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Local View: Duluth has a model for fixing single-family housing market

An ongoing renewal of Duluth's business community seems to be happening nicely. But what about our lack of single-family housing?

David PetersonAs we head toward the year 2100, only 82 years away — the year when your great-grandchildren have children — what will the the legacy be, left by the citizens and leaders of 2018 Duluth? Will today's leaders have statues in parks and gardens paying homage to their leadership? Or will our legacy be housing blight?

In round numbers, the city has about 38,000 single-family homes. Of those, around 15,000 are over 55 years old. A house's life span is about 50 years before major structural issues need to be addressed. Of this 15,000, almost 9,000 are over 75 years old, well beyond the age when major issues need to be overcome.

A housing study completed for the city determined that to start putting things back in balance, around 130 new homes need to be constructed every year in Duluth. The city has been averaging about 35 units of new single-family construction.

Consider that from Piedmont Avenue to 46th Avenue West, there are approximately 2,800 homes that are, on average, around 106 years old. Consider also that rehabilitating a home 75 to 100 years old can cost about $135,000. You can do the math to estimate the cost of of redeveloping that area.

Even more concerning, today, if you buy a distressed home in Duluth's Lincoln Park neighborhood for $100,000 and invest the $100,000 to $135,000 necessary to bring it up to modern standards, the home would increase in value very little to offset the cost of the remodeling. The seeding of new homes into these neighborhoods is necessary to bring banks and remodelers and their investments into older neighborhoods, resulting in the potential for home-value increases.

Needed in Duluth is an overall housing strategy, covering one end of the city to the other. Strengths from one area of town can assist in overcoming market shortfalls in other areas. Patchwork here and there is just a Band-Aid approach that will be short-lived.

For many years, city leadership has looked outside the city to entice land developers from large metropolitan areas to come to Duluth to do housing subdivisions. But a better answer has been here in town the whole time. What seems to get missed is that normal single-family subdivisions do not economically work well in Duluth. Since 1990, the population of Duluth has only grown by about 1,400 residents. So we actually are trying to grow a housing market in an area of relatively stagnant population growth. It can be done, but it takes planning and leadership.

One housing development that has been successful in boosting Duluth's economy has been the Hawk Ridge Estates development on 52nd Avenue East. Structured very differently, Hawk Ridge is an example — and should be a national model — of how to create a housing subdivision for all income levels. Handled correctly, developments like Hawk Ridge Estates can be replicated, in different ways, from one end of Duluth to the other.

New housing construction in new subdivisions is not the only answer. But it can be the revenue source to underwrite what needs to be done to restore aging housing and to fill the gaps in other areas. Seeding neighborhoods across the city with new homes, along with the redevelopment and remodeling of older existing homes, can, in one generation, restore vitality that many of our older neighborhoods need. It will take time, but it is a path to housing self-sustainability, generation to generation.

There's a local minister in town who preaches, "You can't walk on water until you get out of the boat." Is it time for Duluth to stop waiting for an out-of-town developer to come and rescue our single-family housing market? We absolutely have the knowledge, ability, and funding to do it ourselves. Let's step out of the boat.

David Peterson is director of development and redevelopment at the Duluth Housing and Redevelopment Authority (duluthhousing.com). He's also president of the Minnesota Housing Development Corporation, a nonprofit community development corporation in Duluth.

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