As the economy continues to distance itself from the 2009 recession, homeowners' incomes and housing values are rising in Duluth, according to a report released Monday.
But the healthy and growing homeownership market for middle income families was offset in the rental market, where wages are not keeping up with rising rental costs, the annual study by the city reported.
"We have a clear affordability gap in our community," said Mayor Emily Larson at a City Hall news conference Monday, citing a 12 percent increase in rents in 2015 offset by only a 4 percent increase in average wages for people who rent.
Between 2014 and 2015, the average monthly rent in Duluth rose by almost $100 - from $757 to $851.
"No more than 30 percent of (a person's) income should go toward housing," said Keith Hamre, Duluth's planning and construction services director.
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The average median household income for homeowners in Duluth in 2015 was $64,563, compared to just $21,393 for renters. The average home in Duluth sold for $151,988 in 2015, up sharply from $137,850 in 2010.
The report, the city's 15th annual Housing Indicator Report, was released in conjunction with a City Hall meeting between city officials and officials with the Minnesota Housing Finance Agency based in St. Paul.
The meeting was a follow-up to a 2014 housing summit at which it was identified that Duluth would need to add 2,300 housing units by 2020 to accommodate an expanding workforce.
To that end, Larson said Duluth increased its housing stock by 335 units in 2015 - many of them apartments in larger complexes, the new study reported.
Following the news conference, Larson, Minnesota Housing Finance Agency Commissioner Mary Tingerthal and others toured a pair of single family homes that have been condemned but have the potential to be rehabilitated.
Tingerthal said she also was meeting with a lender to help find solutions that would "tip the balance," to find more money for rehabilitation of older homes. Nearly half (45 percent) of Duluth's housing stock was built in 1939 or earlier.
Hamre explained that vacancy rates for rental properties dropped to 3.3 percent in 2015, down from a five-year high of 4.6 percent. The current rate, the study reported, creates a more competitive rental market "resulting in cost-burdened rental households," said the study.
Larson said "creating decent, affordable housing," still is driving discussions among state and city leaders.
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Housing report
To view the entire 2015 city of Duluth Housing Indicator Report, go to duluthmn.gov/media/517578/2015-Housing-Indicator-Report.pdf
