Duluth celebrates first 'cottage village' to provide mixed-income housing

A gathering of people outside three houses.
Duluth officials celebrate the ribbon cutting of the new Fairmount Cottages development on Monday. It's one of the first developments to take advantage of the city's 2019 change to its zoning code that allows for "cottage home park developments," which feature clusters of homes grouped together in a single lot.
Dan Kraker | MPR News

Duluth officials unveiled a unique development this week that showcases a new housing model, one that attempts to create both affordable mixed-income housing and a strong sense of community.

The project, called Fairmount Cottages, in western Duluth, consists of 18 small, brightly colored, individual one- and two-bedroom homes. They are clustered together in two groups that face inward toward a common greenspace.

It’s one of two new developments in Duluth that take advantage of a change the city made to its zoning code in 2019 that allows for “cottage home park developments” — essentially clusters of homes grouped together on a single parcel of land.

“This project is built to provide a sense of community for those who live here,” said Jill Keppers, executive director of the Duluth Housing and Redevelopment Authority, which built and manages the development.

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“The whole idea is for the cottages to face inward, to have that green space, to have the trail connectivity.”

The homes are small, bright and airy. One-bedroom cottages are 620 square feet; two-bedroom homes are 720 square feet.

An exterior view of three housing residents.
Homes in the new Fairmount Cottages development in Duluth face inward toward a shared greenspace, and are connected by sidewalks to encourage a close-knit community.
Dan Kraker | MPR News

Rental rates will range from about $750 per month for the most affordable unit, to $1,700 per month for a market rate, two-bedroom cottage. Households earning between 50 and 100 percent of the area median income are eligible to rent.

“Making it mixed-income was really important to the housing authority,” said Keppers. “Research has shown that when you’re living in mixed-income communities, that you have more opportunity, that you see things that perhaps you wouldn’t see in a more homogenous neighborhood.”

Duluth City Council President Janet Kennedy, who grew up near the new development, said that’s what she experienced when she moved to the area as a young person after her parents divorced.

“When I moved out here, living across the street from people who had homes and lived differently, it really impacted me to understand that I can go further, I could do it. And it gave me a drive,” Kennedy said.

The Duluth HRA kicked in $1.5 million for the project. North Shore Bank contributed $2.5 million in revenue bonds. The city of Duluth allocated $1.15 million — part of the $58 million in federal funding it received from the American Rescue Plan to recover from the COVID-19 pandemic.

Duluth set aside $19 million of that funding specifically for affordable housing projects.

The exterior of a house.
A home in the Fairmount Cottages development in Duluth. 1 and 2-bedroom homes are 620 and 720 sq. feet, and are available to households earning between 50 and 100 percent of the region's area median income.
Dan Kraker | MPR News

Around the same time, Duluth changed several of its zoning rules to allow for different kinds of housing — from cottage home developments, to tiny homes squeezed into narrow lots — to help alleviate the city’s significant shortage of housing of all types.

“We have to keep trying things if we want to get different outcomes,” explained Duluth Mayor Emily Larson.

“We have to keep pushing new ideas, and new funding strategies and new models if we want to make sure that everyone is getting what they need. And so this is one part of that.”

Fairmount Cottages is the second development in Duluth to take advantage of the cottage home park zoning change. The other, located near the mall, features larger, privately-owned homes with attached garages.

“It’s a similar concept where it’s more of a community feel, where you walk out your back patio, and you can walk and interconnect through sidewalks to the other units,” explained developer Rob Irving, who also built the Fairmount Cottages project.

But it’s aimed at a different clientele. The second development consists of 14 homes that are 1,850 square feet each. Only one has hit the market, and it’s already sold for $529,000. Irving said the cottage zoning allowed him to build more houses on the land than if he would have used more traditional single-family zoning.

“Density always helps with offsetting costs,” Irving said. “It costs $100,000 more to build a house today than two years ago. And this cottage development is just one more zoning tool where we can get a little bit more density to help offset it.”

Irving plans to put two more houses on the market shortly, and anticipates completing the development by the end of next year.

Meanwhile, Jill Keppers said the Duluth Housing Redevelopment Authority has already gotten lots of calls about the Fairmount Cottages, from a variety of potential renters, looking to move in by Oct. 1.

“And so I’m excited to see what our final residence mix looks like.”