Rebate programs help to bring affordable housing to Ottertail

Photo by Chad Koenen
Several new town homes have sprung up along Highway 108 in Ottertail in recent years. The town homes have brought a number of new affordable housing options in Ottertail.a

By Chad Koenen


If it seems like Ottertail is going through a bit of a growth spurt, there is a good reason for that—it is and by quite a bit at that. 

Over the past several years, the city of Ottertail has seen several new town homes constructed on Highway 108 along Thumper Pond, while also having $1 lots available for new single family homes. The new town homes, which sit along Thumper Pond are mostly full, while the finishing touches are being completed on a new set of town homes near the south entrance of Thumper Pond. The housing boom comes as Otter Tail County is offering a large tax rebate program, along with several cities in the county like Ottertail, to combat a lack of affordable housing in the region.

Ottertail city clerk/treasurer Elaine Hanson said the new town homes have been a popular option for people who are looking to downsize, or move off the lake, but want to stay in the area. While the town homes have been popular for people who are entering retirement, they are not restricted to those who are ages 65 and older.

“They still want to be in the lakes area, but they don’t want to live on the lake. They want more of a rental situation,” said Hanson. 

Ottertail Mayor Ron Grobeck said Ottertail’s growth in recent years can be due to a number of reasons like its proximity to Otter Tail Lake, as well as the tourism and outdoor opportunities available to residents. The community has also put a point of emphasis on making a number of city improvements, while keeping its tax base low for residents. That helps to keep housing options affordable for new and existing families in the community.

“I think in Ottertail we have a good tax base, we have good roads, the lots are good size and I just think those are some of the reasons why it is becoming a real popular place to be,” he said.

Grobeck said the work of the local nonprofits like the Ottertail Rod and Gun, Ottertail Lions and Ottertail Community and Business Association in providing community activities like OtterDazzle, the summer music concert series and even providing funding for community projects has also created a sense of community in the small town. 

Amy Baldwin of the Otter Tail County CDA said the county continues to focus on providing affordable housing options for residents throughout the region. The county is currently offering a tax rebate program for new housing.

The program provides financial support to the homeowners or the builders of the home in the form of rebated, or refunded, property taxes. When the program was introduced, applicants could receive a rebate of up to $5,000 of the county’s portion of future property tax and $5,000 of the city’s portion in select communities. The expansion to the program now provides applicants up to $10,000 of the county’s portion of future property taxes and $5,000 of the city’s portion. Additionally, the program application deadline has been extended from December 2022 until December 2024.

So far there have been 150 applications that have been approved in cities and rural areas throughout the county.

“They are scattered throughout,” said Baldwin. “They are kind of everywhere, which is great to see.”

The City of Ottertail is also selling up to 14 lots for just $1 apiece, provided a new home is constructed on the lot. The hope is to make building a new home more affordable as it provides instant equity to a home owner. 

Since many banks traditionally require a 20 percent down payment, a lot valued at $15,000, for instance, will get a potential homeowner that much closer to hitting that mark to get a loan.

While each of the lots in Happy Acres comes with assessments to pay for a new road and utilities, as part of the TIF district, home owners will receive a large reimbursement on their taxes to cover a portion of the cost.

Baldwin said some communities like Ottertail have been trying to attract more affordable housing for years, which has left it in a perfect position to capitalize on the county’s program. Ottertail, for example, already has land it is selling for $1 apiece and options for residents to construct new and multi-family homes in the adjacent area. 

“We continue to have a strong effort to support housing growth throughout the county. Some cities are positioned differently to see more growth,” she said. “(Ottertail is) maybe ahead of the game in thinking about where their housing opportunities are.”

All of the extra housing has resulted in a bit of a population increase in Ottertail, as more retired people come to the small community that has everything from groceries, dining, walking trails and is only a stones throw away from larger communities like Perham and New York Mills.

“I consider us kind of a bedroom community to Perham and maybe New York Mills,” said Hanson. “I think it is a lot of retired people (moving to town). They like the golf course and being close to the golf course.”

Grobeck agreed that Ottertail’s location to neighboring communities, with ample job opportunities, makes it a popular place for people of all ages to call home.

“We are 23 miles to everywhere, we are kind of right in the middle in that respect. Our location is really helpful,” said Grobeck. 

For more information about the $1 lots available in Ottertail, contact Hanson at the City of Ottertail at 367-2250.