Inclusive Housing Initiatives
City Manager's Office
The City is dedicated to pursuing housing opportunities for all, regardless of income. As an identified Goal and Objective, housing needs have been addressed by planning and zoning initiatives that promote greater density, encouraging rental housing and smaller units, by partnering on affordable housing projects with PILOT (Payment in Lieu of Taxes) programs, and identifying City owned properties where affordable housing may be developed.
The City participated with a 6% PILOT for the Ruth Park housing development at 520 Wellington Street with a term of 16 years. The Ruth Park community offers 58 residences comprising one, two, and three-bedroom units tailored for singles, families, and seniors. The units cater to individuals earning within the 30% to 80% range of the area median income, equating to approximately $26,970 to $71,920 annually for a family of four. The rental rates span from $355 to $1,350, ensuring affordability within a spectrum of needs. Moreover, the development accepts Section 8, expanding opportunities for individuals requiring such assistance. The community ethos of Ruth Park extends beyond mere housing. Its design incorporates thoughtfully curated indoor and outdoor common areas, fostering a sense of belonging and interaction among residents. These shared spaces are integral to cultivating a supportive and vibrant community atmosphere. Ruth Park is pursuing LEED Silver certification from the US Green Building Council, highlighting its commitment to environmentally friendly practices.
Ruth Park was completed in December 2023.
A 6% PILOT with a term of 16 years, beginning on 2023 and ending in 2039 was approved for Annika Place for a new residential development located at 947 South Garfield Avenue. The development will consist of the demolition of two existing homes and the construction of a 54,310 square foot, four-story building with 53 residential units targeting singles, families, and seniors. The complex is to be a combination of 1 and 2 bedroom units; 29 one bedroom units and 24 two bedroom units. 34 of the units, or 64% of them, are targeted for residents with an annual income between 70-80% of the area median income. Annika Place broke ground in December 2022.
Annika Place II
A 6% PILOT with a term of 16 years, beginning on 2023 and ending in 2039 was approved for Annika Place II for a new residential development located at 1020 Hastings Street. The development will be a Annika Place II is to be a 56,146 square foot, four story building with fifty-two (52) residential units; 28 one-bedroom units and 24 two bedroom units. Of these, 6 units will be barrier free. Twenty-two (22) or 42% of the units are targeted for residents with an annual income between 70-80% of the area median income.
Permanent Supportive Housing: Woda Cooper Company will work with Goodwill Northern Michigan to provide 19 units for those experiencing homelessness and assist the Top 10% of Continuum of Care's Prioritization List and Households of Chronically Homeless. Woda will work with any Veterans in the area who may meet the above criteria. Goodwill Northern Michigan will be the Lead Agency and will provide case management and supportive services.
Sustainability: Annika Place II will seek LEED Silver certification, include EV charging stations, and is investigating electric heat.
A ^% PILOT arrangement for a term of 30 years, was approved with HomeStretch NonProfit Housing Corporation for a housing development located at 1028 Carver Street. The project consists of the demolition of a single family home, and the construction of one duplex and two fourplex buildings, including ten 100% affordable residential units. All units will be occupied by residents with an annual income not to exceed 80% of the area median income. Rents for the 1- and 2-bedroom units will start at $720 per month and go up to a maximum of $945 per month with a 3% maximum annual increase. The City approved an amendment to the agreement for the extension of the conditional rezoning on this project (originally authorized August 3, 2020) for one year, expiring August 3, 2023.
A resolution for a one-year extension, which extends the date by which construction must commence to March 16, 2023, to the 6% PILOT arrangement for a 45 year term with the Traverse City Housing Commission for the Parkview Senior Apartments to be located at 1223 East Eighth Street with 46 units was adopted. The project will consist of the demolition of the existing building and construction of a new four story building with 46 residential units targeted toward the "elderly" as defined by the Low-Income Housing Tax Credit Standards. All of the units will be for households with income less than 60% of AMI.
A resolution for a one-year extension, which extends the date by which construction must commence to March 16, 2023, related to the PILOT arrangement with the Traverse City Housing Commission for the Riverview Terrace rehabilitation project at 150 Pine Street was adopted. The project will consist of the rehabilitation of the existing building with no change in the building footprint or height. Major improvements include upgrading building systems, windows, elevators, apartment interiors, and common areas.
A 6% PILOT arrangement with a term of 16 years, was approved for Bradley Commons for a new residential development located at 1024, 1026, 1028 & 1040 E Front St. The affordable housing project will provide 53 residential units; 30 one bedroom units and 22 two bedroom units. Of these, 6 units will be barrier free. One bedroom units will range between 653-678 square feet in size. Two bedroom units will range between 780-895 square feet in size. 34 units (64%) are targeted to be occupied by residents with an annual income between 70%-80% of area median income.
125/145 Hall Street
A 10% PILOT arrangement was approved with Innovo TC Hall, LLC for 15 Years to support workforce housing throughout 100% of the residential units of the development. 125/145 Hall Street will be a mixed use building with first floor commercial/retail and 127 apartment units on the upper floors with household earning incomes between 80% to 120% AMI. Leases will be 12 months with sub leasing explicitly prohibited. Additional elements include a parking deck/garage for tenants in the building. Construction of the project is expected to commence during the summer/fall of 2024 with full operation by fall 2026.
155 Garland Street
A 10% PILOT arrangement was approved with Innovo Breakwater Apartments, LLC for 15 Years to support workforce housing throughout a minimum of 80% of the residential units. Delivered in fall 2020, 155 Garland Street is a mixed use building with 24 studio units (450 sf), 35 one-bedroom units (670 sf), 16 two-bedroom units (1,047 sf) and 3 three-bedroom units (2,115 sf). As of January 2023, the apartments are 95% occupied. The 9,805 square feet of ground floor retail is currently 100% leased to three small business tenants with a weighted-average lease term of about 8 years. The PILOT arrangement will offer a minimum of 80% of the 78 units to households earning incomes between 80% and 120% AMI.
East Bay Flats
A 4% PILOT arrangement with a term of 15 years, was approved by the City Commission for East Bay Flats, located at 440 Munson Avenue, from Goodwill Northern Michigan. The project would consist of 67 affordable housing unit, 51 Single Bedroom units, and 16 Efficiency units for permanent supportive housing for those experiencing homelessness and affordable housing for those earning less than 60% of area median income.
The demand for housing in our region remains high, particularly in locations that are convenient and accessible to one’s daily needs. Land use regulations as they relate to permitting housing types, densities, and locations are just one of the many levers influencing the housing needs in the City, and one that the City Commission and Planning Commission have direct influence over.
Exploring Housing Opportunties
The City in partnership with the DDA explored turning City owned surface parking lots into sustainable affordable housing and is currently focusing on Lot O. Qualifications-based proposals were sought from developers. The City evaluated proposals based on maximizing the number of residential units, minimizing the carbon footprint, and creating a community through building design i.e ground floor retail, price point diversity, etc. Special consideration was given to proposals that include a substantial number of rental units that fall within the range of 70% to 120% of the area median income.
Multifamily districts were recently changed to allow a greater intensity of development to occur. Removing the density limits allows for more dwelling units on the land, which typically results in smaller and more affordable units. The purpose of the amendments were to increase housing opportunities in the City by modifying the development regulations for the multiple family dwelling districts, so they will be more likely to be developed into housing to meet our ever growing housing demand.
Eliminating Parking Minimums
An ordinance amendment reduced minimum parking space requirements. Generally, the parking space cap for non-residential uses changed from a maximum of one parking space for every 150 square feet to one parking space for every 250 square feet. Eliminating residential parking minimums for residential lends the oppportunity for a lower cost per unit since the cost of built parking is reduced within a development.
New PILOT Legislation
The City Commission adopted a new PILOT (payment in lieu of taxes) ordinance at their Monday, October 2, 2023 meeting.
In late 2022, the State of Michigan enacted legislation that allows local governments to establish PILOT policies and engage in PILOT agreements with developers involved in the construction or rehabilitation of workforce housing units, without the previous requirement of securing state or federal tax credits.
Previously, local government participation in PILOTs depended on developers obtaining low-income housing tax credits through the Michigan State Housing Development Authority (MSHDA). However, this was a competitive program, and local authorities lacked the discretion to grant a PILOT unless the developer secured MSHDA tax credits.
With the approval of Senate Bill 432 on December 13, 2022, local governments gained the authority to enter into PILOT agreements with developments not seeking state or federal tax credits. This legislative change marks a significant policy shift.
City Attorney, Lauren Trible-Laucht, President of the Michigan Association of Municipal Attorneys, worked with other attorneys, MSHDA, and the State of Michigan to create the necessary policies and a model ordinance that municipalities statewide can use for implementation.
This legislative modification aims to simplify the approval of PILOT agreements and aligns with the City Commission's objectives concerning affordable housing. It provides a more flexible approach that can contribute to the advancement of affordable housing initiatives within the community.
Proposed Zoning amendments will be considered for adoption at the October 16, 2023 meeting.