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Housing shortage forces Carlton County resident to move elsewhere

Zach Stirewalt had to look for a new apartment after two floors in Cloquet's Victory Apartments building were deemed unfit for habitation. Facing a critical shortage of housing, county officials say they are working with developers and scouting areas to build new housing.

Zach Stirewalt, formerly of Cloquet, takes a break from moving his mother-in-law to an apartment in Duluth on Tuesday afternoon
Zach Stirewalt, formerly of Cloquet, takes a break from moving his mother-in-law to an apartment in Duluth on Tuesday afternoon, Aug. 16, 2022. Stirewalt is familiar with moving things recently, having to vacate his apartment in Cloquet due to city orders. After they couldn’t find anywhere to live in Carlton County, they moved to Eveleth.
Jed Carlson / Superior Telegram
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CLOQUET – Zach Stirewalt was left with slim options when an order to vacate was placed on his Cloquet apartment building in April.

Stirewalt had two months to find somewhere to move, with the hardest part being finding a place within his budget.

Tenants hear options after staircase of Cloquet apartment building declared unsafe

Victory Apartments, where Stirewalt had been living, was an affordable option in Cloquet, but after safety repairs were not made to an outer staircase, tenants who lived in apartments on the top two floors needed to vacate.

Despite trying to find a place in Cloquet, which had been his home for 10 years, Stirewalt expanded the search elsewhere in Carlton County to take advantage of support programs.

As there were no affordable housing options available to him, he had to expand his search even further as time ran out to move out of his Cloquet apartment. He now lives in Eveleth.

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“We looked from April 14 to May 26, and we couldn't find anything in Carlton County at all,” he said. “Carlton County’s housing situation is very bad.”

Low stock, higher prices

The need for housing at all levels is high in Carlton County, and comes at a time when housing prices are on the rise, as well.

Mary Finnegan, economic development director for Carlton County, said she knows how critical the need is for housing.

“Housing is expensive here and it is also not really available,” she said.

At the county level, housing has been put on the back burner, according to Finnegan and should be looked at in the near future to prevent the issue from getting worse.

With the increased need, another issue is the rising costs of housing.

Carlton County housing costs.jpg
Gary Meader / Duluth News Tribune

Data from the Minnesota Housing Market Report for June 2022 shows a 162% increase from June 2021 to June 2022 in the price of a one bedroom home — a jump from $78,000 to $205,000.

While one bedroom homes saw the largest increase, two and three bedrooms saw increases of 33.8% and 18.6% during the same time period, respectively.

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When buying a home, the report said a buyer could expect to pay above the asking price of a home 55.9% of the time, and homes are also selling in less than 90 days.

And it's not just people who work in Carlton County who are looking for housing here. Finnegan visited a mine in Michigan and found out that many of the people who worked at the mine lived an hour away. She thinks the same thing could happen with a mine in Tamarack, which neighbors Carlton County.

“We would see spill off need in Carlton County,” she said. “Our already (high) demand for housing, which is being pinched, would be even more pinched.”

Another part of the problem lies with the age of the housing stock, according to Finnegan, something Holly Hansen, director of Cloquet's economic development authority, agreed with.

In 2014, the EDA had a housing study done and found out that 15% of the single-family housing stock in Cloquet was built in 1919 or 1920 and needed some upkeep.

According to the study, the percentage of nuclear families has also dropped in Cloquet from 44% in 1970 to 17% in 2010. With less nuclear families living in the city, Hansen said it means there are more individuals who need housing.

The authority’s plan is to initiate a new housing study in 2024.

How it is being addressed

Carlton County and Cloquet officials have voiced their thoughts on the importance of improving housing availability in the area, and the Cloquet EDA has housing as its second goal for the year, just behind improved broadband service.

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For the city, Hansen said the way officials have increased housing in the past has been through selling land to developers, but as of now the city does not have any additional plots to sell.

Other avenues Hansen said the city is trying to take include partnering with developers and connecting developers with land for sale. After a deal has been made on a property, city officials can help with possible financing options for the developer.

While she said they can always do more, Hansen was pleased with a lot of the housing projects that have come together in the city over the past couple of years. These include everything from affordable housing to higher end apartments, one being the Union Lofts building that was completed in May.

Zach Stirewalt, formerly of Cloquet, looks over to the doors as he moves his mother-in-law to an apartment in Duluth
Zach Stirewalt, formerly of Cloquet, looks over to the doors as he moves his mother-in-law to an apartment in Duluth on Tuesday, Aug. 16.
Jed Carlson / Superior Telegram

The need in Cloquet is not just for affordable housing, according to Hansen, but for housing at every level of the market.

“There has been consistent growth in Carlton County and Cloquet,” she said. “People want to be in a smaller town; small cities are an attractive place to raise their families or retire."

Census data shows that Cloquet’s population has increased from 12,124 in 2010 to 12,637 in 2020, an increase of 0.4%. Meanwhile, the county overall saw a population increase of 0.6% from 35,386 in 2010 to 36,207 in 2020.

Hansen said the region in general is waking up to the “enormous” need of housing in the area, and that it is not just an issue in Cloquet.

The city does have one project that will start construction in the fall: a duplex on Adams Street. The land was bought and sold by the city in November 2021.

“You think about redevelopment in general, and it is really hard work,” she said.

Boss Builders LLC, a local developer, is working on the planned duplex on Adams Street. Jesse Hecimovich, one of the company's owners, said working with the city makes projects easier to work on.

“It was a straight-up purchase,” he said. “It is a win-win all the way around.”

Since Boss Builders started 10 years ago, Hecimovich said he has seen the demand for their services increase rapidly in the past few years.

“We’re still super busy,” he said. “I heard projections that we could build like this for the next 10 years and still not have enough housing.”

Moving forward, Hansen hopes to get more projects up and running or use creative ways to turn buildings, like the recently condemned Solem Hotel, into housing opportunities.

“It takes partnership between cities, landowners and developers,” she said. “We’re here if folks want to brainstorm.”

Most recently the Cloquet City Council voted Aug. 2 to rezone a parcel of commercial land to allow for four additional apartments to be built at 807 and 809 Sunnyside Dr. The new apartments will be in addition to the nine apartments already on the property.

City Administrator Tim Peterson said the city has a consistent goal of adding housing, and increasing any kind of housing in Cloquet is beneficial.

"When we look at the ability of being able to add an additional four units, that is four more people that can hopefully find access to a home in Cloquet," he said.

Zach Stirewalt, formerly of Cloquet, loads a dolly as he moves his mother-in-law to an apartment in Duluth
Zach Stirewalt, formerly of Cloquet, loads a dolly as he moves his mother-in-law to an apartment in Duluth on Tuesday, Aug. 16. Stirewalt could not find housing within his budget in Carlton County and had to move to Eveleth after his apartment was deemed unsafe.
Jed Carlson / Superior Telegram

While the county does not have any active projects in the works, Finnegan said a new opportunity could lie in land surrounding the new justice center.

The county owns 80 acres there, with 28 acres for the justice center, and Finnegan said housing developments had been discussed for that land previously; however, there hadn’t been a water main installed.

“Before the water line that was never an option even though we owned the property,” she said. “There may be interest in it now.”

Finnegan floated the idea to the county board during her budget presentation on July 26, to which board members agreed it was a viable option and thought even selling the plots to developers would work, as well. No formal proposal on the measure was put forth at the meeting.

Finding affordable housing

For those in need of affordable housing options, the Cloquet/Carlton Housing and Redevelopment Authority is a place to start.

Debra Shaff, executive director of the organization, said there is a shortage of housing options for those in low income brackets in the county. The authority currently has a two- to three-year wait list for grants, with a total of 344 applicants as of July 31.

During the authority’s upcoming September meeting, Shaff said officials will recommend the list be closed to prevent false hope that someone might move up the wait list quicker.  

“It is really difficult,” she said. “We don't want to close (the list). What we need is housing, we need landlords to house low-income families.”

The authority helps those who need it through Section 8 grants, which can be applied for through the authority and would pay 70% of a resident’s rent per month.

Zach Stirewalt, formerly of Cloquet, talks about some of the troubles he had looking for a new place to live in Carlton County
Zach Stirewalt, formerly of Cloquet, talks about some of the troubles he had looking for a new place to live in Carlton County before he moved to Eveleth while he moves his mother-in-law to an apartment in Duluth on Tuesday, Aug. 16. He lived in Cloquet for the past 10 years.
Jed Carlson / Superior Telegram

While many apply for the program, Shaff said another problem they're facing are landlords who do not want to rent to low-income residents. They may have had a bad experience renting to someone with a Section 8 grant in the past, Shaff said, but her team spends time working with landlords and explaining that a “bad apple” resident is not always one with a Section 8 grant.

Additionally, landlords would need to have the authority inspect their property before allowing a Section 8 resident to reside there, and Shaff said some landlords refuse as they believe their properties would not pass an inspection.

If a building or property does not pass inspection and the landlord is unwilling to make the repairs, that property is effectively off the market for those on Section 8 vouchers, shrinking the pool of housing options even further.

The vouchers are also only valid for 60 days, meaning if an applicant can’t find a suitable place to live, they have to go through the process again.

The housing authority had offered an incentive for landlords to rent to Section 8 applicants, however Shaff said there was no motivation for them to do so and money was not the issue.

Shaff intends to hold focus groups with landlords to see what the housing authority can do to motivate them to rent to low-income or Section 8 residents in the county.

Planning for the future

The housing authority has a 75-room complex that was built in 2019 to help low-income families. The catch? It's full.

Shaff said she hopes to construct another building to increase the availability of low-income housing in the area.

While there will be roadblocks, Shaff said people doubted the housing authority three years ago when the organization set out to construct the first building.

As of right now, the housing authority does not have any land that would be ideal for the building, and the organization would also need to find partners to help with funding. The only funding the housing authority gets is from the U.S. Housing and Urban Development Authority, and embarking on another building project would require more money.

Hansen said the projects the HRA does for the community have been immensely important.

“That project in particular is incredibly important because it put more lower end affordable housing units on the market that are still managed by the HRA,” she said.

While there are no concrete building plans for the future, Shaff said she hopes to continue to work with the city of Cloquet to help plan for solutions to the issue.

Zach Stirewalt, formerly of Cloquet,runs his dolly down the ramp as he moves his mother-in-law to an apartment in Duluth
Zach Stirewalt, formerly of Cloquet, runs his dolly down the ramp as he moves his mother-in-law to an apartment in Duluth on Tuesday, Aug. 16.
Jed Carlson / Superior Telegram
MORE FROM DYLAN SHERMAN:
A total of 106 residents signed a petition against Loving Earth Memorial Gardens, a new green cemetery located in Blackhoof Township.

Dylan covers the local governments of Cloquet and Carlton County, as well as the Esko and Wrenshall school boards for the Cloquet Pine Journal.
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