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Business North - The Daily Briefing - Business Newspaper Online
Duluth officials address housing dilemma
PHOTO: Chris Eng, left, the city’s director of business and economic development, answers a question posed by Chamber Director of Policy and Education Roger Wedin.
Duluth has an overabundance of jobs and a dearth of housing where workers can reside, city of Duluth officials said at a Tuesday Duluth Area Chamber of Commerce forum co-sponsored by the Duluth News Tribune.
About 1,500 news jobs were created during the last year and employers currently have 1,000 unfilled positions, said Chris Eng, the city’s director of business and economic development. When looking at the larger region, 5,000 positions are currently available, he said.
Given those numbers plus future projections, Duluth will need 1,000 new housing units by 2017 and 2,300 by the year 2020, added city Director of Planning and Construction Services Keith Hamre.
“With 35 to 40 new construction permits issued per year for the last three years, we’re far behind the curve” in reaching that goal, he said.
Many obstacles must be overcome, they said:
• There’s a lack of infrastructure to accommodate new homes.
• Many older tax-forfeited structures need to be demolished, but a limited amount of municipal funds are available.
• Construction financing is difficult to obtain. As a result of the real estate collapse, Hamre and Eng said regulators have made it much more difficult for banks to issue loans for housing projects, especially large multi-unit developments.
“One of things that lenders want to hear is how do we can share risk,” Hamre said.
Eng suggested a couple of options, including creation of employer-assisted housing funds, the relaxation of income restrictions on tax increment financing districts for residential housing, extensive remodeling of older single-family homes, the conversion of former schools into multi-family apartments, tax abatement and the potential donation of city land for housing projects (the land would serve as collateral to obtain bank financing).
“We need to be partnering with our contractors, our developers and our lenders,” Hamre said. He hopes to reconvene the housing summit toward the end of May to create a community-wide housing plan.
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