Turn Around Imminent?
The Brainerd Lakes Area has been one of the fastest growing regions in Minnesota over the past two decades. The chart below shows the annual sales of lots (less than five acres, non-lakeshore) within this region. There were 364 lots sold in 2004, the peak year in this analysis. While the analysis runs through mid-October, it is clear that 2008 numbers will be a fraction of the peak amount.
What perhaps is more critical to cities and townships than the amount of lots sold is how that amount compares to the overall inventory. The analysis shows that, at current rates of development, we have more than a decade’s worth of off-lake lots being actively listed for sale. Our estimate is that we may have double that amount available if the unlisted lots were also inventoried. All of these lots are served by infrastructure, which will be maintained for many years with little or no tax revenue to support the expense.
In short, we have overbuilt, and done so in a very inefficient manner. The only way to address this imbalance without massive taxpayer subsidy is to ensure that new development makes the best use possible of existing infrastructure investments.
[1] Data prepared by Scott Lanz, President of Lanz Appraisal of Brainerd, MN