Traverse City Record-Eagle

Grand Traverse County

January 7, 2009

New rules promote affordable housing in TC

By MELISSA DOMSIC

TRAVERSE CITY -- New zoning regulations could make it easier for developers to build affordable housing in Traverse City.

City commissioners this week approved new rules to allow increased density and lot coverage for projects with a certain amount of affordable housing units in multi-family residential districts.

The move is one of several recommendations put forth in a city report on affordable housing that was released last spring.

"There have been a few studies over the last few years showing there's a big need for affordable housing for lower and moderate income families in the area," said Sarah Lucas, regional planner for the Northwest Michigan Council of Governments.

Affordable housing costs 30 percent or less of a household's income. It's aimed at households making between 60 and 80 percent or less than the average median income.

A home priced at about $125,000 would be affordable for a family of four making 80 percent of the average median income. But only 37 of the 231 homes on the market in February 2008 cost $125,000 or less, according to a 2008 city report on workforce affordable housing.

Another housing analysis showed the need for 1,236 ownership housing units for under $109,000, but the existing supply at that price was only 405 units, according to a 2008 study.

Developers could add an extra market-rate home for each affordable unit they build, up to twice the density normally allowed in the multi-family residential districts. Those zones are concentrated around Boardman Lake and other patches throughout the city.

"It's something (developers) are willing to look at because they can still get a decent return by building some smaller units," said city Commissioner Jody Bergman. "It's not going to be a huge impact; the city doesn't have any large parcels where this could make a huge impact."

Bergman said she hopes to see affordable places mixed throughout housing developments, rather than one large housing complex.

City regulations should ensure affordable houses and apartments are integrated with market-rate housing, so it'd be difficult to tell the difference, Lucas said. Studies show they shouldn't negatively impact property values.

Bob Sutherland, who owns Cherry Republic stores downtown and in Glen Arbor, supports the allowance of density increases. He hopes to renovate downtown Traverse City's historic Whiting Hotel into a mixture of affordable and market-rate apartments, though zoning changes won't affect that project.

Sutherland also helped develop an owner-occupied neighborhood with some affordable houses in Empire in Leelanau County.

"The more dense you make it, the less the land cost is a factor in determining the cost," he said. "It's a win-win for Traverse City because it does get affordable housing, but the other positives are that density usually means less people need to drive, things are more walkable, and thus there's even an opportunity to become even more affordable because people then don't have to own cars."

What is affordable housing?

Housing is considered affordable when it costs 30 percent or less of a household's income. Traverse City's regulations further define workforce affordable housing as owner-occupied homes for households making 80 percent or less of the average median income, and rental units for those making 60 percent or less of the average median income.

Under these rules, an affordable purchase price for a four-person house would be about $124,750 in 2008 numbers. Maximum rent for a one-person apartment would go for about $650.

Source: Northwest Michigan Council of Governments.

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