TRAVERSE CITY — After learning more about tools that can help provide more housing development in and around Traverse City, city and planning commissioners want to know more.
Commissioners at a joint study session of both boards asked for a chart comparing how programs through the Michigan State Housing Development Authority, different types of Neighborhood Enterprise Zones and two new state laws compare and contrast.
They also wondered if the city should be more proactive in trying these programs, instead of waiting for a developer to ask.
“We are always receiving projects and there are lots of underutilized properties— not lots but there are some remaining,” Planning Commission Vice Chairwoman Anna Dituri said.
Vacant lots, parking lots and “holes in the ground” could be places where the city places Neighborhood Enterprise Zones to spur sustainable growth, Dituri said.
These zones create tax abatements for repurposing obsolete buildings, or in some cases, new construction, said Susan Leithauser-Yee, Housing North’s housing ready program coordinator. Qualifying projects to repurpose or rehabilitate old structures can claim a tax exemption on the improvements for six to 15 years, with property taxes on the land itself staying unchanged.
To create such a zone, a local government designates a district, then a developer seeking the tax abatement must apply before getting construction permits, Leithauser-Yee said. Both the local government and state Department of Treasury must OK the application, and the local assessor’s office needs a system for billing and monitoring compliance.
There are requirements, like the current value of any rehab project must be $120,000 per unit or lower, Leithauser-Yee said. And since Traverse City qualifies under the Obsolete Properties Rehabilitation Act, that rules it out for Workforce Neighborhood Enterprise Zones, which specifically boost housing for people earning up to 120 percent of area median income.
City Attorney Lauren Trible-Laucht also told commissioners about two recent laws, the Affordable Housing Facilities Act and the Attainable Housing Facilities Act. Both were passed in 2022, and the former is for developing four or more dwellings, while the latter is for up to four.
Under both laws, the city commission can pass a resolution designating a district, Trible-Laucht said. The city also must notify the county and get approval from the state Tax Commission. Houses within the district that are being rented by people earning up to 120 percent of area median income get a 50-percent property tax cut for up to 12 years.
Sarah Lucas, director of Michigan’s Office of Rural Prosperity, also gave a primer on how that office supports small towns — including Traverse City — through capacity-building grants to hire planning staff. That can be crucial for very small local governments that have few to no paid staff members.
The department also connects communities with other government agencies and nonprofits, and helps them identify the kind of infrastructure and other projects they need before seeking money to build it. Planning and infrastructure can help spur development of something every community wants more of: housing.
“We talk to communities about what they’re experiencing and what their needs are, and far and away, housing is the No. 1 issue that communities are grappling with,” she said.
Lichtman-Yee, Lucas and Trible-Laucht both spoke after MSHDA Chief Housing Investment Officer Tony Lentych gave an overview of the agency’s various tools for creating housing. And Liz Keegan, Fair Housing Center of West Michigan’s director of education and outreach, talked about the Fair Housing Act and the historic injustices it seeks to correct.
Planning Commissioner Brian McGillivary acknowledged both boards had a lot of information to process after the presentations.
McGillivary suggested the city could become more proactive in finding developers interested in working through the various programs, some of which can be layered. The former city commissioner said he saw how often a housing project tried and failed to take part in some highly competitive state programs, but other programs might be more feasible.
“It’s really a question of figuring out how not just us, but also surrounding communities can actually target and recruit and maybe advance some of these,” he said.
Jackie Anderson, who serves on both boards, said she backs looking into more regional collaboration. City commissioner Heather Shaw said she favors beginning with the Attainable and Affordable Housing Facilities acts since both aim to keep current residents in their homes.
Commissioners debated how to move forward, and their questions included how tax abatements would impact city budgets, whether a Neighborhood Enterprise Zone for housing with no guarantees of affordability gives too much away to the developer.
They also briefly discussed one attendant fact: After the November election, the city commission could look very different. Mayor Amy Shamroe, who faces city Commissioner Tim Werner as a challenger for the seat, said the next lineup could have different ideas for where to site the various districts.
City Planner Shawn Winter said the questions raised are a good starting point, and that city staff can gather more information on the programs.
“I think there are opportunities for both bodies to play a role in this,” Winter said. “After all, the planning commission is the body tasked by the state to examine land-use issues and make recommendations.”