Changes in the rural economy are challenging small-town identity. Local communities are encouraging economic development and population growth while struggling to maintain "rural character." These efforts frequently foster policies -such as the banning of mobile homes, zoning requirements for large lots, enforcement of building codes, and barriers to the provision of multifamily rental housing-that result in higher consumer housing costs. Such policies reduce housing options for community newcomers and those with lower incomes, often with the unintended consequence of restricting economic development. This article examines ways in which economic restructuring has affected local housing conditions and policies in one Minnesota community.