Case for support 2

Creating Housing Pathways & Partnerships in NW Michigan

HOUSING TERMS

AFFORDABLE HOUSING ATTAINABLE HOUSING LOW-INCOME HOUSING

Housing that costs 30% or less of a household’s budget.

Homes that are deemed “affordable” to a group of people within a specified income range. Often, this term is used interchangeably with “workforce housing.”

Rental or for-sale housing that’s made affordable, through subsidies, to low- and moderate-income households. Deed restrictions or other controls limit the resale price or rent for a specified number of years. Affordability may be guaranteed for periods of time ranging from 10 years to perpetuity.

MARKET RATE HOUSING SUPPORTIVE HOUSING

Housing that is sold at full market value.

A combination of housing and services that cost-effectively helps people live more stable, productive lives, especially those facing complex challenges such as homelessness or very low incomes, and/or serious, persistent issues like substance abuse or addiction, mental illness, disability, dementia, and HIV/ AIDS.

WORKFORCE HOUSING

Housing that’s affordable to parts of the workforce earning low, moderate, and entry- level incomes such as teachers, police officers, medical technicians, construction workers, office workers, and retail and restaurant staff. Workforce housing may include both rentals and homeownership opportunities, and is generally located near employment centers. It may be either subsidized or unsubsidized.

THE MISSING MIDDLE

Each year, thousands of driven, talented people dream of making lives for themselves in northwest Michigan–and even more people dream of staying here, putting down roots where they were raised. They are called by the unparalleled natural beauty, exceptional schools, and the incredible arts and culture. They want to put their creativity, their passions, and their hard work into building a life that will benefit both their families and their communities.

And, each year, the severe attainable housing shortage in our region deprives these same hard-working people of the opportunity to live, raise a family, or build their careers here. They eventually find jobs, or build their businesses, elsewhere because of one unavoidable fact:

There is nowhere for them to call home.

REAL ESTATE PRICES HAVE

OVER THE PAST 10 YEARS 2X AS MUCH AS WAGES

UNDERSTANDING THE PROBLEM

Christie Minervini raised her daughter in Traverse City and engages with her community in a variety of ways: involved civic leader, opinion writer, and business owner. She has experienced the attainable housing crisis as a parent and employer, and she understands the complexity of the issue; the things we all love about our region, the aspects that make it so desirable, are also contributing to challenges. “A lot has happened since 2010...it’s just a cooler place. Entertainment, dining, investments in parks and infrastructure; it’s a place people aspire to be. But as an employer, drawing and keeping talent has been challenging.” Limited housing options have forced her employees to live in surrounding communities. “I’ve been bringing in managers from Benzonia and Elk Rapids, and then winter comes and they no longer want to commute. I’ve always paid well above my competitors, but I’m still having a hard time getting people to respond to my ads. Many people think that simply increasing wages will fix things, but that alone won’t do it.”

“I’d love for my 22-year-old daughter to have the opportunity to come home and start a family. She recently graduated from college and could not find a roommate, rental or any way to make it work. There wasn’t anything she could afford under a 1⁄2 hour commute. Even with a college degree, she didn’t have the credit history, which made it difficult.”

– Christie Minervini, community leader, former Traverse City city commissioner, and owner, Santuary Handcrafted Goods

Through her family’s redevelopment company, Christie has been involved in the nationally-significant historic preservation and revitalization project at the former Traverse City State Hospital, known as the Grand Traverse Commons.

“There are two affordable housing projects at the Commons, and we initially experienced a lot of pushback from other owners who thought it might hurt their

investments. When in fact, mixed socio-economic housing opportunities create thriving communities. You need a mix to have a high quality of life. I have more concerns about ghost blocks or ghost houses (when a homeowner is there for a short period of time, then leaves property vacant the rest of the year).”

When asked what solutions she hopes to see enacted in our region, Christie suggests, “I would love to see land banks, payment in lieu of tax, taking city-owned property and working with developers to put affordable housing on these lots. The city could partner by donating the lot, or deeply discounting the lot, or placing a deed-restriction on it. There are many leaders who think affordable housing should be self-sustaining, but it’s not possible, it's not sustainable. We have to offer incentives."

A STORY ALL TOO COMMON

As a Benzie County business owner and active community volunteer sees the effects of our region’s attainable housing crisis every day. But, for Trina, the problem isn’t only a public one. For her, it’s also very personal. Like many parents, Trina felt blessed to have her son and daughter-in-law living locally, and when they announced there was a new baby on

there was even more cause for celebration. It soon became clear Trina’s family was going to need a larger home to accommodate their growing household, but, despite an exhaustive search, they were unable to find an affordable place to rent in the region. When her daughter-in-law’s job announced a transfer position was available in Lansing, they felt they had no choice but to take it. The Lansing area had an affordable housing inventory that allowed them to choose an appropriately sized home for their growing family. Despite their strong desire to stay in the area, Trina’s family felt forced to relocate.

These dedicated individuals are the MISSING MIDDLE: our hardworking neighbors who earn too much to be eligible for our region’s very limited subsidized housing, but who don’t earn enough to rent - or purchase - a home of their own.

Affordable Housing vs. Attainable Housing

AREA MEDIAN INCOME (AMI) AMI is reset by HUD each year according to inflation and cost of living increases.

The median household income in our 10-county region is $67,570. This means, the people who educate, protect, and enrich our lives —the people who have chosen a life of service—are often the first to be impacted by housing barriers.

•Nurses who car e for us when we’re sick

• Teachers who educate our children

•P olice officers who keep our community safe

•C onstruction tradespeople who make housing solutions possible

•En trepreneurs who are beginning to develop their next great idea

For decades, the attainable housing shortage in northwest Michigan has been recognized as a complex problem with consequences that impact every corner of our communities.

1. L ow-income Housing Tax Credit or LIHTC

2. C ommunity Development Block Grants or CDBG

$437,000

Median new home cost in greater Grand Traverse region

$214,231 Median new home cost throughout state of Michigan

$116,000

Annual income needed to afford home at Grand Traverse region median price.

$67,570 Median household income in Northwest Lower Michigan 2021

THE DANGER OF THE STATUS QUO

The effects of the affordable housing shortage reach far beyond prospective renters and homebuyers. The lack of housing has a ripple effect throughout northwest Michigan, challenging our region’s economic success by hindering local businesses from attracting and retaining talent. Quality housing is an essential ingredient to securing quality employees.

This problem is primarily due to the staggering uptick in short-term housing rentals. Prioritizing vacation rentals over single-family housing and long-term rentals deprives our community of diversity, exchanging flourishing families and engaged community members for week-long vacationers.

Where is this cycle headed? We are already seeing the effects as eager tourists arrive in our region to find the restaurants and shops understaffed, if not closed, due to these often insurmountable staffing challenges. Community business leaders agree that this is not a problem wage increases alone can fix.

“We just hired a key employee that couldn’t find a place for a long, long time. Housing is such a determinant to the quality of staff.”

Bob believes this is not a problem that higher wages alone can solve. Many people struggling to find housing are making well above minimum wage.

“Affordable housing is not just someone trying to make ends meet making $12/hour. No, these are professionals.”

–Bob Sutherland, community leader; nonprofit board director; former L eelanau County commissioner; business owner, Cherry Republic

“Operating cocktail bars/restaurants in three other locations in Michigan, we can say without a doubt that those communities have prioritized the creation of workforce and affordable housing as part of their community development efforts. Knowing that successful and sustainable tourism economies require attainable housing for staff, we hope that Charlevoix continues to consider ways to create new housing for a more stable workforce in the region.”

Long Road Distillers is an award-winning craft spirit distillery that operates tasting rooms and cocktail bars in 3 successful west Michigan locations. In 2020, the company was excited to add a Charlevoix tasting room as their fourth site, making the significant investment required to prepare for a 2021 opening. However, after several months spent struggling to find employees, even including a higher-paying manager position, they began to recognize the insurmountable barrier to their success: housing.

Greatly disappointed, but unable to find a solution to their staffing problem, Long Road Distillers ultimately abandoned their Charlevoix location, leaving the community without the employment opportunities and positive contribution they would have otherwise made to the local economy.

“Being able to employ people is a challenge. [In] my vineyard and winery business, three-quarters of the employees live outside of the County because of the affordability of housing in Leelanau County...it makes it very, very difficult for working families to live here.”

–Larry Mawby, Founder of MAWBY Vineyards and Winery

HOW IT ALL BEGAN

In the 1990s, several organizations whose work touched various aspects of the housing crisis joined forces to create the Housing Solutions Network. Stakeholders such as Habitat for Humanity, Goodwill, Networks Northwest, and Northwest Michigan Community Action Agency hoped this collaboration would address barriers to affordable housing. It soon became very clear: it was going to be difficult—if not impossible—to meet the region’s housing needs without first addressing the communications, policy, and capacity barriers to a functional housing environment—none of which were being addressed by existing organizations.

A new organization was needed. This independent nonprofit would be laserfocused on addressing the systemic problems embedded in zoning laws, development financing, and public-private partnerships—problems that were so pervasive they impacted every aspect of housing work and prevented real progress from being made. If these barriers could be removed, a new and strong foundation could be built, one that would serve as a stabilizing force for a healthier, more sustainable, thriving northwest Michigan.

In 2018, Rotary Charities of Traverse City and the Frey Foundation stepped forward to generously support this bold and critical vision--and Housing North was born.

There are 300,000 people living in our 10-county region. This is a population the size of the cities of Ann Arbor and Grand Rapids, spread across 4,950 square miles. Successfully navigating this service area also means navigating the 139 separate units of government that exist in this region.

HOUSING AND COLLABORATION IS THE SOLUTION

In just a short time, we’ve become leaders in the state-wide movement to create a new housing paradigm that supports the needs of today’s communities and ensures their robust and thriving futures.

Housing North is the only organization in our area whose mission is dedicated entirely to solving regional housing issues.

We work every day to:

• identify and influence local and state policy that directly impacts development opportunities in rural Michigan

• provide outreach, messaging, and communications tools to communities, developers, and other partners to help them advocate for housing solutions in their communities

• help modernize out-of-date zoning to support solutions to today’s housing crisis

• research tax incentives, or relief, to lower the development costs of attainable housing

• equip on-the-ground staff with expertise tailored to the needs of each community in order to facilitate public meetings; form strong public-private partnerships; solicit grant-funding, participate in critical governmental meetings; and manage volunteer task forces of housing advocates/community members

• leverage public/private dollars to support housing projects throughout our 10-county region.

Our mission is simple: to build awareness, influence policy, and expand capacity so communities can create housing solutions that meet their unique needs.

A CROSSROADS FOR OUR COMMUNITIES

Having an affordable, dependable place to call home is a basic need, but it has become a luxury in our region.

Our region’s housing inventory has remained steady, while conversion of that inventory to seasonal housing and short-term rentals has increased at an alarming pace, further limiting housing options for the region’s workforce. Today’s housing market is facing unprecedented high prices, record low inventory, and increasing competition from the seasonal home and vacation rental market. The median home value in Michigan is $214,231. This value is seasonally adjusted and only includes the middle price tier of homes. Michigan home values have gone up 17.4% over the past year. When you look at this same data for Traverse City, for example, the value is closer to $371,000.

This means the average working family needs to earn $116,000/year to afford a modest home of their own. For most of our region’s workforce, this is far out of reach, as the median household income for our 10-county region is $67,570.

This short supply of available housing leaves many families with few choices but to live in deteriorating, inadequate, unsafe, or unaffordable homes. That is, if they stay or move to the region at all.

Because of the enormous gap between the year-round housing available and the average working family’s income, our region’s working families are forced to commute long distances to find a place to call home, often spending more than 50% of their income on housing and transportation.

Despite the documented demand for year-round housing units, private developers have little incentive to provide housing for households with below-average incomes. Responding to demand for high-end and second homes—many of which will become short-term rentals—is more profitable...at least in the short term.

HOMES FOR WORKING PEOPLE

In 2020, a Target Market Analysis housing study revealed that more than 15,000 housing units will be needed across our service area over the next five years to meet existing demand. The most pressing need is for homes priced below $200,000 or rental units costing less than $1,000 per month, an appropriate amount for a household with an income of $40,000 or less.

10,880

RENTAL UNITS NEEDED

4,660 OWNER UNITS NEEDED

Our area simply doesn’t have adequate amounts of the type of housing many people are looking for: smaller homes, apartments, duplexes, and other rental options. Empty nesters, retirees, and young people just starting out would all benefit from these housing options. Unfortunately, funding, current zoning laws, and local politics often limit these types of housing solutions.

These regulations and restrictions served another time, when our area was quite different. We need solutions for today: private-sector solutions that authorize new revenue sources and tax incentives, and public-sector solutions like changes to local zoning and other policies that streamline the process for builders.

We work in a 10-county service area to fundamentally change the systems that have the biggest impact on the health of our housing ecosystem. We don’t measure our success in housing units built, but rather in big-picture systems change that will move the needle on this crisis before it’s too late.

WHAT’S AT STAKE

If our housing systems don’t support dynamic, authentic communities, we all lose. We lose:

• Entrepreneurs who need apartments to launch their small businesses

• Grandparents who want to remain near family, but only need a small townhome at this stage in their lives

• Skilled servers who want to stay in the area to help open the next incredible restaurant, but need walkable condos to rent

• Retirees who prioritize volunteer work and staying active, but want the quality of life that comes from a modest, above-retail apartment, rather than buying and maintaining a house

The long-term consequences of this short-sighted behavior will be felt for generations if we do not act now.

Support our work through these programs and opportunities.

PROJECT

SUPPORT HOUSING READY PROGRAM DEED RESTRICTION PROGRAM ADVOCACY RAPID RESPONSE FUND

provide gap financing and grants to support attainable housing projects. help our communities become Housing Ready by providing on-the-ground expertise to identify and leverage housing partnerships and opportunities. This includes supporting local housing projects and programs.

ensure our vital workforce can remain and grow in our community. This program helps to balance a housing market unbalanced by a growing percentage of housing stock becoming second homes or vacation rentals.

help support our advocacy and communications work. With 139 units of government in our region, we need capacity to reach each of our communities and train advocates to speak on behalf of the housing needs of their communities.

WAYS TO GIVE

GIFTS OF CASH

You can make an outright gift or pledge your support. Contributions are eligible for tax deductions.

GIFTS OF STOCK

Stock can be donated and may qualify for both a federal and state tax deduction. If the stock has appreciated in value, you may avoid paying capital gains upon transferring it to Housing North.

HOUSING NORTH BOARD MEMBERS

CARLIN SMITH, PRESIDENT

Consumers Energy

Emmet County

SHARON ORIEL, VICE PRESIDENT

Leelanau Housing Action Committee

Leelanau County

TONY LENTYCH, TREASURER

Traverse City Housing Commission

Grand Traverse County

JOSH MILLS, SECRETARY

City of Frankfort

Benzie County

JANET KOCH

Cadillac Area Chamber of Commerce/Networks Northwest

GIFTS OF REAL ESTATE

Real estate can be donated to support attainable housing projects . If the property’s value has risen over time, the donation of this appreciated asset may qualify for a state and/or federal tax deduction, as well as reduction in capital gains.

PLANNED GIFTS

You can create a meaningful legacy in northwest Michigan through a planned gift. Planned giving options include bequests, charitable gift annuities, charitable remainder trusts, life insurance policies, retirement plans, or other arrangements.

Wexford County

MARYL KOHL

Elk Rapids Chamber of Commerce

Antrim County

SARAH VAN HORN

Charlevoix Area Chamber of Commerce

Charlevoix County

CRAIG ARDIS

Mayor of Lake City

Missaukee County

CASH COOK

Downtown Development Authority

Kalkaska County

MARC MILLER

Manistee Area Chamber of Commerce

Manistee County