Duluth's recreational trails are helping city remake its image

DULUTH – The leafy recreational trails that wind through this Lake Superior city have always been considered an appealing amenity. But now, years after civic leaders started building more and framing the city's identity around them, they are so desired that they are becoming selling points in real estate listings:

"Hiking, Biking and Kayaking right outside your front door," reads one sales blurb for a home on the city's far western end.

"Bring all your toys to enjoy the Lake Superior Hiking Trail and the Snowmobile/ATV trails literally 400' from back door!" boasts another across town.

It has reached the point that, in some outdoorsy social circles here, when somebody buys a home the question is not "what neighborhood is it in?" but "where on the trail is it?"

It is a sign that Duluth's efforts to rebrand itself as an outdoors haven are coming to fruition, pleasing leaders who staked the city's future — and millions of dollars of public money — on changing the narrative of this once-stagnant industrial town.

"It's extremely gratifying to see that our theory of change is proving true, and that it's not only the positive economic impact, but that sense of pride and identity that Duluthians are adopting," said former Mayor Don Ness, one of several leaders who promoted the city's recreation investment and rebranding. He now often hears residents describe their homes by the experiences they have right outside their doors, not by the number of bedrooms and baths, he said. "I hear it all the time and I just love it."

The added value of the city's more than 300 miles of trails is difficult to measure; many factors go into a real estate prices, including a booming market. But real estate agents and others say they are seeing tangible effects.

Seeking access

When Waylon Munch first looked at the house he ended up buying a couple of summers ago, he spent more time looking around outside than inside, he recalled recently from his wooded backyard.

"I bet we were here for a half-hour and I bet 25 minutes of those were outside," said Munch, a 30-year-old civil engineer who once served on the board of a local mountain biking club. He carefully checked out all the trails in the woods right behind the place.

The house itself? "I walked around the inside and verified that it stood up," he said with a smile.

Within hours, he offered 15% above asking price and beat out three other offers.

Now, when Munch gets home from work every evening, he can choose an outdoor activity near his back door: Just 100 paces away is the Duluth Traverse mountain bike trail, a $3.5 million single-track system now snaking 91 miles through the city. It's just a three-minute jog to the Superior Hiking Trail, which winds all the way to Canada. Even closer is the Duluth, Winnipeg and Pacific Railway corridor, now informally used as a trail, too.

In the winter, it's a 10-minute walk to the chair lift at Spirit Mountain ski hill as well as cross-country ski trails there.

"It's been really amazing having everything that close," Munch said. "There's enough variety within there. … if I went out seven days in a row, I would not do the same thing seven times."

While trail access was a top priority for Munch, it is higher on the list for many more home buyers than it once was, real estate agents say. And it is bringing them to neighborhoods that many home buyers used to overlook.

"It may be drawing people to certain parts of town where they may not have been drawn before," Realtor Brenna Fahlin said. "And it's a lot of younger people."

The word "trail" has steadily increased in property descriptions of sold properties, according to Multiple Listing Service data from Lake Superior Area Realtors. In 2006, the word appeared in just 2.9% of sold listings, but by last year it jumped to 12.5%. Already this year, 15.4% of the sold listings contain that term.

Although home values have risen across the city in a hot housing market, longtime Realtor Casey Carbert said she believes larger increases have come in properties near new trails as well as existing trails, though with so many variables that trend is hard to quantify.

"Since our last peak market, this is certainly an amenity that people know to sell," she said. "Even though some of these trails were here in 2005, it didn't have the demand that it has now."

Chris Aepelbacher and Mary Krull, engaged to be married, each have houses near trails on the city's eastern half. For both, trails were among the biggest attractions for where they chose to buy, they said.

Krull used to walk her boxer-mix dog Laila along busy roads near her Hermantown apartment, she said, but now from the bungalow she bought last year she can hike on two trailheads within a couple of blocks of her home or go to Lester Park about a half-mile away.

"It was definitely a priority," she said. "It also helps with resale value. People really value outdoors and parks. I think regardless of when I'm selling it or who wants to buy it, it's going to be a selling point."

Valuing trails

Economists around the country have undertaken in-depth studies to measure the value of trails and other amenities.

In Ogden, Utah, a town of about 100,000 people an hour north of Salt Lake City, values of houses increased by about $2,000 for every minute closer in drive time that they were to a trailhead, Weber State University Assistant Economics Prof. Matt Gnagey found. The study, which he co-authored in late 2017, aimed to put value on trails using real estate as a measurement, he said.

"Housing markets are a really nice point of data that we have that allows us to put a value on something like the trails that we typically don't get to observe people paying money for," Gnagey said. "People value the trails fairly substantially."

At Headwaters Economics, a nonpartisan, nonprofit research organization in Montana that specializes in helping governments decide how to best use public lands, economist Megan Lawson said a review of about a dozen studies found that a price premium on proximity to trails usually ranges from 5 to 10%.

"Trails are good investments as long as they align with the community's priorities," Lawson said. If a city's goal is to increase the health of its elderly population, for instance, then building mountain bike trails would be a mismatch, she said.

Payoffs to a city can come through higher property taxes or increased sales tax from visitors who use the trails and spend money in town.

Duluth, with help from state and federal grants, and community contributions, began concentrating its efforts on building trails around 2010, said Public Administration Director Jim Filby Williams, and it has continued ever since. In just the past five years, roughly $7.5 million has been put toward about 60 miles of new trails, Filby Williams said.

The emphasis on trails came with controversy, though, as some residents complained that the city could have spent more money on fixing its notoriously potholed streets. For the first half of this decade, the annual streets budget hovered around $3 million.

Ness noted that it takes about $2 million to reconstruct just one mile of city street in Duluth.

"That's important," the former mayor said, but he argues the trails' impact on the city's identity, home values and quality of life has made a broad difference throughout Duluth. "I don't think there's any question that this has been just a tremendous investment that is clearly paying dividends."

Pam Louwagie • 612-673-7102