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Northland renters feel the squeeze as income wanes and costs climb

It’s not getting any easier for many Northland renters to shoulder rising housing costs.

Vickie Meyers, a 40-year-old AmeriCorps member who rents a home in Duluth’s Observation Hill neighborhood, said she couldn’t make ends meet without a roommate. Unable to go it alone, Meyers said she spent 1½ years living in the basement of her mother’s house before finding someone to share rent.

A county-by-county report recently released by the Minnesota Housing Partnership showed that since 2000, median Northland rents have climbed 10 to 30 percent, adjusted for inflation. Meanwhile, the median income of renters moved in the opposite direction, slipping 8 to 18 percent, also adjusted for inflation.

“If you look at what happened with the recession… the poorest people got hurt the most. The people with the most wealth are the ones that sort of figured it out and bounced back quickest,” said Jeff Corey, executive director of One Roof Community Housing of Duluth.

“It’s folks at the lower end of the spectrum that got hit the hardest and are still smarting the worst,” he added.

Meyers and her roommate pay $900 per month plus utilities for the two-bedroom home they share.

Covering that rent has been a stretch at times, Meyers said. At times, her tight budget has made for difficult decisions.

“I’ve had trouble affording medication. Luckily, I’m on assistance right now, but before that I couldn’t even afford the thyroid medication that I need to live,” she said.

Meyers said renters are sometimes faced with no-win situations.

“I’ve had to ask: Do I want to eat or do I want to keep a roof over my head or do I want to keep my medication?” she said.

Scarce assistance

The safety net for society’s neediest renters has frayed, said Trish Pylkka, a supervisor for the Human Development Center’s homeless program.

She noted that people looking for rental assistance typically face waits of at least four years for the federal Shelter Plus Care Program and two years for a Section 8 voucher.

At present, about 1,450 people are on a waiting list for Section 8 assistance, with about 950 seeking housing in Duluth, according to Jill Knutson-Kaske, executive director the the Duluth Housing & Redevelopment Authority.

“The board and lodges are full. The women’s shelters are full. The emergency shelters are full. There’s no place to put people. They’re literally on the streets, unless they’re able to stay with friends or family,” Pylkka said.

Even those who make it to the top of waiting lists for rental assistance have no guaranteed relief, Pylkka noted, citing the short supply of cost-qualifying housing.

“A lot of vouchers get wasted, because they just can’t find housing that they can afford,” she said.

“With these vouchers, you only have 90 days to find a place, and if you don’t find a place within the 90 days, then we have to put in a special request to see if they will extend it another 30 days. So that would give us 120 days to find a place, and a lot of times they won’t do that. So their voucher expires, and they have to start the whole process all over again,” Pylkka said.

From September 2014 to August 2015, Knutson-Kaske said that 23 percent of vouchers the HRA issued expired before they could be used.

Tight market

Knutson-Kaske said the recent recession increased pressure on the local rental market.

“When the housing market crashed, we saw homeowners who lost their homes flood the rental market. This has continued to create difficulty for people to find the rental housing they need,” she said.

“Overall, Duluth’s rental market is very tight. A healthy rental market generally sees a 5 percent vacancy rate. Last I heard, Duluth was closer to 3 percent overall, and possibly even less for low-income affordable housing,” Knutson-Kaske said.

Just 29 units of affordable housing are available for every 100 extremely low-income renters in St. Louis County, according to a recent report by the the Minnesota Housing Partnership.

Pylkka said renters have little leverage in today’s stiff market.

“The housing is so slim around here. It’s really a landlord’s market right now,” she said. “They can set their price and basically do what they want, and we just kind of need to conform to what they want.”

Disconnect

Perhaps nowhere in the region is there a bigger disconnect between renters’ incomes and rental rates than in Carlton County. Since 2000, the median income for renters has declined by 17 percent, according to the Minnesota Housing Partnership report. Meanwhile, the median rent has increased by 30 percent during the same period.

Holly Butcher, community development director for the city of Cloquet, said her community received $1 million in funding earlier this year to renovate eight commercial single-family rent-controlled housing units.

“But that will only put a microscopic dent into a serious issue,” she said.

Cloquet lacks some of the affordable housing resources Duluth boasts, Butcher noted.

“We haven’t connected ourselves to a proactive nonprofit development branch to work on some of these issues. But we’re trying to do that right now,” she said.

In 2011 Cloquet worked with One Roof to establish the first three Land Trust homes in Cloquet.

Corey views the unflagging popularity of Land Trust homes as evidence of a stressed rental scene.

“Demand for Community Land Trust homes has been just on the upswing the whole time. We had one slow year during the recession and the crash. But otherwise, we were selling houses like gangbusters right through the worst housing market that we’ve seen in probably 40 years,” he said.

“What that told us is that it’s tough for lower-income people to rent in Duluth. And even if the economy’s shaky and their incomes might not be going up, if they can jump out of the rental market and get into home ownership, they’ll do it in a heartbeat,” Corey said.

Despite its efforts, Carlton County has struggled to keep pace with demand for rental housing. The most recent federal census showed the county’s population grew by about 10 percent in the previous decade with the addition of about 1,300 people.

“That’s a very big jump in growth. It made us the fastest-growing county in the region,” Butcher said.

Growing need

Corey said that while the need for affordable rental housing has intensified, the financial means to address the challenge often have been lacking.

“We need more quality rental housing in our community for sure. We need more resources,” he said.

Corey observed that federal Community Development Block Grant and HOME funding is about half what it was 20 years ago.

 “And that’s not adjusted for inflation. That’s real dollars,” he said. “So if you adjust it for inflation, it’s probably more like a quarter of what it was 20 years ago, and Congress has on the chopping block right now a 93 percent cut to the HOME program. That pretty much takes it away.”

“It’s really tough to have more affordable housing development happen, when our local resources to leverage state and federal resources are so diminished,” Corey said.

Pylkka sees no fix on the horizon.

“I can’t see that it’s going to get better anytime soon,” she said.

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