Northwest Michigan Regional Prosperity Initiative Creating Housing Choices

Northwest Michigan Regional Prosperity Initiative Creating Housing Choices in Leelanau County

Population Change by Age, 20002010 % Change in Population by Age Cohort, 2000 -2010 51% 49% 48% 29% 17% 22% 5% -2% -9% -2% -13% -7% U 5 - nd er 5 ye ar s 9 10 yea -1 rs 4 ye ar s 15 -1 9 20 -2 4 25 -3 4 35 -4 4 45 -5 4 55 -5 9 60 -6 4 65 -7 4 85 75 an -84 d ol de r -23%

As population ages, #s of families and households with children decline Northwest Michigan -9% -3% Wexford -11% Missuakee -15% Manistee -16% Leelanau -10% Kalkaska Grand -3%Traverse -6% Emmet -14% Charlevoix -5% -12% Benzie Antrim

Housing Needs �Affordable housing �Safe, adequate, quality homes �Homes for small households & seniors �Rentals �Location-efficient homes �Combined housing + transportation costs = 57% + of a typical household’s income �Energy-efficient homes �Propane costs 3 -4 times higher than costs of

Target Market Analyses � Studies the potential market demand from households “on the move” for multi-family units �Attached homes = townhomes, apartments, lofts, etc. �Households = those that live in the County now, as well as those that might move to attached housing in urban settings if there were the right mix of housing options � Young professionals, low income households, young families, retirees, high-income empty nesters/retirees

Barriers: Policy �Zoning affects the cost and availability of land, can discourage – or encourage: �Diverse housing choices �Affordable housing �Location-efficient housing �Sometimes creates uncertainty or delays for developers – time is money

Barrier: Public Perception �Stereotypes about affordable housing create public and government opposition �Creates difficulties in adopting policies needed to accommodate projects �Can create uncertainty for developers �Can derail projects

Barrier: Financing �Funding/capacity is limited for rural housing programs & development �Nonprofit development capacity is limited; demand is rising �Land development costs prohibit both nonprofit and private developers from building affordable housing �Strong market for seasonal and high-end homes removes incentives for building affordable housing

What kind of housing choices do we want? �Small housing �Attached housing �Affordable housing �High quality, consistent with neighborhood character �Integrated into neighborhoods and marketrate developments

What do funders want to see? � Community leadership and support � Public-private-nonprofit partnerships � Mixed income developments � Mixed use developments � Housing in urban or village areas �Access to infrastructure �Walkable to employment, services, schools �Multi-family/attached units

Strategies & Solutions �Increase public awareness �Adopt supportive policies �Provide financing alternatives �Engage all stakeholders in partnerships to leverage resources

Public Awareness �Be proactive in addressing community concerns �Town hall meetings �What are concerns? Property values, neighborhood character? �What is affordable housing? What does it look like? Who is it for? �Presentations to village councils/township boards �Community design charettes – bring the public into the process

Zoning: Accessory Dwelling Units �Granny flats/mother-in- law apartments �Small, often more affordable rentals in existing neighborhoods �Suttons Bay, Empire, Frankfort allow ADUs �Ordinances don’t often result in a large number of units

Zoning: Flexibility �Density sometimes limited by site constraints, setbacks, road frontage requirements, etc. �Build in flexibility or offer as an incentive for including affordable housing choices

Zoning: Diverse Housing Types �Zoning ordinances often: �Only allow multi-family housing in small pockets of the community �Require a minimum home size, precluding small homes that might be more suitable for seniors or other small households �Consider duplexes, four- plexes, etc in more residential districts �Eliminate or reduce

Zoning: Density �Smaller lot sizes = lower land costs �Consider higher densities in villages/urban areas with infrastructure access close to employment, schools, services, shopping, recreation �Cottage housing: �Small single-family detached units around a common area �Shared parking �Located in and compatible with traditional residential neighborhoods

Zoning: Inclusionary/Incentive Zoning �Density, dimensional flexibility or other bonus offered in exchange for including affordable housing in a development �Some ordinances require affordable housing �Many offer “in lieu of” fees: developers pay a specified amount into a housing trust fund rather than develop housing themselves �Pro: builds trust fund �Con: doesn’t serve goal of integrating affordable housing and puts development burden back on municipality/nonprofit; may be contested by development community �Traverse City density bonus: 50% added density in multifamily districts when affordable housing is

Zoning: PUDs �Include affordable housing as a standard for approval in planned unit developments �Leelanau Township PUD ordinance

Zoning: Form-Based Codes �Eliminates some uncertainty for developers �Ensures new development meets design priorities established by the community

Land Bank Authority � County entity designed to manage taxforeclosed properties � Has tools to manage land/property � Can bring tax increment financing (TIF) or other financing tools to projects �Often works in conjunction with brownfield redevelopment authority tools �Can reduce development costs by helping to finance site prep, infrastructure

Financing: Housing Trust Funds �Dedicated source of public funding for local housing needs �Grand Traverse County Housing Trust Fund �Land Bank Authority oversight �Proceeds from the sale of tax foreclosed properties are deposited into housing trust fund �Process is more flexible and timely than state or national funding sources

Financing: Grants & Tax Credits �MSHDA HOME program �Often used for affordable housing development �Open application window �Nonprofits and local units of government eligible to apply �Projects meeting TMA recommendations are prioritized �Subsidies of around $35 -40, 000 per unit + developer fee �Downtown Rental Rehab �Low Income Housing Tax Credits �Most affordable housing is developed through LIHTC �Complex process requires developer experience

Public-Private-Nonprofit Partnerships �Developers constrained by costs of land construction; often not familiar with affordable housing eligibility or other requirements �Nonprofits lack up-front financial capacity to secure land �Governments aren’t builders BUT… Everyone has something to bring to the table: �Developers have know-how and financing �Nonprofits can bring eligibility for grants �Governments can provide land, policy support, incentives to lower development costs

How can partnerships work? Example 1: Turnkey Approach �Developer builds multiple units �Nonprofit agrees to purchase agreed-upon number of units for sale as affordable units to incomeeligible households �Nonprofit applies for/receives grant subsidy and loan for home purchases

How can partnerships work? Example 2: Low-income housing tax credits �LIHTC scoring criteria gives preference to: �Projects that include a nonprofit partner �Developers that have experience with LIHTC program �Projects with community support or participation (i. e. PILOT) �Developer and nonprofit partner for added points �Community provides PILOT or other support

How can partnerships work? Example 3: Development-ready sites � Community identifies property for affordable housing development �Maybe owned or purchased by community; can be managed through tools such as LBA � Community undergoes public process to identify desired development types/design �Ensures all zoning is in place �Identifies possible incentives (i. e. donation of land, brownfield tax credits for site prep or infrastructure, etc) � Community issues RFP/RFQ to engage developer � Developer goes though charette process � Nonprofit may participate to attract grant subsidy or participate via turnkey approach

Implementation Requires Community Leadership �A Framework for Housing Choices in Northwest Michigan: �Identifies potential local roles in and actions for various issue areas �Informational resources for decisionmaking and policy development �Target market analyses �Housing inventories �Shares best practices and resources

Questions & Comments www. networksnorthwest. org/rpi sarahlucas@networksnorthwest. org 231 -929 -5034