Land giveaway sparks tiny-home boom in Duluth

DULUTH – Developers are planning more than a dozen tiny homes in Duluth, including an eight-unit park that is among the first and largest such developments in the state.

The proposals, at sites around the city, are part of the Rebuild Duluth program in which the city gives away parcels of land to encourage creative housing solutions.

"I'm excited to see what the community interest is," said Jason Hale, senior housing developer for the city of Duluth. "If it goes well we can start looking at where else this might make sense."

The Duluth Economic Development Authority signed off on the land giveaway at a meeting Wednesday night. Hale said the homes, which will be permanent structures connected to city utilities, could be ready by the end of 2022.

All 15 proposed units would be rentals, though the city and the local housing authority are looking at similar developments that could incorporate homeownership.

"It is a higher cost per square foot," Hale said, which makes rentals a more palatable investment for developers. Ownership "is not out of the realm of possibility, it's just more complicated."

Duluth, like cities around the state and country, is facing a housing shortage across all price levels with a deep deficit of options for those making less than the median household income, about $50,000. The popularity of tiny homes in other parts of the country has left Duluth leaders encouraged about their potential for infill development in a city that is largely built out.

Last year a developer proposed a nine-unit "cottage village" comprising smaller rental homes — about 400 to 540 square feet — near the University of Minnesota Duluth campus.

"It's one tool in hopefully a growing toolbox," Hale said. "I hope it can combat the narrative that Minnesota or Duluth are too cold for certain things."

Colorado-based Simply Tiny Development proposed the eight-unit tiny home development at a small site in the Gary/New Duluth neighborhood on the far west side of town. It is expected to cost $1.5 million and include off-street parking for each unit.

The other homes, which will mostly range from about 200 to 250 square feet, will be in the Central/East Hillside and Fairmont neighborhoods.

Another eight townhouse units are also planned on land the city is handing over to developers.

The first round of Rebuild Duluth, which opened for applications in 2019, saw the city give away 10 properties to developers last year for a total of 30 new housing units. Some of those projects, which are vetted by city officials, are moving forward toward an end-of-2021 deadline, though the pandemic slowed progress on others.

"It took longer than we anticipated to get to construction and closing," Hale said. "We're trying to learn from that to give some understanding and flexibility for developers."

More free properties are expected to become available for applicants on a rolling basis.

Two other housing developments took small steps forward at Wednesday's DEDA meeting, including a project at a former dairy plant in Lincoln Park and a 32-unit apartment complex inside the historic and long-vacant St. Louis County jail downtown.

"It's a beautiful, historic building, but it's very complicated," Hale said. "There are still steel jail cells."

Brooks Johnson • 218-491-6496