Duluth giving free land to 10 developers for housing projects

The Rebuild Duluth program, which was announced in November, is slated to bring 30 new housing units to the city by the end of 2021.

"There are properties throughout the city that we can leverage," said Jason Hale, a senior housing developer for Duluth. "They're vacant right now and they're in public ownership, so they're not on the property tax rolls."

The 10 parcels being doled out have a combined estimated value of $105,000, Hale said, and city staff is guessing they'll generate about $3.7 million in developments.

Twenty-six applicants, from as far as New York City and Mexico City, submitted proposals to build on one of the Duluth plots. Designs included plans for tiny houses with solar panels and no-mow grass, as well as a multiunit dwelling built from shipping containers.

Those selected have signed agreements to move forward with their plans, which will go to the Duluth Economic Development Authority for approval at the end of the month.

A study conducted last year estimated Duluth will need an additional 3,800 affordable units over the next decade. The city is on pace to develop 1,200, and just doubling that number would cost up to $12 million per year.

Since 1980, Duluth has added about 1,400 units to its housing stock, according to a 2019 report. Though the city's population has decreased in that time, nearly half of Duluth homes were built before 1940 and are in need of repairs.

A majority of the housing built in recent years has been apartments or other multifamily projects, but many of the Rebuild Duluth proposals were for single-family homes on small pieces of land.

Hale said the average cost per unit for Rebuild Duluth projects selected by the city was about $142,000. Prices could change as developers dive further into the planning process, but Hale hopes they will be able to close on the conveyance of property and start building by August.

Duluth-based 1 LLC won a small 25-foot lot in the Lincoln Park neighborhood with its plans for a modern tiny home with a single bathroom, kitchen and bedroom.

Josh MacInnes, director of development for the company, said he's excited to be adding to the housing stock near the city's burgeoning craft district, where popular breweries and restaurants have emerged in recent years.

Twin Cities-based architectural firm Aventur proposed the construction of two contemporary townhouses near Duluth's Hillside neighborhoods that will offer views of Lake Superior from their joined roof deck.

Gary Johnson, president of Aventur, said his initial estimates have the cost of building the townhouses (which would have three bedrooms and three bathrooms) at roughly $335,000 each, though that could change as the company moves forward with its plans. He designed the structures so that the first floors would be easy to rent out for an owner hoping to make the units more cost effective.

"When you build affordable housing and you put up the least expensive design option, it doesn't last very long and it's not a contribution to the neighborhood," Johnson said. Both he and Macinnes said they don't know yet if they'll sell or rent their units when they're built.

A report from Mayor Emily Larson's housing task force last month nodded to Rebuild Duluth in its recommendation that the city start looking at more ways to obtain land to donate, possibly for larger multifamily housing developments.

"This is just a pilot program," Hale said. "But we're already thinking what a second round could look like."

Katie Galioto • 612-673-4478