– A task force assembled by Mayor Emily Larson recommends the city create a housing trust fund as the city looks for new ways to address its affordable housing shortage.

Among the suggestions in a report released Monday were the formation of a loan guarantee program and borrowing money to create a housing trust fund.

A study conducted last year estimated Duluth will need an additional 3,800 affordable units — which the task force defines as housing available to a family making $50,000 or less a year — over the next decade. The city is on pace to develop 1,200, and just doubling that number would cost up to $12 million per year.

“As a whole community — it doesn’t matter which price point you’re talking about — we are short housing,” said Lynn Nephew, a commissioner for Duluth’s Housing and Redevelopment Authority who served on the task force. “But the one place we are lacking most is that lower income stock.”

The group, which included representatives from the public and private sectors, has been meeting monthly since September. The mayor and city administration will decide if and how to act on its recommendations, some of which would require City Council approval.

Nephew said of the task force’s six suggestions, she thinks the creation of a housing trust fund is “the most important” as it would create a means of channeling money into projects.

Members proposed the use of general obligation bonds, which would require the city to adjust its current budget or raise levies, or revenue bonds, which would funnel income from a specific project into housing.

The task force also suggested the city institute a loan guarantee program that ensures that lenders won’t lose their investments if a project fails, which in turn lowers cost barriers for developers by allowing them to borrow at lower interest rates.

Additionally, the group recommended the city look for ways to obtain property it can give away for affordable housing projects, similar to its ongoing Rebuild Duluth program. Members also encouraged the city to educate homeowners about ways to add units to their existing properties, a nod to tiny houses.