‘New Homestead Act’ would boost dwindling towns

Law aims to attract young entrepreneurs to the West’s depopulating fringes

  • Nonmetro counties with net outmigration of 10 percent or more, 1980-2000

    U.S. Census Bureau

EADS, COLORADO — On a blustery April day, it looks like this shrinking prairie town could blow away — and maybe it will. As the seat of southeastern Colorado’s Kiowa County, Eads presides over 1,785 square miles and a dwindling 1,429 souls.

Steve Puls, a former Baptist minister, says Eads is desperate for jobs. The county relies on dryland farming and increasingly feels the pinch of the drought. Empty buildings dot Eads, and schools close on Fridays to save money. “In 2000,” he says, “the railroad line shut down, farm prices were at record lows, and people were thinking that their town might cease to exist.”

Although the job situation hasn’t improved much, Puls sees reason to hope. He resigned from a full-time job at his church to work as production manager for Great Plains Oil, a start-up that sells motor oil made from sunflower and canola seeds. Kiowa County tops the list of counties in Colorado that are losing population, and that, says Puls, “is exactly what our company is designed to help.”

Owned by about 400 local stockholders, the young company hopes to make it big, eventually employing 15 to 20 people. If Great Plains Oil succeeds, Puls says, it could give Eads a tremendous economic shot in the arm.

Puls and his bio-lube company are part of an ongoing struggle to keep the Great Plains peopled, despite the suggestion of some academics that the region should be returned to bison range. Now, communities like Eads — and start-up companies like Great Plains Oil — may be getting some help from the federal government.

Homesteading, 21st-century style

Although farming areas have steadily hemorrhaged people for decades, depopulation’s cumulative effects, combined with the recent economic slump and drought conditions, may have brought rural morale to a new low. Rock-bottom market prices mean family farms continue to struggle, as agricultural lands are consolidated into fewer hands. Meanwhile, young people move to the cities in search of better job opportunities.

But in March, two Great Plains senators — Byron Dorgan, D-N.D., and Chuck Hagel, R-Neb. — reintroduced legislation with a name that conjures old-fashioned pioneer pride: the “New Homestead Act.” With a nod to its 1862 predecessor, the act seeks to entice the young and skilled into empty areas of the country. Unlike the original, the New Homestead Act does not actually distribute land. Instead, it promises economic benefits to people willing to try to make a living in a depopulated community.

The act encourages people — particularly the young, the educated and the entrepreneurially minded — to spend five years in any U.S. county that has lost at least 10 percent of its population in the last 20 years. In exchange, they can receive forgiveness for up to half of their student loans, along with special savings accounts and tax credits when buying a house. The act also offers tax credits to businesses and a venture capital fund to help expand local economies, with the goal of attracting manufacturing plants, Internet companies and other non-agricultural businesses.

“The heartland is worth saving,” says Sen. Dorgan. His bill would extend far beyond the heartland, however; about a quarter of the counties in 11 Western states — some concentrated in eastern Oregon, eastern Utah, and along the Arizona-New Mexico border — would qualify for New Homestead Act programs.

What about ag?

Some wonder, however, if rural areas can be saved without putting agriculture at the center of the rescue plan. “If we concentrated more on keeping small farmers and ranchers in the area, that would keep money in the area,” argues former farmer Frank Wallace, a county commissioner in southeastern Colorado’s Bent County.

Some locals, though, are convinced of the need for a more diverse economy. To them, the new Homestead Act sounds like a boon. “I think any time the federal government pays attention to small communities, it’s good,” says Kathy Finau, executive director of the Bent County Development Foundation. The county already has a corporate hog farm and two prisons, and is now courting a coal-fired power plant.

Bent County native Bill Long watches the Denver metro area buying up agricultural water rights in southeastern Colorado, and predicts that agriculture will grow less prominent in local communities.

Long’s son says he got lucky: Brian, a 25-year-old agriculture major at Colorado State University, plans to return to his roots in southeastern Colorado after graduating this spring. He already has a job lined up as a loan officer at the one bank in Las Animas, where he grew up. “I don’t know anyone my age that came back with a college degree and could do something with it,” he says. “I think that a lot of people would like to come back if it was feasible.”

On April 12, the New Homestead Act bill was referred to the Senate Finance Committee.

The author is a former High Country News intern.

Sen. Byron Dorgan’s office 202-224-2551 For a Radio High Country News interview with Sen. Dorgan, log on to www.hcn.org/radio.jsp, and go to Volume 4, Number 42

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