Midwest towns cannot give land away to modern homesteaders

MARQUETTE, Kansas Sat Mar 31, 2012 9:55pm EDT

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MARQUETTE, Kansas (Reuters) - In Marquette, Kansas an ice cream cone is $1.09, haircuts start at $10 and land is free.

The land draws a lot less interest than ice cream or haircuts.

In a modern day version of President Abraham Lincoln's 1862 Homestead Act that gave free land to settle the vast American interior, Marquette is among a dozen struggling central Kansas towns offering free lots to anyone who agrees to build a house.

But unlike the 19th century, when European immigrants rushed to the Midwest to get their free 160 acres of farmland, building homes from sod to show they had made improvements, some Kansas small towns now are struggling even to give away lots for homes.

The reasons are many. The recession of 2008 and the real estate crash froze people in their current homes so they could not move from urban areas. Many people cannot afford to build a house on the free land.

Of late, high prices of gas have been a hardship on small town residents who often must commute long distances to jobs and sometimes even to buy groceries.

Marquette, settled by Swedish immigrants in the late 19th century who built sturdy brick buildings on main street, has little to offer in the way of jobs. Newcomers would likely have to find work in nearby larger towns of Salina or McPherson, which is not easy either.

"It comes down to getting a job," Marquette City Clerk Fred Peterson said.

About half of the 70 free lots in Marquette were built upon, but only a handful in the past three years, said Mayor Allan Lindfors. People still want to come to Marquette, but most would be unable to sell the house they own, he said.

"That has probably hurt us more than anything else," Lindfors said.

Marquette still considers its free land program a success. It boosted population when many small Kansas towns lost people. The U.S. Census showed that city grew to 641 in 2010 from 542 in 2000.

Most of the takers of free lots in Marquette and other area towns already lived in Kansas, officials said. An exception was the Gonzalez family, who left Los Angeles to take a free lot in Marquette about five years ago.

"My parents wanted to take us away from the gangs and all that," said Cecilia Gonzalez, 18, a senior at a high school near Marquette. "Actually, I love it here. I hated the big city. Here, you can go for a walk at midnight and have no fear of getting shot."

Gonzalez works at City Sundries, where ice cream is served at the marble counter of an authentic soda fountain. It is a gathering place for children after school.

Towns such as Marquette tout their low cost of living, lack of crime, outdoor recreation and good schools. Some prospective takers of free land display "culture shock" over the relatively isolated setting and the shortage of retail stores, Peterson said. He has files on about 25 people interested in free land if the economy improves.

But some other towns struggle to lure anybody. Lincoln, Kansas has had only one taker for the 21 lots it started giving away nearly eight years ago -- and that was the mayor at the time, who has since died.

One of the lots holds an empty model home, now for sale. The rest of the land is advertised on a wind-beaten wooden sign with faded lettering that reads "Free housing lots available."

Real estate agent Fred Vestal, who listed the model home, was on the city council when it decided to jump into the free land program. City leaders envisioned a stronger tax base, stable retail climate and full schools. Instead, it is stuck paying off the bonds issued to pave streets and install utilities in the free lots subdivision.

"The sad thing is, we were a little too late," Vestal said. "The other towns already got theirs going. It's one of those things that did not work, but you have to try something or this town is going to dry up."

Lincoln's population declined to 1,297 in the 2010 Census from 1,349 people in 2000. It is the county seat so it has a courthouse and other local government offices, and still has a school with grades through high school, considered crucial to a town's viability.

The free lots in Lincoln would otherwise be valued at up to $12,200, according to the county assessor's office. But getting a free lot is only the first step for would-be homeowners, said Lincoln Mayor Glenn Stegman.

"People can't afford to build the house," Stegman said. "That would take some money."

Tescott, Kansas, population 340, has been unable to give away any of its 11 free lots available since 2008, said Joann Schwindt, city clerk.

"People want to live out here and the get the benefits of a small town and school, but the reality is sometimes they just can't do that," Schwindt said.

Other Kansas communities such as Minneapolis and Ellsworth report better results from the free land program, mostly when the economy was better.

Minneapolis found takers for 28 of 32 lots, City Administrator Barry Hodges said. Six of eight free lots in Ellsworth have houses, said Rob Fillion, executive director of the local economic development corporation.

While some of the lots in small towns may be free, they are surrounded by what is often called one of the world's great breadbaskets, with some of the richest farmland in the nation. Homesteaded for free some 150 years ago, prime Kansas farmland is now selling at record prices because of the boom in commodity markets.

(Editing by Greg McCune)

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