Market-rate project will be first of its kind built in at least 30 yrs.

The Albert Lea City Council  on Monday approved tax abatement for the first new market-rate rental housing to be built in the city in at least 30 years.

Developer TSB Janesville LLC plans to build five six-plex buildings off of Wedgewood Road, said Albert Lea Mayor Vern Rasmussen. The tax abatement will apply to four of the buildings, or 24 units.

City Manager Chad Adams said the total estimated abatement for the project is $277,000, with the county abatement estimated at about $99,000, the Albert Lea Area Schools abatement at about $51,000 and the city’s portion at about $127,000.

Randy Kehr, executive director of the Albert Lea-Freeborn County Chamber of Commerce, said he had three employers contact him in the last week alone who had employees who were having a hard time finding housing.

“We are in desperate need of market-rate quality housing, and this will give us the vehicle to get there,” Kehr said.

Albert Lea Housing and Redevelopment Authority Executive Director Jon Ford said the housing study completed last year in Albert Lea supports the need for market-rate housing.

Rasmussen said it is difficult getting private developers to develop market-rate housing when they know they are going to lose money up front. He said providing the developer with abatement gives an opportunity for that developer to meet the need of constituents who may be moving into the city.

Market-rate rental housing funding has been an issue raised for Greater Minnesota in the Legislature this year.

District 27 Sen. Dan Sparks, DFL-Austin, has authored a bill that would allot $40 million over the next two years to a newly created office of workforce housing to fund housing projects across the state using grants and tax credits.

City leaders have said the lack of quality market-rate housing is a hinderance in getting young professionals to move to the area.