Housing issues rise as priority in '24

 

December 22, 2023

Brady Slater

Lagom Restoration's Josh MacInnes works to clear debris from a property on Third Street in Cloquet.

For a minute, the demolition field outside of a home on Third Street in Cloquet made it appear as if an explosion had taken the porch clean off.

Come to find, it was the work of Lagom Restoration, of Duluth.

"We're going to restore it and sell it," said Josh MacInnes, one of the Lagom owners and three workers onsite at the small home located at 217 Third St. "We want to see good stuff happen in our communities. It needs some TLC, but it'll have a second life."

Upon meeting earlier this month, MacInnes described a property in rough, deteriorated shape, the last owner having let it go, unable to keep up.

The contractors were stripping it to the bones, and preparing to replace the enclosed porch, which had been collapsing under bad footings.

The city of Cloquet purchased the home from Carlton County for $500, before deeding the property to Lagom in November. As part of the deal, the city and Lagom agreed to split the special assessment of $5,153 for street and utility repair.

The contractor plans to add a second bedroom to the single bedroom house and resell the home after a complete rehabilitation, including new windows and refinished hardwood floors.

When it comes to solving the workforce housing crisis in the region, it'll be a nickel in the bucket. But it's progress. And Lagom agreed in its deal with the city that it'll be sold, rather than rented.

"We'd rather see it fixed up proper, and make it a good home for somebody," MacInnes said.

MacInnes and co-owner Ethan Weaver are socially conscious contractors. At a time when sources describe most rehabs and new constructions happening at the upper end of the real estate market, Lagom's business model aims at the decaying stock of workforce housing.

"This property is being fixed up to become a more attainable workforce house," MacInnes said.

Sometimes, letting the market decide what to fix and repair leaves gaps, MacInnes said.

Filling gaps in the housing market has been identified as a primary goal for both the city of Cloquet and Carlton County. Both entities are currently engaging in updated housing studies. Cloquet is paying $22,500 to consolidate the last 10 years' worth of efforts in order to learn "what needs still exist for housing styles in Cloquet," a city proposal said.

The county board authorized a similar housing study and expects results in the first quarter of the new year. Additionally, the board approved, this month, creation of a Housing Trust Fund, making it eligible to apply for federal and state grants at a time when housing investment funds are being made priority from the White House on down. As soon as this summer, Minnesota will begin to make available its record allocation of up to $1.8 billion in legislative-approved housing dollars.

"We need to be ready," county coordinator Dennis Genereau told the board this month.

The five commissioners unanimously and enthusiastically supported the new housing trust fund, and each will need to nominate a community board member to help oversee it.

"I one-hundred-percent support this," commissioner Tom Proulx said.

Having a trust fund gives the county a place to dedicate future housing funds. Already, the county received $200,000 in housing support from the state this year, with another $150,000 coming next year.

Indeed, the new year is shaping up to be monumental when it comes to directing rehabilitation and construction resources, as well as the establishment of housing priorities.

"If anything, the need has increased," said Mary Finnegan, executive director of Carlton County Economic Development. "The number of houses being built is not moving in the direction we want.

"We're seeing some new builds, most at the very higher end. ... [But] we're not meeting the needs of the workforce - the mid-income people."

Finnegan shared a housing profile based on 13,587 households in the region. It was a snapshot of the housing situation at the moment. Forty-seven percent of rental units in the county were built before 1970, and 43-percent of homes had been built before 1970. Increasing rents had left 2,934 people in the county as cost-burdened, or at risk of being forced to choose between a home and other basic needs such as food or medicine.

Expanding access to housing is one way to alleviate the strain.

The county is in the early stages of visiting communities, trying to identify parcels available for development.

"Allocating that amount of money has put a fire under us," Finnegan said of municipalities as a whole. "We can't just talk about it, we have to do some things."

For now, everything is on the table, including ideas such as making homes available to people through a land trust, by which one buys a home, but doesn't own the land, and would ultimately sell the house back to the trust if they were to leave.

Homebuyers would get the benefits of home appreciation, and the values of home ownership and independence, Finnegan said. It's far from the only idea. But there are certain tenets the county wants to uphold.

"We like to think of it as mixed-use housing," Finnegan said. "We don't want everybody to be concentrated. ... We want higher-end and smaller homes together. We don't want to concentrate low-income people in one specific area like they did in the 1960s and '70s."

The county economic development authority's involvement at all in housing indicates a shift in prioritizing housing.

The EDA started under the pretense of making nontraditional loans available to grow businesses. But there are so many places offering loans now, Finnegan and the county have pointed the EDA in another direction, that of supporting housing growth.

One way Finnegan projects it can help is by giving loans to a developer or private citizen who meets certain criteria, while setting a restriction on the mortgage that if the property is sold the EDA would be guaranteed back its investment.

"We'd get our initial investment back and it could end up being not a risk," she said.

Several department heads have been working cooperatively on housing solutions, since housing issues cross into most departments. For instance, housing instability causes ripple effects in health and human services.

One thing commissioners cautioned in the weeks leading up to establishing the housing trust fund: helping to solve the crisis would need to be self-sustaining through grants and things like EDA revenues. Similarly, the land department is a self-sustaining office, driven by things like logging contracts.

Brady Slater

"The commissioners' biggest fear is they didn't want to commit levy dollars to this, and they don't feel comfortable making a long-term commitment to something," Finnegan said. "They're very resistant about adding anything to the levy."

Effective solutions would mean more home and property owners - more people making tax contributions.

"The good thing about this is it generates more money to the tax rolls," Finnegan said, "which would reduce levies."

That'd be an all-time conversion of an 8-10 split - solving a housing crisis while curbing tax bills by spreading them around more.

"It's probably long overdue," Finnegan said of attention being paid to one of 2024's hottest topics.

 
 

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