Two Final Bridge Projects, TART Expansion Planned For Downtown

By Beth Milligan | Nov. 21, 2022

Traverse City Downtown Development Authority (DDA) board members Friday approved contributing funds toward two final bridge projects downtown – the reconstruction of the North Cass Street and South Union Street bridges, both planned for 2023. The DDA board also approved a project agreement for engineering services to move forward on the expansion of the TART Trail in downtown Traverse City. Both projects now head to city commissioners tonight (Monday) for final approval.

Traverse City is nearing the finish line of a multi-year project to rehabilitate or replace multiple aging bridges in the downtown area. The city has already completed work on the Park Street, South Cass Street, East Eighth Street, and West Front Street bridges since 2021. The last two major bridge projects are the rehabilitation of the South Union Street and North Cass Street projects, set to take place next year.

Improvements on both bridges will include replacing the deck and beams, widening sidewalks, installing state crash-tested-and-approved bridge railing, and adding pedestrian railing approaching the bridge. The South Union Street bridge will receive a historic balustrade treatment on the outer edge and down lighting to illuminate the walkway, while the North Cass Street bridge will have improved head clearance under the bridge. The city is aiming to complete the bridges before reconstruction work starts on Grandview Parkway, a project planned for 2024.

While initial cost estimates put the South Union Street bridge at $1.7 million and the North Cass Street bridge at $800,000, the cost for North Cass has since risen to $1.185 million, according to city documents. The Michigan Department of Transportation (MDOT) is covering 90 percent of the project costs through the Local Bridge Program, contributing $2.6 million toward the project. The city is responsible for a 10 percent match – or $291,450 – plus engineering and inspections, estimated at $221,400. The city’s total is therefore just over a half million dollars.

City funds for these two particular bridge projects will come from the DDA through its tax increment financing (TIF) districts. At Friday’s DDA meeting, board members approved increasing downtown’s contribution to cover the added costs, including $381,500 from TIF 97 and $135,000 from the Old Town TIF. “These are the last two bridges that we’re going to have to complete,” said Mayor Richard Lewis, who sits on the DDA board. “I think this is a fair exchange that we can finish these and the projects are done.” Lewis noted the initial cost estimates were several years old, saying it wasn’t surprising they had increased. City commissioners will vote tonight to authorize a contract with MDOT for the project to proceed; MDOT is accepting construction bids through December 2 and will soon choose a contractor to oversee the projects next year.

Also in the downtown area, the city is preparing to hire a firm to oversee engineering and design services to expand and improve the TART Trail between West End Beach and the intersection of Garfield Avenue/Peninsula Drive. Project partners including the city, DDA, and TART Trails are looking to make trail improvements in conjunction with the 2024 Grandview Parkway project to avoid duplicating traffic disruptions and tearing up the same area twice.

conceptual design – created with input from community members and businesses along the corridor – shows the trail more than doubling in width in areas to 16 feet, with 10 feet dedicated to bidirectional bicycle use and six feet dedicated to pedestrian use. The trail alignment could shift in some areas and would also expand down past Delamar, Sunset Park, the Traverse City Senior Center, and NMC’s Great Lakes Campus. A future trail connection could lead down Peninsula Drive, opening up the opportunity for additional connections to NMC, Traverse City Central High School, Eastern Elementary, and the Civic Center.

The city, DDA, and TART Trails have each committed $150,000 toward engineering costs for the trail expansion, for a total project budget of $450,000. DDA board members Friday approved moving ahead with the agreement, while city commissioners will vote tonight to actually award the engineering contract. Two firms responded to a request-for-proposals (RFP) for the contract; Environmental Consulting & Technology and Progressive AE, with the latter having a lower bid of $448,391. Progressive AE is the firm that completed the initial trail expansion conceptual design and has also worked with the city on the Grandview Parkway reconstruction project.

Progressive AE also offered to oversee construction services for the TART Trail expansion for an additional $325,031, but staff recommended holding off on awarding that contract and just proceeding tonight with awarding the firm the engineering and design contract. The intent is to award the construction management contract in the future “assuming construction occurs in 2024,” according to City Planning Director Shawn Winter. Project partners will still need to separately fundraise to pay for the trail reconstruction itself. While an official cost estimate will come after engineering, the expansion is likely to cost in the millions of dollars.

Also at Friday’s DDA meeting…
> Board members officially recognized DDA and city staff for the recent implementation of the pilot project to cover State Street, Pine Street, and Boardman Avenue to two-way traffic, what DDA CEO Jean Derenzy called a “generational” project that took two years of planning to implement. The DDA also approved a three-year contract with Progessive AE for $75,000 – included in the pilot project budget – for data collection services to assess the economic and traffic impacts of the conversion. Derenzy said the DDA is accepting comments on how the pilot is working from the public at two-way@downtowntc.com and can modify the corridors as needed during the experiment. City Commissioner Mitch Treadwell said during public comment that the DDA should consider adding more signage to address “driver confusion” at key intersections. The DDA has also addressed confusion on social media, notably for the intersection of State and Cass: The left eastbound lane of State is now a left-only turn onto Cass Street, while the right lane is for through and right-turn traffic only.

> DDA CEO Jean Derenzy presented a required biannual report to the public giving an overview of DDA funding and projects. She noted that properties in the TIF 97 district now have a total combined taxable value of over $155 million, while properties in the Old Town district have a total combined taxable value of over $68 million – numbers that have increased steadily over the last five years thanks to development growth. Projects that utilized TIF funding in 2022 included the East Front Street repaving, planning for the city’s new mobility plan, planning for a riverfront redesign (see below), and the Moving Downtown Forward project. The last item is designed to identify an organizational and funding structure for the DDA moving forward; Derezny said a final report with recommendations will be presented to DDA board members and city commissioners in December. In 2023, TIF funds will continue to be used for some of those projects in adding to creating a conceptual design for the new civic square, planning for the West Front Street parking deck, and the possible redevelopment of parking Lot G next to Modes.

> Finally, DDA board members unanimously approved a new conceptual design for the Boardman River riverfront and a pedestrian plaza in the 100 and 200 alley blocks of Front Street. The motion directed staff to begin working on a plan for implementing improvements in a phased approach and encouraging the city and other partners to also incorporate the new design into their planning. Lewis noted the redesign is a “long term” plan that could take decades to fully implement, though some improvements could come as soon as the next few years. As a conceptual plan, some elements may be modified or removed as work progresses since the vision is “subject to its collision with reality,” noted board member Pete Kirkwood. Still, board members expressed excitement about the potential for improved placemaking, river health, and economic development under the new design. “We’ve laid the groundwork,” said Chair Gabe Schneider. “We’ve set this plan in motion.”

Status Update on 5 New local Housing & Mixed Use Developments

Timeline Check: Status Updates On Five Local Housing Or Mixed-Use Developments

By Craig Manning | Nov. 14, 2022

Numerous projects are under construction in and around Traverse City to address the area’s mounting housing shortage. From multi-family developments to mixed-use projects to concepts inspired by the area’s (robust) demand for short-term rentals, here’s the latest on five of the bigger housing or housing-adjacent projects underway in the area.

Ridge Flats/Ridge Commons
200 new housing units are coming to LaFranier Road as part of a multifaceted new apartment development. The project, formerly known as South22, comes from the same development group that built the Ridge45 and Trailside45 complexes and includes two different segments, both of which are being built on LaFranier next to the Ridge45 complex.

According to Scott Knowlton, VP and general counsel for project developer Westwinds Construction, the new development will include both a workforce housing component, called Ridge Flats, and a higher-end housing project, called Ridge Commons. Ridge Flats will consist of three 56-unit buildings made up of one or two-bedroom condos. Ridge Commons, meanwhile, is nine quadplex buildings where each unit will have three bedrooms, two bathrooms, and an attached two-stall garage.

Knowlton says Westwinds has “done all of the mass grading” for the 22-acre development, and that “foundations will go in yet this late fall to early spring.” The plan is for a phased buildout, with Ridge Commons likely to “come online within 12 months” and Ridge Flats following more of a 16-18-month timeline.

BATA/TC Housing Commission
Just up the road from the Ridge Flats project is the planned site for the new joint development by Bay Area Transportation Authority (BATA) and the Traverse City Housing Commission (TCHC).

After a lengthy process of approvals and public funding, BATA and TCHC held a small “project kick-off” for the development on October 13, which BATA Director of Communications Eric Lingaur describes as “an opportunity to thank the community organizations and elected officials for supporting this project and making it one step closer to reality.” Per Lingaur, sitework is slated to begin on the 50-plus-acre property at the corner of LaFranier and Hammond Road in the spring, as soon as the ground thaws.

Ultimately, the development will add an 87,000-square-foot BATA headquarters to the site, as well as a 200-unit workforce housing complex from TCHC, dubbed The Flats at Carriage Commons. Other components include 15 single-family Habitat for Humanity homes, a childcare facility, and a food/beverage café space. The first phase of the project, which will include the complete buildout of the BATA facility and a yet-to-be-determined amount of the TCHC project, should finish out in 2024, with the full project slated for completion in 2026. While Lingaur says locals may notice “some minor tree removal and environmental work this fall, depending on the weather and contractor availability,” the official groundbreaking won’t be until spring.

In the meantime, Lingaur says that BATA and TCHC “continue to apply for grants and secure additional funding to help offset the increased project costs to materials and labor caused by inflation.” On that front, TCHC Executive Director Tony Lentych says the organization currently has enough funding to build one of the five buildings called for by project visioning. “But we are hoping to build two in the first phase to take advantage of economies of scale on the site work and infrastructure,” he tells The Ticker. “To that end, we applied to the Michigan State Housing Development Authority in their October round for tax credits for the second building. Traditionally, they’ve notified successful applicants around the first of the year.”

Commongrounds
Almost two years after construction began, the Commongrounds Cooperative development at the intersection of Eighth and Boardman is nearing completion. According to Andrew Lutes, operations and membership director for Commongrounds, the four-story mixed-use development is welcoming its first tenants as we speak, with plans for a rolling move-in schedule as last bits of construction are completed on the building. 

“We’re basically opening in phases,” Lutes says. “The first phase is kicking off right now, and we’re in the process of moving in the residents to the third and fourth floors. Next up is commercial occupancy, which is the ground floor and the second floor. We’re aiming to have our occupancy certificate [for those floors] toward the end of November, and then each of those tenant businesses will be standing up on their own timeline, with their own individual buildouts through the holidays.”

Tenant-owners with spaces on the first or second floors include Higher Grounds Coffee, Crosshatch Center for Art & Ecology, Nobo Mrkt, Northern Blooms Montessori, Commonplace, and Groundwork Center for Resilient Communities. Also on the second floor is the Alluvion, a new performing arts venue previously covered by The Ticker. While Lutes says all those tenants will have their own timelines for moving in, he’s hopeful everyone will be in and settled by the end of January. “That last weekend is when we’re going have a grand opening celebration, with events not only for our cooperative members but also for the public.”

Eastside One
Eastside One is a condominium development under construction at 1825 E Eighth Street, near the Eighth/Munson intersection. The four-story building will include 50 one or two-bedroom units, as well as a rooftop lounge with four community hot tubs.

Sam Flamont and his team at Mitten Real Estate Group, brokered by eXp Realty, are behind the project, which Flamont estimates will be completed “by the end of February 2023.” 27 of the 50 units are currently under contract, and Flamont expects the remaining 23 to go quickly as the building continues to come into sharper focus.

“Once drywall is up and people can see the floor plans better, I expect sales to pick up,” he says. “And once the rooftop gets closer and people can see the layout up there, that will also help. The amenities of the building will sell it.”

KOTI
The KOTI development in Acme Township has shapeshifted multiple times since local restauranteur and businessman Dan Kelly first shared with The Ticker his vision of building a resort village of single-unit tiny houses near his Catering by Kelly’s headquarters on M-72. That news broke in December 2017, when the plan was to kick off construction on the project in 2019. At the time, Kelly wanted to create a “two-fold deal” for buyers, where they could “own a condo as an individual home” if they so wished, but also put it into a short-term rental pool to be managed by Kelly and his team.

The pandemic delayed KOTI significantly, but construction has been underway on the proejct since June 2021, and Kelly says the first 20 buildings are now nearly done. Those 20 structures, which include an administrative office and the first batch of housing units, account for “75 percent of phase one,” which will ultimately include 32 structures. The remaining 12 tiny houses will built at a later date.

The project also includes a network of roads, sidewalks, and trails to create a full neighborhood feel, as well as a nearby restaurant in the former Stained Glass Cabinet Company building, which is currently under renovation. Kelly expects those facets of the project to be completed next spring as well.

Right now, Kelly is focused on getting KOTI up and running in time for the summer 2023 tourism season. That’s due in part to the fact that the project plan has changed. Now, instead of selling the units to individual buyers or investors and then having a rental pool option, Kelly and his team will simply be managing all the units in-house as short-term rentals. KOTI is already taking rental renovations for next summer via its website.

As for future development, Kelly anticipates finishing phase one and then deciding later what phase two will look like. “Phase two is going to be more of the residential housing units, but we don’t have those planned out yet,” he says.” We’re approved for 76 of them, but we’re not we’re not going to build 76. I’d guess we’ll probably build another 20 or 30.”

Eleven Takeaways From the 2022 Profile of Home Buyers and Sellers

Picking up the 2022 Profile of Home Buyers and Sellers can be a daunting task. There are 142 pages of content, and many charts span the 41-year history of the data set. This post helps you wade through some of the more striking changes. Here are a couple of things to note as you dive in:

The data collection period of this report is from July 1, 2021, to June 30, 2022. Over that period, the housing market has shifted from a low-interest rate, low-inventory environment with bidding wars and frenzied activity to a higher interest rate but still low inventory environment.

This report is only among primary residence buyers and does not include investors or vacation buyers. OK, let’s dive in!

1. First-time buyers drop to an all-time low of 26% from 34% just a year ago.

There is no question that housing affordability has shut out first-time buyers with the rise in interest rates and home prices. During the data collection period, buyers also saw the lowest inventory in the U.S. since 1999—a picture that impacted first-time buyers more than any other group as investors jumped in. Potential first-time buyers also face a rise in rental costs making it challenging to save for a down payment.

Line graph: First-time Buyer Share Among Primary Residence Buyers, 1981 to 2022

2. The age of first-time and repeat buyers hit all-time highs.

The age of first-time buyers jumped to 36 from 33 years, where it had been for three years. Provided the headwinds first-time buyers faced, this may not be a surprise. Twenty-six percent of first-time buyers reported “difficulty saving for a down payment” was a challenging task in the buying process and cited higher rental costs, car loans, credit card debt, and student debt as factors holding them back. For repeat buyers, the age has risen to 59 years, up from 56 years in last year’s report. Americans feel confident taking on a mortgage later in life and purchasing a primary residence. Trades have happened later as tenure in the home has also increased.

Line graph: Median Age of Home Buyers, 1981 to 2022

3. The share of White and Hispanic/Latino buyers grew, while Black/African American and Asian/Pacific Islander buyers retreated.

From research produced throughout 2022 by NAR Research, Black/African American renters are paying a disproportionate amount to rental costs. As these rents rise, it is further holding back Black buyers, who are also more likely than others to be first-time buyers. White buyers are most likely to be repeat buyers and to have housing equity to assist them with the down payment of their next property.

Line graph: Race/Ethnicity of Home Buyers, 1997 to 2022

4. Small towns and rural areas saw a migration flow while there was a retraction of buying in urban areas and the suburbs.

Buyers choose their neighborhood based on many factors, but the top of the list was the quality of the neighborhood, affordability, and proximity to friends and family. Small towns and rural areas proved to be the winning dynamic for many when making that choice—affordability was key, and family support systems were just down the street.

Stacked bar graph: Location of Home Purchased, 2003 to 2022

5. How far a buyer moved jumped to an all-time high of 50 miles from a range that had been steady between 10 to 15 miles.

Buyers’ migration to small towns and rural areas was undoubtedly at play. Another factor is remote and hybrid work settings. In January 2021, many headlines touted that CEOs provided employees with permanent remote work. This allowed buyers to separate themselves from city centers or inner suburbs and migrate to farther areas. Zoom towns were the boom towns in the last year.

Line graph: Distance Between Home Purchased and Previous Residence, 1989 to 2022

6. The share of all-cash repeat buyers jumped from 17% to 27% in the past year.

Homeowners have accumulated tremendous housing equity in the last decade and hold about $210,000. This has allowed many to avoid holding a property mortgage and pay all cash for their purchase. As the location to purchase in small towns and rural areas became more popular in the last year, this may have further allowed buyers to move from expensive areas to more affordable ones. The share of first-time buyers who paid all cash remained essentially unchanged at 3%.

Line graph: Buyers Who Financed Their Home Purchase, 2002 to 2022

7. Tenure in home, before selling, returned to an all-time high of 10 years.

After a pandemic-driven drop last year to eight years in the home, tenure has risen to an all-time high. Between 1987 and 2008, the typical tenure was just six to seven years before someone made a trade. The top reasons sellers made the change in the last year were to be closer to friends and family, moving due to retirement, and their neighborhood had become less desirable. In past years, moving had been more common due to a change in a family situation or a job relocation.

Line graph: Median Seller Tenure in Home, 1987 to 2022

8. Expected tenure for first-time buyers hits an all-time high of 18 years, up from seven years in 2007.

If a first-time buyer was able to enter the homeownership ladder in the last year, they would have less intention of moving from their home quickly. The expected tenure of first-time buyers even surpasses that of repeat buyers of 15 years. Buyers have locked-in rates in a rising rate environment, which likely plays a key factor. For others, the ability to purchase a home in a less urban area may mean just skipping the starter home altogether. One note is that expected tenure is always longer than actual tenure, as buyers have just finished the tremendous hurdle of finding a home and purchasing.

Line graph: Median Expected Buyer Tenure in Home, 2007 to 2022

9. Buyers are diversifying where they pull together the down payment for a home.

Given the rise in home prices, buyers are pulling together funds from multiple sources for their down payment. First-time buyers rely on savings as the primary source, but 22% (down from 28% last year) did use a gift or loan from friends/family, and 15% either sold stocks/bonds or took a loan from their 401k/retirement fund. New this year, 2% of first-time buyers sold cryptocurrency to help with the down payment. While half of repeat buyers used proceeds from the sale of their past home, this does not work for all. Forty-one percent used savings, and 11% even sold stock or took a retirement loan.

Bar graph: Downpayment Sources for Recent Buyers

10. First-time buyers moving directly from a family member’s home into homeownership is at an all-time high.

Twenty-seven percent of first-time buyers had this prior living arrangement, up from 21% the past year. These buyers were able to skip rental increases by moving into a home. This allowed first-time buyers to pay down debt, work on their credit scores and save for a downpayment the way others may not have been able to. The share of first-time buyers who rented before buying dropped to 64% from 73%.

Stacked bar graph: Prior Living Arrangement of First-time Home Buyers

11. Buyers and sellers use and want the help and expertise of a real estate agent.

Eighty-eight percent of buyers used a real estate agent to purchase their home. Buyers are most satisfied with their agent’s honesty and integrity, and knowledge of the purchase process. For sellers, 86% used an agent to help sell their home. Sixty-three percent of sellers used an agent that they had worked with before or that was referred to them. Sellers most wanted their agent to price the home competitively, help market the home to potential buyers, and sell within a specific time frame.

Line graph: Purchased Home Through an Agent or Broker, 1981 to 2022
Line graph: How Seller Sold Home, 1981 to 2022

Mortgage Rates Slip After Fed Hike, But What’s Next?

Mortgage rates this week dipped slightly below 7%, even after the Federal Reserve aggressively raised its benchmark interest rate again to tame inflation. The 30-year fixed-rate mortgage averaged 6.95% this week after hitting a 20-year high of 7.08% last week, Freddie Mac reports.

“Even with the Federal Reserve raising its short-term fed funds rate by another large amount, longer-term interest rates look to move only slightly,” says Lawrence Yun, chief economist for the National Association of REALTORS®. “The mortgage market has already priced in the latest Fed move.”

On Wednesday, the Fed approved its fourth consecutive rate hike of three-quarters of a percentage point to help bring down 40-year high inflation. The central bank’s lending rate now falls within the target range of 3.75% to 4%—its highest since January 2008. “The inflation picture has become more and more challenging over the course of this year,” Fed Chairman Jerome Powell said at a news conference Wednesday. “That means we have to have policy be more restrictive, and that narrows the path to a soft landing.”

What Happens Next?

Mortgage rates will start to “drift lower” once inflation has been contained—but that could be another year or two, Yun notes. However, the slight dip this week in rates likely will offer little relief to priced-out buyers. “Unsure buyers navigating an unpredictable landscape keeps demand declining while other potential buyers remain sidelined from an affordability standpoint,” says Sam Khater, Freddie Mac’s chief economist.

Mortgage rates likely will be volatile in the coming weeks, adds Lisa Sturtevant, chief economist for Bright MLS. “Home buyers expecting mortgage rates to fall significantly will be disappointed,” she says. “The question is: Will rates stabilize or will they push even higher?”

Sturtevant says that if inflation remains stubbornly high, the Federal Reserve could continue to aggressively raise rates. “Under this scenario of persistently higher inflation, mortgage rates could climb to 8% or beyond in late 2022 and into the first part of 2023,” she says.

But if October’s inflation data—which will be released next week—shows signs of easing and offers some indication that the Fed’s tactics are working, the Fed could pull back on its rate increases. That could mean mortgage rates would stabilize, “though probably still remaining around 7%, on average, through the first part of 2023,” she notes.

Mortgage Rate Averages This Week

Freddie Mac reported the following national averages with mortgage rates for the week ending Nov. 3:

  • 30-year fixed-rate mortgages: averaged 6.95%, with an average 0.8, falling last week’s 7.08% average. Last year at this time, 30-year rates averaged 3.09%.
  • 15-year fixed-rate mortgages: averaged 6.29%, with an average 1.2 point, dropping from last week’s 6.36% average. A year ago, 15-year rates averaged 2.35%.
  • 5-year hybrid adjustable-rate mortgages: averaged 5.95%, with an average 0.2 point, falling from last week’s 5.96% average. A year ago, 5-year ARMs averaged 2.54%.
Freddie Mac reports commitment rates along with average fees to better reflect the total upfront cost of obtaining the mortgage.

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Note that this information is outdated.

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Traverse City Real Estate – Prices Up – Sales Down

Prices Up, Sales Down: The Inventory Effect On Real Estate

By Ross Boissoneau | Aug. 6, 2018

The real estate market is hot, with average sale prices continuing to climb. The real estate market is down, as the number of home sales continues to drop, both locally and nationally. Area realtors say there are several factors, but demand outstripping supply is the single biggest reason for both trends — and the National Association of Realtors agrees. “The lack of inventory – I think that’s the main factor,” says Mike Annelin, a realtor with Century 21 Northland.

Often those homes that are available are garnering multiple offers, pushing prices higher. “Most realtors have lots of buyers looking,” says Beccy Janis, of Coldwell Banker Schmidt.

While those looking to sell can get a good price, they may choose not to if they can’t then buy what they want where they want it. “Those who might like to sell…what are they going to buy?” says Annelin. “It’s kind of a stalemate.”

The demand pushed June’s sales prices to a new all-time high nationally, according to the National Association of Realtors. The median existing-home price for all housing types was $276,900, surpassing the previous high-water mark set in May. That was up 5.2 percent from June 2017. June’s price increase marks the 76th straight month of year-over-year gains.

This region shows similar results: The median price in the five-county area was $236,000 in June, compared with $224,000 for June 2017; in Grand Traverse County it was $240,000, and a year ago it was $229,350.

But there were 281 home sales in the five-county region in June, compared with 329 last June, a 15 percent decline. In Grand Traverse County, the numbers show a steeper decline of 17 percent.

Lawrence Yun, NAR’s chief economist, says closings fell on an annual basis for the fourth straight month. “The root cause is without a doubt the severe housing shortage,” he says. “What is for sale in most areas is going under contract very fast. This dynamic is keeping home price growth elevated, pricing out would-be buyers and ultimately slowing sales.”

There may be more trouble on the horizon, as natural disasters continue to destroy homes. The wildfires in California have already destroyed more than 1,000 homes, while we are still recovering from the hurricanes that devastated Puerto Rico, Florida and Texas, destroying thousands of houses. “The shortage is being exacerbated by events no one anticipated. People better look at the supply chain,” warns Kim Pontius, executive vice president of the Traverse Area Association of Realtors, noting that all those homes will have to be rebuilt.

Pontius says the shortage of those in the building trades is also playing into the downturn; builders can’t keep up with demand. “We’re not adding to the quantity of new inventory,” he says.

The price of materials is also going up. “Construction costs are crazy,” says Annelin.

Exacerbating the problem is the fact that builders can make more money on higher-end homes than starter homes, that’s typically what they will choose to do. “The cost to build affordable homes is so high and they can’t make money doing it,” Janis says.

And the recession that drove people out of the state and/or the construction industry brought building to a complete halt for nearly a decade. That means there is a lack of homes from five to ten years old, further aggravating the problem.

Another factor: the cost of borrowing is going up. Janis notes while interest rates are still relatively low, the fact they are increasing is causing the market to slow.

Annelin agrees. “Banks are willing to lend,” he says. “But rates have gone up. When it goes up a point, that’s a substantial amount of money.”

Home Shoppers Get ‘Extra Time to Find the Right Home’

July 20, 2018
Mortgage rates for 30, 15, ARM. Full information at https://www.freddiemac.com/pmms/

© REALTOR® Magazine

Mortgage rates dropped slightly this week, but overall, they were mostly flat, offering some temporary relief to borrowers.

Mixed economic data this week prompted mortgage rates to remain in mostly a holding pattern, says Sam Khater, Freddie Mac’s chief economist. “Manufacturing output and consumer spending showed improvements, but construction activity was a disappointment,” Khater says. “This meant there was no driving force to move mortgage rates in any meaningful way, which has been the theme in the last two months. That’s good news for price-sensitive home shoppers, given that this stability in borrowing costs allows them a little extra time to find the right home.”

Freddie Mac reports the following national averages with mortgage rates for the week ending July 19:

  • 30-year fixed-rate mortgages: averaged 4.52 percent this week, with an average 0.5 point, dropping slightly from last week’s 4.53 percent average. Last year at this time, 30-year rates averaged 3.96 percent.
  • 15-year fixed-rate mortgages: averaged 4 percent this week, with an average 0.4 point, falling from last week’s 4.02 percent average. A year ago, 15-year rates averaged 3.23 percent.
  • 5-year hybrid adjustable-rate mortgages: averaged 3.87 percent, with an average 0.3 point, rising from last week’s 3.86 percent average. A year ago, 5-year ARMs averaged 3.21 percent.
Source:

Traverse City Delays Decision on Short Term Rentals

City Delays Decision On Short-Term Rentals

By Beth Milligan | June 19, 2018

Homeowners seeking more flexibility to rent out rooms on their properties on a short-term basis face another delay after Traverse City commissioners pushed back a decision on amending the city’s rental rules Monday. The tourist home discussion topped a busy agenda for commissioners, who also received an update on bacterial outbreaks at the city’s wastewater treatment plant and took the next step toward bonding a citywide sidewalk project and completion of the Boardman Lake Trail.

Short-Term Rentals
Eighteen months of discussion about amending the city’s tourist home policy will continue for at least several more weeks after city commissioners Monday declined to approve proposed changes to the city’s ordinance and delayed further discussion until a July 9 study session.

Commissioners were asked to consider changing the rules for homeowners in single-family residences who want to rent bedrooms on their property out to visitors through sites such as Airbnb and VRBO. The city’s current tourist home ordinance allows homeowners to obtain a license to rent out no more than three rooms in their homes for up to seven days at a time. The entire residence can’t be rented out, and residents must meet several requirements to obtain the licenses, including living on-site. Tourist homes also have to be more than 1,000 feet apart, limiting the number that can operate in the city.

Under the proposed new rules, the city would create two categories of tourist homes: high-intensity, in which up to three rooms could be rented by two people per room for a maximum two-week stay (totaling 85 or more guest nights per year), and low-intensity, in which up to two rooms could be rented by two people per room for a maximum two-week stay (totaling 84 or fewer guest nights per year). While high-intensity homes would still be required to be 1,000 feet apart, there would be no distance requirement for low-intensity homes. The rule changes also include a new application, complaint, and license revocation process; a move to require inspections every three years instead of annually; and changes such as allowing no basement rooms, employee stays, or receptions/private parties.

Though they spent several months hammering out the latest iteration of the rules before forwarding the proposal to city commissioners, planning commissioners were divided about the changes and acknowledged the new draft ordinance was unlikely to please everyone. A group of city residents had advocated for allowing homeowners to have unhosted rentals – something not permitted under the proposed new policy – and also voiced concerns the new rule changes were too complicated. Several city commissioners agreed with that assessment Monday and said the policy needed further review.

“I can’t support this ordinance as it is in this format,” said Commissioner Richard Lewis. “I think we’ve made it harder rather than simpler, and I don’t think it’s going to make the (short-term rental) issue go away.” Agreed Commissioner Amy Shamroe: “This isn’t meeting the needs for me right now to say let’s run with it. There are a lot of gaps and questions (with the draft changes).”

Commissioners agreed to discuss the proposal further at a July 9 study session and said they could form an ad hoc committee after that meeting to study the proposed changes in more depth.

Traverse City New Businesses

Marshes To Open New Restaurant

By Beth Milligan | May 29, 2018

Dan and Pam Marsh, owners of Red Ginger, have purchased the Garfield Center retail strip center, and plan to open a restaurant there this fall. The eatery will open on the south end of the center where the Thimbleberry Kids resale shop is now located. Garfield Center (pictured) is on S. Garfield Avenue between Carver and Parsons. Other Garfield Center tenants include HoneyBaked Ham, The UPS Store, Nails Tek, and others. The entire center is 17,140 square feet and is fully leased.

Pam Marsh tells The Ticker the restaurant will be “healthy fast/casual,” serving breakfast and lunch, with dining in and takeout. The couple will also explore options for delivery. The restaurant — as yet unnamed — will be open from 7:30am-4:00pm (closed for dinner).

“It’s a concept we’ve been working on for a couple years,” Marsh says, “and we’ve been looking for just the right space. We’ll feature healthy, organic, sustainable foods. I’d call it ‘healthy comfort food.'”

Marsh says the location is ideal because it is still within Traverse City limits, far enough away to not compete directly with downtown restaurants, yet still in a high traffic corridor.

Thimbleberry will be moving out in July, when initial construction on the space will begin. Marsh says the hope is to open by November 1. The restaurant will seat approximately 60.

Other openings, closings, and moves…
Traverse City Whiskey Company
is preparing for its next major phase of growth with the purchase of the former Cherry Growers fruit processing facility at 9440 South Center Highway.

The 34-acre property is the planned future site of a new distillery, rick houses, and a visitor center with a tasting room. The distillery will include end-to-end production – including mashing, fermentation, and distillation – and will eventually increase the company’s capacity from 400 to up to 4,000 barrels per year. “We learned early on that unlike distilleries that focus on clear spirits, because of our aging process we need a lot of room for barrel storage,” says owner Chris Fredrickson. “We realized this building could be a great home for us and would position us well for future growth.”

Fredrickson says the company will continue to maintain its Fourteenth Street location as a tasting room and experimental distilling site, with the majority of the company’s production relocating to the new facility. The company is working with Elmwood Township on zoning approvals to accommodate the tasting room on the new property – allowing for educational tours and product sampling – and plans to take a phased approach over the next two years to renovating the building, installing new equipment, and doubling the production staff.

In other beverage-related news, video game arcade The Coin Slot has opened a corner bar called The Keg Stand inside its East Front Street location. The bar offers six craft brews on tap from The Workshop Brewing Company, allowing customers to have a beer while playing games. The company will celebrate the addition with a grand opening party on June 12. On Randolph Street, Tilley’s Party Store and Disc Golf has installed a new craft brew tap system allowing customers to buy growlers of beer. The store is the first packaged liquor distributor in Traverse City to offer the service and plans to host tasting events with local breweries focusing “on unique beers and beer that is not available in bottles,” says partner Eric Piedmonte.

Glen Arbor clothing and accessory store Coastal opened in a new location this weekend in the heart of the Crystal River Outfitters Recreational District on M22. The company will host a ribbon-cutting ceremony Thursday from 4-6:30pm to celebrate the move. Next door to the new store, M22 Glen Arbor has launched a new outdoor wine bar patio offering 16 custom-blended wines from Black Star Farms, cider, and non-alcoholic drinks. The patio will be open afternoons and evenings through October and will host live music on Thursday nights in July and August.

Discount retail store Merchandise Outlet is opening a new Traverse City location. The company is currently renovating the former Family Dollar space at 1127 South Garfield Avenue and is in the process of hiring cashiers, associates, and receivers. The Michigan chain specializes in a wide variety of inventory offered at “a fraction of major retail prices,” according to the company. In Traverse City’s Warehouse District, Maindeck Supply Co. – a new apparel line and retail store – held a grand opening celebration this weekend at 229 Garland Street. The company offers hand-printed and Michigan-made apparel and headwear.

Also in downtown Traverse City, Crepes & Co. has opened its doors within the State Street Marketplace on State Street. French chef Vanessa Grasset offers both savory and sweet crepes featuring Michigan products including Cooper Family’s jams, Sleeping Bear Dunes honey, Moomers ice cream, and Great River Organic Milling buckwheat, among other products.

Finally, Inspire Art Gallery is closing its doors within Leelanau Studios on Cherry Bend Road. “We are sorry to announce Inspire Art Gallery will be closing May 31…due to unforeseen circumstances,” the store posted on its Facebook page. “We are exploring the possibility of an online gallery. Stay tuned!” The gallery is offering a closing sale featuring discounts up to 30 percent on many of its pieces.

City Commissioners Commit To Fix Eighth Street In 2019

City Commissioners Commit To Fix Eighth Street In 2019

By Beth Milligan | May 8, 2018

Traverse City commissioners Monday committed to reconstructing Eighth Street in 2019 – a verbal promise that sets a firm timeline goal for the city and was cited by several commissioners as justification for not temporarily repaving the corridor this year.

Commissioners made the commitment while voting to approve funding for several other upcoming paving projects, including $300,000 to reconstruct the north alley of Eighth Street between Boardman and Railroad avenues. According to city staff, that project is a key precursor to the reconstruction of the entire corridor, as it will help maintain access to businesses and residences while Eighth Street is closed for reconstruction.

During discussion of the alley project and a separate proposed $167,640 contract with Elmer’s Crane and Dozer to lay down a temporary skim coat on Eighth Street this year as a Band-Aid fix for the road’s deteriorating pavement, several commissioners expressed their desire to set a firm timeline for the entire reconstruction of the corridor.

“Our credibility is starting to get shot, because we have put it off and put it off,” said Commissioner Richard Lewis, saying he wanted the city to implement the “complete plan” for the corridor created through a 2016 public charrette process. After other commissioners echoed Lewis’ remarks, City Manager Marty Colburn said the estimated $7 million Eighth Street project could start next year if city commissioners were willing to commit to funding it.

“We do have the ability to get Eighth Street done…assuming that the city commission gives me the resources to do so,” Colburn said.

Colburn said city staff had been waiting to hear from the state of Michigan on whether $1 million in funding would be available to help with the Eighth Street project. But he said it now appears “that is not going to occur,” leaving the city on its own to fund the project. That could require tough decisions by city commissioners on how to pay for the reconstruction, such as delaying other projects, making cuts, or bonding the project.

“We can fund this, (but) it may be painful, we may not like it,” said Commissioner Brian McGillivary. “But we have repeatedly told people we’re going to do this…that road needs to be fixed, and we just need to accelerate it and get it done.”

Colburn told commissioners he would bring funding options to them for the project by this summer. Commissioners then voted 6-1 to reject the temporary overlay project for Eighth Street this year, with several saying their ‘no’ vote was directly tied to their commitment to start Eighth Street’s reconstruction by next fall. Both McGillivary and Commissioner Tim Werner reversed course on their previous support of investing in a skim coat for the corridor – support initially expressed when the reconstruction timeline appeared to be several years out. McGillivary compared the spending of $167,640 to temporarily smoothen a road that will be torn up next year to pouring money into repairing a house roof that’s “structurally unsound and would have to be replaced.”

Lewis agreed. “I’m not a fan of putting a top coat on if I’m given assurance and the public is given assurance and we have the nerve (to commit to the reconstruction),” he said. “We are doing it next year. That’s the only way we’ve got to think here, or else do this (temporary repaving project).” Commissioner Amy Shamroe reiterated the commission’s commitment to the reconstruction. “This board has decided we are doing it next year…I am confident that we will get this accomplished,” she said.

Commissioner Michele Howard was the sole ‘yes’ vote in favor of funding the temporary repaving project. She said the current condition of Eighth Street is “not good for anybody” and rebutted McGillivary’s roof analogy by saying if her roof was leaking water into her home, she would immediately repair it. Howard was also one of the two dissenting votes – along with McGillivary – to reconstructing the north Eighth Street alley, citing concerns it would “drive more traffic down that alley” where Boardman Neighborhood residents live.

Commissioner Brian Haas, however, noted the alley is not just a residential but also a commercial alley, and said the project is “one of those check boxes we’ve got to get through to reach that ultimate objective (of reconstruction). I think if we continue to put this off, it’s one more thing to add to the list next year.” City Engineer Tim Lodge also stressed that the alley repaving was an “essential element” of the Eighth Street reconstruction project. He noted that when reconstruction begins, Eighth Street will be completely barricaded off, with no traffic lanes maintained through the corridor.

“I will tell you that one of the biggest things that we can do is to assure businesses along the corridor and other property owners access to their properties during construction,” Lodge said. “This street will be entirely shut down…this project on Eighth Street is going to be tremendously impactful.”

Chuck Cady, a resident of Midtown neighborhood along Eighth Street, said he and other property owners had been waiting at least a decade for repairs to be made to the corridor and encouraged commissioners in their prioritization of the project. He said that “people who are along Eighth Street have been anxious to see their property values enhanced,” adding those values have been declining for years.

“We feel strongly that (the reconstruction) will add to the quality of life for blocks around in all directions…it’s owed to the community, it’s owed to the taxpayers,” he said.