Population, housing options on the rise in area

BY RANDY PAULSON STAFF WRITER

The past decade and change has been a time of growth for central and northern Washington County in terms of population and places for people to live.

Nowhere has that growth been more pronounced than in Lake Elmo, which from 2010 to 2020 grew in population from 8,069 people to 11,335.

More recently, the city’s population stands at close to 13,000 people, per U.S. Census data.

The jump in number of residents — and housing — didn’t take off in earnest until the middle of the decade, though, according to City Administrator Kristina Handt.

“We've been adding about 250 to 300 new homes each year since about 2016. Our growth really kicked off in 2015,” Handt said, adding the population spurt is because the city was connected to a regional sewer system at the urging of the Met Council in 2014.

The city went from 41 permits for new housing units in 2014 to 142 permits in 2015 and 336 permits in 2016.

“I would say we do about 250 new homes on average each year. Sometimes it's closer to 300. This past year, I think we just barely crossed 200,” Handt said.

She noted the growth has been contained to main spots: along I-94 to the south, and in the city’s downtown or “Old Village” area to the northeast along Lake Elmo Avenue and Stillwater Boulevard.

“It's not our plan to have all of Lake Elmo be developed at these high densities; we still really value the rural areas,” Handt said.

On Hudson Boulevard and east of Julia Avenue North, for instance, is the Springs at Lake Elmo Apartments building, which was completed in the past couple of years and has 300 units. Development of townhomes to the north of that apartment complex along Fifth Street North has been ongoing, and another 190-unit apartment building is in the works to the northeast of Springs at Lake Elmo.

Other new housing developments in the last decade include the Easton Village development and Northport development, each of which is west of Lake Elmo Airport on Manning Avenue and has 217 and 104 units, respectively. The Legacy at North Star housing development is situated west of Lake Elmo Avenue North and has 262 dwellings, while the Wildflower development is east of Lake Elmo Avenue with 145 dwellings.

Handt noted a shift in the types of new housing in Lake Elmo. Although most of the earlier developments were for single-family units (which also is what 82% of the city’s housing stock was as of 2017), newer developments have tended toward townhomes and apartments.

Boulder Ponds Senior Living in the south on Jade Trail and Arbor Glen to the north on 39th Street, meanwhile, provide housing for seniors, including a mix of long-term care units, single-family and rental units.

According to projections from the Met Council, Lake Elmo’s population is projected to grow to about 18,000 people by 2030 and to more than 22,000 by 2040. That slowdown in the 2030s is expected, since much of the newly sewered areas will likely be developed by then.

Another wrinkle in Lake Elmo’s growth saga has been the need for more water supply wells, despite a limitation on groundwater use due to previous chemical contamination. The city also is prevented from placing new wells to the north because of a 2017 district court order for a residential watering ban for White Bear Lake and areas within a 5-mile radius due to low lake levels.

The water problems have, in turn, slowed down the expansion of new housing relative to what housing growth could have been.

“Many of those developers are still hanging around, and I expect to see them back here once that gets lifted,” Handt said.

She said the city itself has opted to let the market drive itself when it comes to meeting housing needs going forward.

She referenced the city’s Comprehensive Plan 2040, which provides flexibility in anticipating future development needs.

“It could be high-density residential housing, or it could be commercial or business park developments. We want to be nimble in that way in working with developers,” she said.

Forest Lake hasn’t seen quite the population surge as Lake Elmo, but has still experienced an uptick in its number of residents and housing options for them.

The county’s northwesternmost outpost grew by 2,236 people from 2010 to 2020.

Chelsea Erickson, a real estate agent with LaBelle Real Estate Group, recalled how the community had a low housing inventory even before the coronavirus pandemic hit in 2020.

Despite COVID-19, she said the housing market at the time was still active, as people either sought to relocate or complete improvements to their houses while stuck at home.

COVID-related supply chain issues and skyrocketing costs of building materials presented barriers to new construction, though Erickson noted new housing construction in Forest Lake is more recently “in full bloom.”

“We are still historically behind the scene when it comes to having enough housing for the demand,” she said.

Whenever a new house hits the market, Erickson typically gets calls from people asking about it or wanting to look at it before it gets sold.

“If it's priced right and there's a perceived value there, it will sell,” she said.

At the end of 2022, Erickson said the average sale price in Forest Lake was $410,947, which was up 7.5% from the previous year. Median sale price, meanwhile, was $365,000.

New construction for townhomes tends to be in the $300,000-and-under range, while new construction of single-family homes is generally $400,000 or more. A house in Forest Lake that’s on the market will spend about 35 to 45 days there, as of mid-February, making it a seller’s market.

“It's less than six months. However, are we starting to see sellers be a little bit more amenable to buyer demand?

Yep. Because the ultimate goal is to get the home sold,” she added.

Recently finished housing structures in Forest Lake haven’t just been single-family homes; multifamily and rental units have been on the rise too.

Timber Ridge Luxury Apartments, for instance, recently completed two buildings on Everton Avenue North: One opened its doors in November and the other did so in February. Those apartment units include a mix of studios as well as one-, two- and three-bedroom spaces. Just to the southwest on the market tends to pick up again. She also pointed out how each buyer is unique, and that it’s difficult to classify prospective homeowners into neat categories.

“They're all going to have different needs,” Erickson said.

Richard McDonough, an associate broker with Sotheby’s International Realty in Stillwater, said “there’s still a ton of demand” for housing in and around the Washington County seat community, which also is a seller’s market.

“It's great to see all the people in Stillwater, not not only from a tourist standpoint, but coming out here because of all that the St. Croix Valley has to offer,” McDonough said.

Stillwater saw a modest uptick in population from 2010 to 2020 — an increase of 1,169 people — though McDonough called that growth normal.

Since most of the developable land in Stillwater has already been developed, McDonough said there isn’t as much opportunity for new construction to occur. That scarcity of developable real estate has pushed up prices. New single-family homes, for instance, tend to come in at about $500,000 or more, while townhomes fall between $200,000-$300,000.

“$200,000 to $300,000 for a first-time homebuyer for a single-family home, in some respects, is non-existent for us. We just, unfortunately, have a high price point. And that house at $200,000 or $300,000, in many cases, is a fixer-upper,” he said.

Stillwater also has demand for more rental housing and has seen a subsequent expansion of apartment options in town.

For example, real estate developer Reuter-Walton Development converted the former Chestnut Building in the 200 block of downtown Stillwater into a 61-unit luxury apartment building dubbed The Miller. It’s set to welcome tenants in May.

Ground will break for construction on another 21-unit luxury apartment edifice — Chapel Hill Flats — this spring, up the hill from the Lowell Inn on Myrtle Street East.

Population Growth

the opposite side of 19th Street Southwest are Gateway Green Townhomes and Apartments, which were completed in 2019.

If this year is anything like previous years, Erickson predicted the housing market will slow down throughout July and August as families become busy with summer activities and take vacation. Once school starts in September,

Although the need for rental and multifamily housing is apparent, McDonough said the price of rent has also been going up. The choice of renting versus buying also entails a tradeoff: Tenants put their monthly housing costs toward rent instead of toward a mortgage and building up equity.

McDonough encouraged homeowners who may be looking to sell to consult with real estate professionals to determine their house’s value, instead of relying on online tools that give value estimates.

“Every location is unique, and every house is unique,” he said. “That's where it's important that, whoever that expert is, gives you the proper information.”