuilding markets suffered across the nation.

But New Richland will begin pushing its offer again soon. This time, officials may have some useful guidance on how to identify and reach the people likely interested in their offer, thanks to the University of Minnesota and some of the state’s rural development agencies.

Tucked away in some of the most recent census data, researchers have found evidence that there’s a segment of urban Americans who are reversing the long-standing migration away from rural communities.

One of the demographic surprises that emerged from the last national census was that during the 1990s, 2.2 million more Americans moved from metropolitan counties to nonmetropolitan counties than in the other direction.

Ben Winchester has been leading the search to discover the size of that metro-to-rural migration in Minnesota and to learn who’s making the trek and why.

Winchester, a research fellow with the University of Minnesota’s Extension Center for Community Vitality, has compiled data showing a clear pattern of rural in-migration — and that the trend is occurring throughout the state.

He’s also working with the staff of the Upper Minnesota Valley Regional Development Center in Appleton and the University of Minnesota, Crookston to learn more about the move and what motivated the newcomers who have returned to small communities.

And their work may be a key in reviving New Richland’s homestead initiative.

The town’s homestead giveaway is already close to being a financial success. Anderson said that if one more home is built, the added taxes will cover the project’s tax increment financing liability, which the town used to repay its land and infrastructure investments in the subdivision.

And after two very slow years it’s time to start marketing the offer again, said Wayne Billing, New Richland’s city clerk and its mayor in 2005 when the giveaway planning started.

“We got a mention in Time magazine when we started this, and we got 300 calls right away,” Billing said. “But when people realized how far we were from California, a lot of them lost interest. So the question we’re facing is: Where do we market? How far away will people be interested in New Richland?”

They may have some better answers to that question soon.