What's behind up-and-coming Duluth's sluggish population growth?

Last month, Duluth Mayor Emily Larson stood on the steps of City Hall, flanked by other city officials, to highlight the new census results.

"You know, for decades, we have talked about [Duluth having] a stagnant population, and it has felt that we are more vibrant and that we are growing,” she said. “And it turns out that we are."

The 2020 census results, which were delayed until this summer because of the COVID-19 pandemic, found that Duluth did grow — just not by very much. The city has added 432 people since 2010. Still, Larson called it a victory for Duluth.

“Because what that means is, new energy coming in. And that doesn't even count the perimeter area in which many people want to live with a little more elbow room than the density of a city. So we're excited that we are now at 86,697 residents."

That equates to a growth rate of about 0.5 percent since 2010, much lower than other regional centers around Minnesota. By comparison, Rochester grew at a 14 percent clip, St. Cloud by 5 percent and Moorhead by 17 percent.

There is evidence to suggest there was a significant undercount of college students in Duluth last year, possibly by a thousand or so people. That’s because when the census was taken, at the beginning of the pandemic, college classes were all virtual.

But even if you add those numbers in, Duluth's growth rate still lags behind those other cities.

The population has barely budged in the past 20 years. A decade ago former Mayor Don Ness launched a campaign he called 90 x 20, to grow the city’s population to 90,000 by the year 2020.

Duluth was in a much different place when Ness took office, he recalled, just getting back on its feet after a severe economic downturn.

"It was important to kind of show the path forward and to say, you know, we want to change our orientation, we want to be a healthy community that retains its young people and looks to grow over time," said Ness.

But that growth has proven elusive, despite a lot of optimism around Duluth, as reflected by soaring tourist numbers, positive national press, and lots of anecdotal stories about people moving to Duluth for its natural amenities and quality of life.

“It seems like a paradox, because we've got all of this energy and excitement that's valid and authentic about Duluth,” said Duluth City Council Vice President Arik Forsman. “And yet the population numbers have not been matching that energy and excitement about the city.”

Housing, geography, jobs

In interviews with several people in Duluth city government and community and economic development groups, a few key themes emerged to help explain the city’s population paradox. A big one is housing.

"There have been reports to us that, you know, jobs have been turned down because people haven't been able to find a place to live that's going to meet their expectations,” said Adam Fulton, the city's deputy director of planning and economic development.

Duluth needs more housing across the board, especially affordable housing, Fulton said. The city added 1,630 new housing units between 2010 and 2020, and has another 600 under development. Still, a recent report found an urgent need for 3,600 apartments and homes.

The new census data helps drive home the point that housing is a big part of what’s holding back growth. It shows that in Duluth neighborhoods that have added housing, the population in those areas has grown.

"There’s an increasing consensus in housing research circles that the housing crisis is fundamentally a supply problem,” said Karl Schuettler, research director and senior consultant at Northspan, a Duluth-based community and economic development organization.

“If we’re not adding new housing, we’re not creating space to add new people — and driving up prices in the process," he said.

But Duluth faces unique challenges in trying to add new housing. The city’s steep, rocky topography is “what makes our city beautiful,” said Forsman, “but it’s also what ups the level of difficulty around some of the issues that we have to wrangle with.”

Duluth is also landlocked, surrounded by Lake Superior on one side, and rural townships and cities on the other side, with very little suburban-style housing in between.

"Whereas other areas like Mankato or St. Cloud have some surrounding farming communities that they can knock out a farm field and put up a subdivision pretty cheap and pretty quickly," said Noah Hobbs, lending director at One Roof Community Housing in Duluth.

Duluth is partly a victim of its own success, Hobbs said, by creating a place where people want to live. That stands in stark contrast to the 1980s, when people were leaving the city in droves, prompting someone to put up an infamous billboard along Interstate 35 that read, "Will the last one leaving Duluth please turn out the light."

"And now people do want to be here and live here and work here. And our building of new units just hasn't kept up with that optimism," Hobbs said.

Duluth’s housing stock is also aging. Nearly half of all homes were built before 1950. It’s a problem Schuettler experienced firsthand when he moved back to his hometown after graduate school.

“Even if it's somewhat more affordable than what you'd find in another market, that may not be exactly what people are looking for,” he said.

Employment is another key ingredient. People need jobs. But economic development experts say jobs aren’t necessarily the most important factor in a region’s growth.

"In the past, I think we all would have thought that the leading indicator of whether you were going to be successful as a community or not in attracting families was whether you had jobs,” said Forsman, who also works in economic development at Duluth-based Minnesota Power.

“And I feel like with COVID, especially that script has flipped," said Forsman, who knows many people who live in Duluth, but work remotely.

The city has data showing a growth in remote working even before the pandemic, said Fulton. He said the number of people who live in Duluth — but whose place of employment was Hennepin County — grew from about 1,400 people in 2014, to 2,100 people five years later.

Forsman believes housing and child care are also critical ingredients to luring more people to Duluth, in addition to jobs.

Still, there are many couples who come to Duluth where one person has a job lined up, but the other has trouble finding work.

That's what happened for Michele Statz and her husband when they moved to Duluth from the Chicago area in 2017. She had a job at the University of Minnesota Duluth; he started networking. But it was a struggle to break in.

“He would go out for coffee with people. And one of their first questions would be, ‘Well, which high school did you graduate from?’ ” Statz recalled. “There was that idea of maybe not quite recognizing that folks are coming from other communities."

He eventually found a remote job with a Philadelphia firm. And now they love it here, Statz said, “to the point where we don't want to live anywhere else."

Which is great for Duluth, because the Statzes, as a family with two young kids, are a desired demographic.

Duluth has a lot of older people, and a lot of younger people, “but kind of that missing part,” said Schuettler, “if you look at Duluth's population age brackets historically, has been Gen X people who would be parents with children now."

As a result, there are a lot of smaller households in Duluth, made up of only one or two people. That helps explain that even as the city has added hundreds of new housing units in recent years, its population hasn't grown that much.

In fact, Duluth has never had as many houses and apartments as it does now. There are just fewer people living in them.

“And so you just end up with the household size declining pretty substantially over the past several decades,” said Schuettler.

Forsman contends that Duluth needs to figure out how to attract and retain more people like Statz and her family, people who want the quality of life in Duluth, and who can bring a job or two with them.

If the city continues to add housing by increasing density and create some jobs beyond the tourism sector, "we should legitimately have a shot to push 100,000 in the future,” he said. “I can't see why we wouldn't if we're strategic about it."

Better than Flint?

When compared to other older, Rust Belt cities — like Erie, Pa., Toledo, Ohio or Flint, Mich. — Duluth is actually doing quite well. All those cities have lost population.

“‘We're better than Flint’ isn't exactly a winning slogan,” said Schuettler, “but at the same time, I think it's worth acknowledging the depth of the economic challenge the city faced."

Duluth also is growing at a time when the rest of northeastern Minnesota, a region with the oldest population in the state, is declining.

"Population growth is really hard when you have an older population. It's really hard when you don't have particularly high birth rates,” said state demographer Susan Brower.

“Those are all things that are in place right now not just in Duluth, but across a number of cities. And so growth is it isn't always going to follow when there's a great place to live."