Rent Burdened Duluth

By KBJR News 1

May 31, 2012 Updated May 31, 2012 at 10:10 AM CST

It's a problem often echoed in complaints by Duluth renters: rent in Duluth does not match income levels.

With the release of the city's 2011 Housing Indicator Report, we're seeing just how inflated rental prices are in Duluth, and what that means for those trying to call Duluth home.

Landlords often get a bad rap.

"I deem myself a decent landlord. If something is broken, we get it fixed," says Kristi Ducharme. She became a landlord after experiencing horrible experiences as a renter.

It seems like a given: a landlord taking care of problems in the unit. But in a city with aging infrastructure, and a high demand for rentals, many could share horror stories.

"We sent our check in and he actually called us trying to charge us a late fee because he changed his address to where it was supposed to go. Another time, we had to get some tile put up on our ceiling and all he did was give us the big piece and we actually had to cut it down and do it ourselves," says renter Eric Archer.

Some landlords get away with unresponsiveness and continue charging high rates because put simply, they can.

"It's a landlords market. Totally a landlords market. The demand for rentals is high," says Kristi.

And the numbers are there to prove it. The 2011 vacancy rate in Duluth was 3.6%, meaning there isn't a healthy number of empty units.

"If you have very little supply, rents will rise to a premium," says Keith Hamre with Duluth's Community Development division.

In fact, rents have risen so high, that Duluth has the highest rate of cost burdened renters in the state, with 54% of renters paying more than a third of their income in rent.

For Eric, it was enough of a burden that after years of living in Duluth, he moved right outside city limits to Hermantown.

"One reason I've lived here for four years is because everytime I go to look for something else, there's nothing out there."

But as a landlord of multiple Duluth units, Kristi says, the rent she charges isn't too high, rather, the upkeep of these old buildings is expensive and she has to charge a rate that will allow her to up-keep the properties.

"I have bills to pay, and the city of Duluth makes it really tough for us to even make an income off the properties," she says. "The money I make, goes all back into the units itself."

Another problem, Keith Hamre says, is over 80% of licensed rentals in Duluth are single family homes. Apartment and condo developments are few and far between, and almost non-existent are those priced for young professionals.

"We don't have a lot of options there. We don't have a lot of large, or moderate sized apartment complexes," says Hamre. "A lot of the condominiums we have in our community-we don't have a lot- are a lot higher priced. For empty nesters."

It's a rental market that has Eric so frustrated, he's now looking to buy.

Kristi is also a licensed real estate agent, and she says if you have good credit, and plan on staying in Duluth for at least four to five years, buying a home is going to be a better option. She says in many cases, your mortgage can very well be less than rent.

Courtney Godfrey
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