HARMONY — Harmony really wants new residents — so much that it’s offering to pay up to $12,000 to families willing to build new homes there.

The community of 1,020 recently began offering rebates to counter the loss of young professionals to other communities after officials learned that younger people don’t want to live in old homes that need work.

“The younger people coming here, they don’t want to live in their grandmother’s house,” said Steve Cremer, president of Harmony Enterprises, which manufactures trash compactors and recycling equipment.

So Harmony is offering $5,000 to people who build a house worth $125,000, and up to $12,000 for a $250,000 home.

Existing single-family houses might cost $60,000 but then require $50,000 of work, said Christopher Skaalen, head of the Harmony Economic Development Authority. The young professionals whom the city is seeking want move-in-ready homes, he said.

“We do have homes like that, but they never go on the market,” said Skaalen, president of First Southeast Bank. Instead, they’re snapped up privately, without being listed.

Another southeastern Minnesota city, Stewartville, began offering $5,000 for new homes last year. More than a dozen people have taken advantage of the program, city administrator William Schimmel Jr. said.

“It’s worked — very much so,” he said. “I know that some think, ‘Oh, those folks were going to build anyway.’ But we’ve seen new investment.”

Ben Winchester, a University of Minnesota Extension research fellow, studied housing incentives in a handful of counties and found “they did not appear to make a significant difference,” he said. Rather than attracting new residents, the programs were used mostly by people already living there.