Staff photo by Clay Schuldt Land at North Highland Avenue and Maplewood Drive could soon be developed into workforce housing to alleviate a housing shortage for workers in New Ulm's labor market.

NEW ULM — Additional workforce housing could begin development in New Ulm before the end of the year.

A nonprofit corporation called the Hope Housing Foundation is working to secure funding to begin developing a property at North Highland Avenue and Maplewood Drive.

Hope Housing Foundation is dedicated to the creation and preservation of affordable workforce housing for low- to moderate-income families. Their housing project proposed in New Ulm is intended to alleviate affordable housing issues in New Ulm.

Manufacturers are struggling to recruit employees to come to New Ulm due to a lack of affordable housing. Workforce housing also could help retain employees of local businesses in the New Ulm area.

The first phase of the project would consist of a three-story building with 27 units on a six-acre site. The second phase would include another residential unit for approximately 52 total units. Four twin homes would also be built along Maplewood Drive.

Hope Housing Foundation is seeking funding for the project, which is estimated at $6.4 million. The New Ulm Economic Development Authority agreed to provide $123,850 for the project, which would be used for soil boring, environmental work, surveying and land purchase.

The EDA would recover the funds through tax abatement on the property.

City Manager Chris Dalton said it would take 10 to 12 years to recover the property back through tax abatement.

EDA Chairman Daniel Braam said, “I personally think this is a definite step in the right direction in addressing our ongoing housing needs.”

Braam also commended the city for seeking the abatement option for this project. He said traditionally the abatements were used for businesses and not housing.

“With housing being such a critical need for workforce development and for employment, we have to think in these terms,” he said.

Hope Housing is also seeking funds from Property Assessed Clean Energy grant and Minnesota Housing Finance Agency Grant.

Hope Housing will learn if the MHFA grant was approved by the end of the month. Dalton said the Hope Housing is intending to move forward, regardless of whether the MHFA is awarded.

If additional funding is awarded, project development could begin this summer.