Round two of the Rebuild Duluth initiative was set in motion Wednesday night by members of DEDA — local shorthand for the Duluth Economic Development Authority. The program provides pieces of undeveloped, often tax-forfeited property to businesses and individuals willing to help the city address its need for more housing, while also returning the parcels to local tax rolls.

On Wednesday, DEDA unanimously gave preliminary approval to plans to transfer ownership of five parcels of land to would-be developers, with three of the proposals calling for a combined 15 units of tiny housing to be built.

Most of those homes would range in size from 200 to 250 square feet and are estimated to cost between $100,000 to $175,000 per unit, according to Jason Hale, Duluth's senior housing developer. All three of these tiny house developments are expected to operate as rental properties.

Hale said he personally shies away from using the term "tiny home" to describe the diminutive structures, explaining that such a descriptor often is associated with portability. He stressed that all of the proposed small dwellings under consideration in Duluth are meant to be permanent structures to be placed on foundations and connected to standard city utilities, including sewer and water service.

Despite their small size, all of the homes in these developments would be self-contained with their own kitchen and bathroom facilities, as well as off-street parking. There are plans, however, for some shared communal outdoor space and solar gardens. The proposed developments would be located in the Gary-New Duluth, Central Hillside and Fairmount neighborhoods.

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Hale said the scale of the proposed multiple-unit "cottage home parks" would be a first in Duluth and perhaps in the state. He explained the benefits of such configurations, including economies of scale in development costs, as well as an increased ability to make use of otherwise dimensionally challenging lots.

On two other Rebuild Duluth sites, developers propose to construct a total of eight additional townhome units, bringing the total anticipated housing gain from this round of the program to 23 units.

If everything stays on track and the phase 2 Rebuild Duluth projects receive final approval, the necessary land transfers would be expected to close by June, and the housing should be ready for occupancy by no later than the end of 2022.

Jail redevelopment

In other business, DEDA also approved a resolution authorizing city staff to seek up to a $478,000 redevelopment grant for the former St. Louis County Jail property, 521 W. Second St., from the Minnesota Department of Employment and Economic Development. The owner of the property, Blue Limit LLC, seeks to develop 32 units of rental housing in the building. If the grant proves successful, DEDA would be expected to match the grant with local funds, dollar for dollar.

Blue Limit already has secured historic housing tax credits for the project that are set to expire in June, adding urgency to the grant application, said Chris Fleege, director of Duluth's planning and economic development division.

Any project would still be contingent upon approval by the Duluth City Council, but the redevelopment agreement would include an affordable housing provision that at least 10% of the units be reserved for households earning no more than 60% of the area median income.

Hale noted that plans for the former jail building, also known as the Burnham Building, have gone through multiple iterations over the past decade.

"It's a beautiful historic building, but it's very complicated, largely because there are steel-structured jail cells incorporated into the building, and it turns out that's not an easy thing to change," he said.

Although previous attempts to fund the project have fallen short, Hale said: "So far, in the iterations I have seen, this seems the most promising project. It's just again a complicated site, but we're hopeful this time we can make something happen there."