Report Shows Lack of Homes and Apartments in Duluth
DULUTH, Minn. – The latest housing indicator report by the City of Duluth confirms the need for more apartments and homes.
Their 2021 study found the average price for a home sold increased $35,000 to $240,000, the average rent went up $221, while the rental vacancy rate dropped around 3-percent to 2.1-percent. Typically, a five-percent vacancy rate is considered healthy, with rates lower than this indicating more demand than what is available.
This low supply has the city working with developers and nonprofits to find ways to increase vouchers to keep housing affordable, as well as encouraging new development.
“I think the community, not only the City of Duluth, but the nonprofits,” says Theresa Bajda, Planner II for City of Duluth’s Housing & Development Division, “everyone is really getting behind that, and working to find ways. Construction costs are really high in Duluth. We’ve seen that happening. Our labor force is not as strong as say the Twin Cities. There’s not much to pull from. It’s always finding creative ways to provide financing to reduce the gap, to get the projects moving.”
A 2019 report commissioned by the city found Duluth could handle a 35-hundred unit increase of properties through 2024. Bajda says they city has seen around 729 units built through last year. “They’re going in the right direction. Really, our goal is get as many as we can, and worked it from a lot of different angles. You’re seeing the former St. Louis County Jail being redeveloped into apartments; historic restoration. You’re seeing rehab of single family homes. People adding accessory dwelling units for rentals, as well as new constructions. So I think approaching it from a bunch of different angles has been our goal.”
The report also showed that the number of college students attending UMD, Lake Superior College, and the College of St. Scholastica went down in 2021 when compared to 2020. Bajda believes the pandemic played a role with this as students had increased online and virtual options. “How many students not having to be on campus anymore maybe went and lived with a friend, moved home and lived with parents? So I think that speaks to the demand that we have for student housing.”
Regarding affording housing vouchers, the city continues to see a long waiting period to use them. They also found the utilization rate was not 100-percent. Bajda says they are working with tenants to find creative ways to accept them. “Sometimes there is a lot of fear of ‘you know I might be housing the hardest to house and what does that look like’. So I think just encouraging rental property owners to utilize that as a subsidy, but that also provides a great opportunity for folks with lower incomes to not pay more than 30-percent of their gross income on housing.”
