1. Creating Housing Choices in Northwest Michigan Northwest Michigan Regional Prosperity Initiative

2. Population Change by Age, 2000-2010

3. 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 natural gas

4. 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 Conducted for each county in NW Michigan

11. 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

12. 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

13. Barrier: Financing Funding/capacity is limited for rural housing programs & development Nonprofit development capacity is limited; demand is rising Land and 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

15. What kind of housing choices do we want? Small housing Attached housing Affordable housing High quality, consistent with neighborhood character Integrated into neighborhoods and market-rate developments

16. 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

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

18. 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

21. 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

22. 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

23. 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 minimum home size

24. 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

25. 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 included in the development

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

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

28. Land Bank Authority County entity designed to manage tax-foreclosed 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 costs, and land costs

29. 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

30. 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 and/or outside consultant

31. Public-Private-Nonprofit Partnerships Developers constrained by costs of land and 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

32. 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 income-eligible households Nonprofit applies for/receives grant subsidy and loan for home purchases Homebuyers apply for/receive mortgage to purchase home from nonprofit

33. 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

34. 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

35. 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 decision-making and policy development Target market analyses Housing inventories Shares best practices and resources

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