Duluth’s CAO Responds To Concerns About $195K Tiny Home

DULUTH, Minn. — A new tiny home in Duluth with a sale price of nearly $200,000 is getting quite the sticker-shock response and concerns from locals.

The concerns are being heard by the city’s chief administrative officer who addressed the issue to the council with some background and perspective.

The tiny home is located along 6th Avenue East.

It’s a one-bedroom, one-bathroom home with a patio and grill.

Simply Tiny Development in Colorado is behind the 205-square-foot home.

The project is part of the city’s Rebuild Duluth Campaign as a way for the city to take advantage of small and rectangular lots in communities like the Hillside that aren’t able to handle traditional development.

The spirit of the program is to encourage new and creative ideas for housing development, according to the city.

But with a price tag of $195,000 and concerns from the public following, CAO Noah Schuchman sent the council an email with his thoughts.

“The City of Duluth cannot dictate construction costs or the market. The City is very aware of the housing challenges that exist in Duluth and is committed to significant and ongoing support of affordable housing projects such as Plover Place, Brewery Creek, and many others that are in the queue for development,” Schuchman said.

See below for Schuchman’s full email to council:

The City is tracking that there is some concern in the community regarding the home listed for sale along 6th Ave E. Below is some information I hope is useful for you all:

In the 2019 State of the City address, Mayor Larson highlighted many housing related challenges in the city. Among those challenges were the increasing costs of newly developed housing. The Rebuild Duluth program was created to address infill housing needs across the city of Duluth while also building a collective knowledge of innovative construction methodologies to help lower costs.

The spirit of the program was to encourage new and creative ideas for housing development. The program intended to identify and reduce costs for creating infill (lots with previous structures, county forfeit parcels, tiny 25 foot lots with or without previous structures, or otherwise undevelopable parcels) housing within the city. To date, the number of units built as a result of this program is five single family homes. The remaining lots were returned to DEDA.

Affordability is one factor in scoring interested applicants. Other scoring criteria for Rebuild Duluth: density, timeline/feasibility, landscaping and stormwater retention, and energy efficiency. A generally accepted standard for affordable housing is 30% of gross income paid toward housing costs. Therefore, a household earning $50,000 could potentially afford to purchase an owned unit in the price range of $150,000 to $180,00. This project’s initial estimated construction costs were $191,000 and their agreement stipulates the developer will pay DEDA for the property if total construction is 25% greater than this.

Rebuild Duluth invited interested residents or developers to submit proposals to meet infill housing needs, and if a project met the selection criteria for the site, the only City money invested is the estimated market value of the lot, which in this case was $8,700.

Outside of existing zoning, land use, and building code regulations, the City of Duluth cannot dictate construction costs or the market. The City is very aware of the housing challenges that exist in Duluth and is committed to significant and ongoing support of affordable housing projects such as Plover Place, Brewery Creek, and many others that are in the queue for development.

For other questions regarding this development, we would respectfully refer those questions to Simply Tiny Development.