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North Shore Development: Balancing the Need for Housing
By Stephanie Hemphill
January 31, 2001
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Small towns all across Minnesota are trying to attract businesses to provide jobs for workers. In Cook County on the North Shore of Lake Superior, businesses are thriving, but there aren't enough places for the workers to live. It's a problem that plagues many resort areas, and people in Cook County are coming up with some innovative solutions.

Bluefin Bay owner Dennis Rysdahl checks on progress at a rental unit he is building for employees. He has trouble keeping workers because of the affordable housing crisis in the Lutsen-Tofte area.
COOK COUNTY HAS MILES of gorgeous shoreline, millions of acres of pristine forest, and only 5,000 people. Lots more people would like to live here. Cook County is one of the fastest-growing areas in Minnesota. And there are plenty jobs available. Nearly every store and restaurant has a 'help wanted' sign on the door.

However, there aren't enough places to live. Real estate agent Judy Matchenbaker, based in Lutsen, gets frustrated when she can't help people find homes, like one family last year.

"Lovely gal, married, wanted to be here, couldn't find a home, had parental backing, could go up to $100,000; we couldn't find her a house. Her husband had a job in construction. I liked them, I knew the husband since he was in kindergarten, I wanted them to stay here and raise a family," Matchenbaker says.

You can get a lot of house in most of rural Minnesota for $100,000. Not in Cook County. Houses are hard to find for several reasons. Only about 10 percent of the land in the county is privately owned; the rest belongs to the federal and state governments. That drives up prices. On top of that, people with metro-area incomes and life savings are moving here in droves, building expensive vacation and retirement homes.

Even if you can find and afford a piece of land, you need to drill a well, install a septic system, and run a driveway. That's around $20,000 before you even dig for footings. Construction wages are high in Cook County, with all those retirement homes going up.

No one builds on speculation, no developer puts in tract homes. Until now. Realtor Judy Matchenbaker has teamed up with other residents in a non-profit group that plans to break ground this summer on Woodland Foothills, a 40-acre tract that could eventually house 40 families, living in affordable homes.

Locals refer to the spot as the "old mink ranch." It's a meadow, dotted with birches and pines, about a half-mile west of Lutsen. Judy Matchenbaker thinks a second-story window will offer a view of Lake Superior.

The group has patched together foundation grants and public funding to help pay for roads and sewage treatment. A new state program will help buyers with down payments and guaranteed loans.

"Somewhere down the line, I'd like to see elderly housing. There are visions of a day care, a community building, ski trails, walking trails. It's not just going to be warehousing of service industry people," Matchenbaker says.

Another partner in the project, Jeff Latz, owns the Clearview Store in Lutsen. He says it's not just about having places for his workers to live.

"It seems to be kind of a one-sided community, it's more of the 'haves.' The 'have nots' aren't even here because they can't afford to be. I think we have an opportunity to create more of a community here; these are the people who use the schools, the churches, the services, the businesses here," says Latz.

Latz says people had questions to start with about what the group meant by affordable housing, but once they understood that the homes are intended for people who want to settle in the community, they got behind it.

Ten miles down the shore, in Tofte, carpenters are working on a building with the steep roof and compact shape of the traditional homes in the area. It will be a three-unit apartment building for workers at Bluefin Bay, the resort just across Highway 61.

North Shore Sanitary District
Duluth Township
MN. Pollution Control Agency Bluefin Bay
Bluefin Bay already owns houses where seasonal workers live, but co-owner Dennis Risdahl says he also needs places where permanent employees can move in while they get to know the area and save money to buy.

"Right now, people rent an older house with five or six people sharing it. It doesn't work for families, it doesn't work for couples, it doesn't work for people who are beyond the point in life where dorm or frat house housing is comfortable for them," Risdahl says.

Risdahl and other resort owners have talked about the problem for years, and he finally decided it was up to him to do something about it. He's taking advantage of a new state program that provides low-interest loans to help develop housing in rural Minnesota. He plans to add units each year, possibly up to 21.

"It ties up a lot of capital and time," he notes. "It's not a profit-making business; you only get into it because you can't find the quantity and quality of people we need unless you can provide them with housing that works financially and a higher quality that's currently available."

Risdahl says his neighbors understood the need, but worried about how rental units might change the quiet, small-town feel of Tofte. That's why he's building small buildings, surrounded by lots of green space.

At the North Shore Federal Credit Union in Grand Marais, President Mark Summers says solving the housing problem is an important part of economic development for the region. He says in recent years, the shortage of workers has become a crisis for the business community and he's delighted that someone has finally stepped forward to do something about it.

"If you're talking about a grand total of 60-80 units in a metro area, that's a drop in the bucket, but for Cook County that's a lot," says Summers. "There's a good chance we'll see a marked improvement in the problem."

Woodland Foothills in Tofte, and the Bluefin Bay apartments in Lutsen, are relying on cooperative action, and a little help from the government, to help solve the housing problem in Cook County.

Part One: Girding for Development

Stephanie Hemphill covers northeast Minnesota for Minnesota Public Radio. Reach her via e-mail at