Want to Live in Duluth? Good Luck
Plans for the Incline Village housing development in Duluth currently call for 1,300 market-rate apartments and condos to be built on a prime site overlooking Lake Superior, on the former site of the city’s Central High School. Construction is expected to begin this summer. It will be the city’s biggest housing project ever—and it will have a great view. It won’t be a moment too soon.
A 2019 study commissioned by the city estimated that Duluth needed to add 3,600 affordable housing units between 2019 and 2024 to keep pace with demand, and that’s just in the affordable category. There has been some construction. According to the city’s most recent Housing Indicator Report (for 2022, released in April 2023), the city added 176 net housing units in 2022; from 2019 through 2022, Duluth netted 1,183 units of any type of housing.
But at the current pace of development, “it would take many years to catch up to the deficit,” says Noah Hobbs, strategy and policy director for One Roof Community Housing, a Duluth-based affordable-housing developer. Incline Village would help. But the 1,300 units it’s expected to provide would be built over seven to 10 years.
What surprises many is that Duluth has a housing shortage at all, given the city’s stagnant population, which was 86,810 in 2000 and 110 fewer in 2020. But it’s also worth noting that the number of Duluthians 19 and under has shrunk, while the population 20 to 34 has grown. In short, residents are having fewer kids while trending toward prime homebuying age. That’s one reason “we need more units now than in 2000,” Hobbs says. And while some housing was lost to the Essentia Health hospital expansion, “there hasn’t been a net negative in the housing stock due to demolition.”
“We can’t build enough single-family homes to get out of the housing shortage.”
—Noah hobbs, strategy and policy director, one roof community housing
Why can’t housing be built more quickly? High interest rates and construction costs are two obvious reasons. As Hobbs notes, a tight market is “a nationwide problem.” But there are factors specific to Duluth. It doesn’t have as many large general contractors, he says. And there is very little available land. “We can’t build enough single-family homes to get out of the housing shortage,” Hobbs says, adding that Duluth has a lack of multifamily living options compared to other regional population centers.
The city is offering financial encouragement for would-be builders. The council approved a $25.8 million subsidy to get Incline Village underway, and the project is likely to get tax-increment financing in the future. To get additional projects built, Duluth will probably need to put more money on the table.
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Median Duluth house sale price
January 2023: $209,900
January 2024: $260,000
Source: Realtor.com
