In case you haven’t already heard, Northern Michigan is in desperate need of more housing, specifically housing that is priced to be more affordable. A recent Housing North study found that the 10-county region in Northwest Lower Michigan could use at least 3,000 new homes annually through 2025 to keep up with demand, but the area is only adding around 1,000 homes each year.
Traverse City, being hyper-desirable, is naturally feeling its share of the housing pinch. The cost to rent or own has become untenable for a good portion of the population, and some are considering leaving the area because of the lack of housing options. For perspective, a two-bedroom apartment in Traverse City may end up costing around $1,300 per month, and a typical home downtown will likely set you back $300,000.
Part of the housing solution might come from an innovative plan the city commission is contemplating: building affordable housing downtown on land that’s currently used as a parking lot. This in-fill solution is driven in part by the fact that Traverse City is hemmed in by two aquamarine bays to the north and is squeezed into a relatively small boundary of 8.66 square miles. To be home to more people, the city knows it needs to get creative, essentially filling in the gaps and growing up, since it can’t grow out.
The city is not alone in its struggle. The number of homes available for sale has been falling nationwide for more than a decade following the Great Recession of 2008, but we’re now facing record shortages, in part due to COVID-19 factors. At the end of January 2021, there were only 1.04 million homes available in the United States, a 26% decline from the year prior.
An already strong seller’s market before the pandemic has made purchasing a home even more difficult today. With interest rates and inventory at a all-time lows, prices are at an all-time high, and there’s also a shortage of available rental properties.
Miriam Owsley, a former Groundwork employee, has had her share of housing headaches. (Owsley’s roller coaster of a home-hunt was recently documented in the TC Ticker.) Miriam told me that when she and her partner were unexpectedly faced with needing to find a new home in just over a month, panic set in. Ironically, the day she found out that their lease wasn’t being renewed, she had sat in a meeting about the region’s housing affordability crisis, so she knew full well that finding a place on short notice was going to be tough. They quickly realized that every apartment that would work for them had a waitlist and additional application fees.
With limited time, they widened their search, called and emailed friends and coworkers looking for a place they could afford and that would accept their nine-pound Yorkie-Terrier rescue, Maggie. Terrifyingly last-minute, they found a fellow Rotarian who offered to lease out his home to them. They’re now breathing much easier. Owsley said that the experience gave her even greater empathy for those who are experiencing truly chronic housing issues. “You need food. You need rest. You need shelter,” she said. Without those things, you’re living a life that is the definition of unstable.
Removing any amount of parking and replacing it with housing, as TC is contemplating, is bound to ruffle some feathers, but city planners have long wanted to limit downtown parking. The city recognizes that if parking is reduced, the space can be re-deployed for higher value assets like retail, or in this case, housing.
The idea of converting a parking lot to affordable housing was first hatched in 2020, but with the uncertainty in the early days of the pandemic, the proposal was tabled until recently. As the rhythm of life started to return and housing became even more sparse, City Commissioner Tim Werner brought up the idea again. He suggested that the city should produce a Request for Proposal (RFP), soliciting ideas from developers for housing that could be created on specified city-owned parking lots.
The RFP, developed by Rob Bacigalupi of Mission North, encourages developers to use their imaginations and bring bold concepts to the table, while also encouraging successful New Urbanist principles. For example, buildings should have a mix of uses—retail on the first floor and housing above. Proposals should also incorporate sustainable energy approaches (like fully electric heating, cooling, and appliances to take advantage of future clean power sources), smart management of stormwater, bicycle parking, and bonus points for a design that fosters a sense of community among the residents. All elements that Groundwork is very much on-board with.
Traverse City commissioners are making it clear that the units need to be affordable. The RFP notes that “special consideration will be given to proposals that include a substantial number of rental units that fall within the range of 70% to 120% of Area Median Income (AMI) for Grand Traverse County.” So, an individual or family making between $44,502 and $76,288 per year would find the rent affordable.
While there is certainly a need for housing below 70% AMI, the proposed housing would be more affordable than other rents in the heart of downtown and could help someone working in the service industry, someone on a set retirement income, or a recent graduate starting their first job. But the reduced rate won’t work for everyone. For example, TCAPS is looking for an Elementary Education Teacher with at least a bachelor’s degree. The salary range starts at $37,342 per school year—a reminder that more housing solutions will be needed.
Bottom line, the region is growing. We need more housing and we need it to be more affordable so that people can thrive, not just get by. People want to be here and they want to live downtown because it offers so many financial and social benefits. Converting a parking lot into affordable housing will help people find homes and it will add to the economic vitality of the region.
Carolyn Ulstad is Groundwork’s Transportation Program Manager.