With trail access throughout the city and Lake Superior on its doorstep, Duluth stands out for many reasons. 

“People love the green space. They love the walkability of Duluth. They love being close to the lake,” said RE/MAX Realtor Kevin Kalligher. “Virtually any house that you live in on this hillside is within a five minute drive of any trail system. I mean, what other city are you going to get that in the United States?” 

Lenna Johnson and Peter Pfankuch grew up separately in Minneapolis before meeting in Montana. With their Minnesotan roots, the couple recently moved to Duluth. 

“It feels really special to have that access, to take a deep breath. Whether it’s on the lake or in a forest or by a river, it feels like a really special attribute of this community,” said Pfankuch. 

Some people are moving to Duluth to escape areas with more wildfires or other environmental issues. 

“We’re seeing people already move from California or Utah or other places because they know that Duluth is potentially a climate-refuge city,” said Duluth Housing and Redevelopment Authority (HRA) Executive Director Jill Keppers.

REGARDLESS OF THE REASON PEOPLE ARE MOVING HERE, IS THERE ENOUGH ROOM FOR AN INFLUX IN THE POPULATION?

Duluth used to have a population of around 110,000 people. The city now has a population of around 86,000. These numbers indicate a city built for a higher population, but numbers are not everything.

“In a lot of ways, Duluth has kind of an excess of infrastructure because of the fact it was once built for a larger population. But that’s only true for certain parts of our infrastructure. I would say the size of our streets and our gray infrastructure in terms of our sewer systems and things like that. I think that we have done a lot of work in that area and we are pretty well equipped in that area. We also have a lot of natural resources,” explained University of Minnesota-Duluth Bureau of Business and Economic Research Director Monica Haynes. “But housing is tricky because people now tend to live with fewer people in a household.”

More housing is needed, but the city’s stock has not kept up with demand.

“The market right now is really tight, and we need housing at all levels. We are looking at our large employers like Cirrus and Essentia and UMD trying to bring in new employees, and these employees need to find a place to live,” said Keppers. “People are wanting that three-bedroom, two-bathroom, open-concept kind of design, and Duluth, having the oldest housing stock in the state, doesn’t have a lot of that unless you’re building new.”

Home buying is a competitive process with fewer options available.

“It was really what was the option- singular- that was available rather than waiting until we had a multitude of different places to look through and look at. It was really where in and around the city we wanted to move, and it was the one place that was available there,” said Pfankuch. “We did move in November, which isn’t a very common time of year to have available housing and we recognize that. But there certainly wasn’t a plethora of options at that point.” 

INCREASING COSTS OF HOUSING

With nationwide issues putting more pressure on an already difficult market, the cost of housing in Duluth has continued to rise. 

“If homes are priced right in good locations with pretty good condition, they’re selling within 72 hours,” said Kalligher. “When I got into this industry in 2017, the average sales price of a home was $180,000. The average sales price of a home today in the greater Duluth-Arrowhead region is $330,000.” 

Kalligher added that the issue is mostly supply and demand. 

“We’ve got a lot of buyers. We have a few really old homes here in Duluth. Usually with that type of supply and demand imbalance, you’re going to see prices go up and increase exponentially,” said Kalligher. “But I definitely think that is one part of things where you have someone that comes in, writes, 20, 30 grand over cash. First time home buyers, they’re only 5% down. They can’t compete with that.”

Affordable housing is also limited. Noah Hobbs used to be a City Councilor and is currently the Director of Strategy and Policy for One Roof Community Housing. He says that even without climate migration, the city does not have enough housing. 

“We did a housing study in 2019 that showed that we had a need of about 3,200 units that are affordable for folks earning 80% below the area median income. A couple of years ago, we had a study done for downtown alone that showed that we needed about 1200 units,” said Hobbs. “So we’re already operating at a deficit of about 4,000 when all is said and done.”

WHAT IS BEING DONE?

Multiple organizations in Duluth have been working on increasing the city’s housing stock. This includes HRA projects for affordable housing, such as Fairmont Cottages and both senior housing and family housing at Harbor Highlands. One Roof’s projects include Decker Dwellings, Brewery Creek, Brae View, and other new builds and acquisition rehabs. 

To make it easier for developers, the City of Duluth has made adjustments to certain regulations. This includes the elimination of mandatory parking minimums and the ability to build on 25-foot lots. Even with all of these efforts, Hobbs says more needs to be done. 

“We’re certainly not building enough to meet the meter, maintain the growing population, and that’s why we have that mismatch of about 4,000 units that we could add,” said Hobbs. “We’re going to have to get exponentially more serious on meeting the demand if we want to grow”