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‘Best of The Globe 2018' now underway

Group extends efforts to provide affordable housing in Duluth, up the shore

t090618 --- Clint Austin --- 091018.S.DNT.ONEROOF.C03 --- Corby Hernandez of Red Lake Falls, Minn. owner of Scitus Construction installs carpeting in the great room one of four homes being built by One Roof in Grand Marais Thursday afternoon. --- Clint Austin / caustin@duluthnews.com1 / 4
Site work is underway for four additional homes being built by One Roof in Grand Marais, Minn. --- Clint Austin / Forum News Service2 / 4
Corby Hernandez of Red Lake Falls, Minn., owner of Scitus Construction, uses a nail gun to install siding on one of four homes being built by One Roof in Grand Marais, Minn. Clint Austin / Forum News Service3 / 4
Corby Hernandez of Red Lake Falls, Minn., owner of Scitus Construction, installs siding on one of four homes being built by One Roof in Grand Marais, Minn. Clint Austin / Forum News Service4 / 4

DULUTH—You could say that Bob Ryan knows how to stretch a dollar.

Ryan, the CEO of Odyssey Resorts and Development Inc., recently contributed $50,000 to One Roof Community Housing, and that private investment helped the organization obtain another $720,000 from the Minnesota Housing Finance Agency.

Those funds will be used to address a very real need for more affordable housing, both in Duluth and up the shore, where Odyssey operates Breezy Pointe, Larsmont Cottages, Grand Superior Lodge, Caribou Highlands Lodge and East Bay Suites.

Ryan said some of his own employees working at Odyssey's North Shore vacation properties have struggled to find affordable housing in the area.

"As more and more properties up there turn to vacation homes, it takes away housing stock for more affordable housing," Ryan explained.

"Housing needs are tremendous up the shore," he said, noting that many other employers are feeling the pinch, too.

Indeed, Mary Somnis, director of the Cook County/Grand Marais Economic Development Authority, said that a study group pulled together in 2015 "determined that the No. 1 challenge to economic prosperity here is the shortage of workforce housing."

After further analysis, Somnis said it was determined that Cook County would need to build 25 new homes per year for the next five years, plus add 75 rental units to the mix for a total of about 200 more residences, to meet the pent-up demand for workforce housing.

Somnis compared what is happening in Cook County to what occurred in Vail and Aspen, Colo., 20 years ago.

"We're very lucky that we live in this beautiful place where people want to be, but that has changed the real estate market here," she said, noting that many people of modest means have been priced out of the picture.

Somnis said matters are further complicated by the county's relatively slim supply of buildable land, with more than 90 percent of its property under public ownership and largely held in conservation.

In conjunction with state funds, Odyssey's contribution will be used to develop seven Community Land Trust homes in Grand Marais and eight more in Duluth.

One Roof has stepped up efforts to meet the region's growing need for affordable housing. It's an umbrella organization that promotes home ownership through the Community Land Trust and also develops rental housing.

Historically, One Roof has been most active in Duluth, but it has reached out in recent years to Superior, Cloquet, Proctor, Hermantown, Two Harbors and now Grand Marais and Lutsen.

On an annual basis, One Roof aims to add about 15-20 single-family homes, plus about 35 multi-family housing units to the Northland scene, said Jeff Corey, the organization's executive director.

Land Trust basics

Community Land Trust homes, like the ones now being developed in Grand Marais and Duluth, usually are offered for sale to income-qualified buyers at about 20 to 30 percent of their actual market value. The program serves households that earn 80 percent or less of the area median income.

That typically equates to people making between $25,000 and $50,000 per year, said Jim Philbin, director of the Community Land Trust.

"For folks in that income range, there just aren't a lot of options to buy a quality home in their community. Typically, the things that are available are real fixer-uppers," he said, noting that requires yet more time and money.

Philbin said that the homes the Land Trust rehabilitates sell for between $75,000 and $140,000, "with the vast majority being in the $80,000 to $110,000 range."

While people who buy Land Trust homes get a price break upfront, they also agree to sell at a similar discount if and when they put that house back on the market in the future, as the property remains forever part of the community's pool of Land Trust homes.

This week, an open house will be held to mark the completion of One Roof's 285th Community Land Trust home.

In an eventful week, Benjamin Evans and his wife, Ashley, closed on a three-bedroom Land Trust home in Proctor on Friday, one day after the birth of their son. The couple recently moved to the area from Tennessee and they have two other children, ages 3 and 2.

Evans said the new home should satisfy all his young family's needs for an affordable price.

"We are in a restarting place in our lives, and this is the perfect restarter home," he said.

'Leverage everything'

Even relatively modest amounts of local seed money can help unlock substantial follow-on assistance from organizations such as the Minnesota Housing Finance Agency, Corey explained.

"Leverage is everything," said Corey, adding that when local employers invest to provide workforce housing, it sends a powerful message.

One Roof has also received financial support from the Fond du Lac Band of Lake Superior Chippewa, and Corey said such local partnerships are essential.

"A great example is with our tax credit proposals for rental housing. It's not atypical for a project that gets funded in Duluth to receive several million dollars of equity in exchange for maybe a couple hundred thousand dollars of local investment," he said.

"If you go forward for an application to the state without local investment, you really don't have much chance of getting it," Corey said.

As for federal funding for affordable housing from the U.S. Department of Housing and Urban Development, Corey said that support is roughly half of what it was 20 years ago, without accounting for the effects of inflation.

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