Paffrath tiny home dreams in southeast Willmar, Minnesota, paused for time being

Jun 03, 2023

WILLMAR — After an hour-long closed session at the Aug. 7 Willmar City Council meeting, followed by another lengthy discussion at the Aug. 21 meeting, the council approved amendments to the purchase agreement for city-owned land on which real estate agent Justin Paffrath had hoped to construct a tiny home development.

However, due to the costs associated with soil corrections and the inflated costs of construction materials, the development will likely no longer be for tiny homes. It will likely instead be a development for multi-family housing.

It is unknown what was discussed in the closed session, but two councilors still had a lot of questions during the meeting Monday regarding the amendments Paffrath wanted in the purchase agreement.

The agreement was originally for the purchase of four lots on the southeast side of town for $32,000. The lots are located on 14th Avenue Southeast just before it curves and becomes Pleasant View Drive Southeast.

The amended agreement allows Paffrath to purchase three of the lots at a reduced cost of $1,000 per lot and removes the lot that has a wetland/stormwater pond on it. These changes were extensively questioned by councilors Audrey Nelsen and Tom Butterfield , but they ultimately agreed to them.

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The amendments also allow something other than tiny homes to be constructed, but it still has to be some type of multi-family housing.

If Paffrath does not begin construction of a development within one year of closing on the purchase agreement, the city has one year after that to exercise the option to purchase the land back at the same price which it was sold.

“Initially, the plan was to have a (planned unit development) for tiny homes. It was going to be right around two acres. That way it could have its own character and kind of fit into a neighborhood,” Willmar Planning and Development Director Justice Walker told the council. “The land had already been rezoned to R4 (high-density residential) and this is an intent to add housing into the community.”

He explained that geotechnical issues and inflated costs have made the tiny home development nonviable at that location, which is why Paffrath was asking to amend the purchase agreement.

“He would like the freedom to build any project that can cash flow there,” Walker commented.

Councilor Carl Shuldes asked Paffrath what his plans might be for the site, since the tiny homes now seem nonviable.

Paffrath noted that the only option available to him with the current zoning would be to construct multi-family housing units.

“(I’m) looking to rework it,” Paffrath said. “I haven’t exercised that part of my brain yet, because we are not past this point of the negotiation so I didn’t want to go there.”

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He noted that amending the agreement to allow for something other than tiny houses is a way for him to make up for the time spent investigating the viability of the project and the amount of money he has invested into the site.

“It’s unfortunate the soil worked out to be this way,” Paffrath said. “It kind of crushed the dreams of the tiny house site. I’d like to continue to look for a site to do something like that in the future. But, ultimately the goal is to try and get housing built, whatever it is.”

Shuldes and councilors Justin Ask and Julie Asmus encouraged Paffrath to continue finding something that would be viable for housing at the site, as well as finding a new site for his tiny homes.

“The housing needs in the community I think are at the point where we can call it a crisis,” Ask said. “I’m appreciative that Mr. Paffrath, along with others in our community, are trying to address that. I appreciate the creativity he has brought to the table in looking at different options. I appreciate the risks that he is willing to take. … Because of the great need that we have for housing, I’m supportive of meeting him where he is asking us to meet him now. I hope he builds something here. I hope he finds another spot for tiny homes.”

Shuldes noted that, although the city might be losing $30,000 from the sale of the land by amending the agreement, the city tax base gained when a development is completed will “more than make up for that.”

“If this is the difference between him being able to develop something and not, why won’t we go ahead with it? Why won’t we allow him to pursue this?” Shuldes asked.

Noting how much she “loved” the tiny home idea, Asmus said, “I applaud you for the innovative thinking. I’m bummed that it came in at such a high cost to build them. I would encourage anything to bring housing in.”

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