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82 | NORTH
R A C HE L JOHN S ON and the
“P E NC IL- OU T ” F UND WRITTEN BY ALYSSA FORD | PHOTOGRAPHY BY DAN JANDL
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achel Johnson was hearing both sides of it. One Duluth executive told her he was trying to hire a new person to join his company but feared that he was staring down the barrel of a hard “no.” He told Johnson: “I really like this person, and I want to hire her, but I think she’s going to turn us down when she finds out there’s no housing here.” On the other hand, when Johnson reached out to housing developers, they held their hands open wide, as if to say, “what do you want us to do?” One developer even laid bare all his financial reports for Johnson to examine herself. He told her: “I want to build housing. I’m even willing to risk my own financial house to do it. But with the cost of materials, the cost of land, the cost of labor, I just won’t make any money.” It was a no-win vise: a desperate need for housing, pushed up against builders with no incentive to build. Cirrus Aircraft was so desperate for a solution that executives even contemplated buying land and building housing for their employees, just like the company towns of old. On the face of it, Johnson was clearly in no position to help. In September 2022, she had just started her job as President and CEO of APEX, the Duluth-based business development organization. APEX is a lot of things–booster for business and industry, information clearinghouse, networking hub. What APEX definitely is not is a housing organization. But Johnson is a person of extreme grit. She’s a marathon runner, one of those rare people who can dig in for that last morsel of will, even when her head is saying there’s nothing left. In a previous life, Johnson worked for a male-dominated pipeline
company. When her boss invited her to join co-workers on a lavish hunting retreat being planned, not wanting to get left out, Johnson hightailed it to a local gun range to give herself passable marksman skills. Later, when she won the company’s raffle and got her pick of high-dollar prizes, she chose the Benelli, just for the point of it. So even though she had every reason to pass it off as someone else’s bailiwick, Johnson thrust APEX into the North’s most complicated and emotional issue: the unrelenting housing crisis. Just a few months on the job she launched Northland Housing Partners with other business leaders. The goal is to be a catalyst to make it financially justifiable for builders to build or make their balance sheets “pencil out.” So far, Johnson has $11 million in commitments to the fund. Essentia Health is the largest participant so far. Her goal is to add another $40 million to the kitty. The pitch she makes to a business is simple: you can’t recruit workers to northeast Minnesota or northwest Wisconsin if they have nowhere to live. The employer-led fund targets employee housing projects and all types of housing are needed. Companies can join in and expect a return in the neighborhood of 4 to 6 percent, says Johnson. “The truth of the matter is, the market’s not naturally fixing itself,” Johnson says. “We can sit around and complain about interest rates, or how much red tape there is at City Hall, or how thick the rock is around Lake Superior. We can do that. Or we can get busy.” Ultimately, Johnson hopes to show the larger builders in the Twin Cities metro that there’s a “runway” into the North. “If we can show some of the bigger construction firms that they’re going to have 1, 3, 5, 10 years of work up here, that we have a full calendar of shovel-ready projects, then maybe we’ll be able to help solve the extreme labor shortage as well.”
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