A study conducted last year estimated Duluth will need an additional 3,800 affordable units — which the task force defines as housing available to a family making $50,000 or less a year — over the next decade. The city is on pace to develop 1,200, and just doubling that number would cost up to $12 million per year.
“As a whole community — it doesn’t matter which price point you’re talking about — we are short housing,” said Lynn Nephew, a commissioner for Duluth’s Housing and Redevelopment Authority who served on the task force. “But the one place we are lacking most is that lower income stock.
The group, which included representatives from the public and private sectors, has been meeting monthly since September. The mayor will decide if and how to act on its recommendations, some of which would require City Council approval.
Members proposed the use of general obligation bonds, which would require the city to adjust its current budget or raise levies, or revenue bonds, which would funnel income from a specific project into housing.
The task force also suggested the city institute a loan guarantee program that ensures lenders won’t lose their investments if a project fails, which in turn lowers cost barriers for developers by allowing them to borrow at lower interest rates.
Members also encouraged the city to educate homeowners about ways to add units to their existing properties, a nod to tiny houses.