A $100M bridge: Traverse City bypass plan emerges from 30-year debate

 

By 

TRAVERSE CITY, MI — To build the bridge, or not build the bridge? That’s been the question in Traverse City for about 30 years. At long last, there’s an answer.

Yes. Build the bridge.

In Grand Traverse County, officials have finally decided to embark on a multi-year project to build a controversial piece of infrastructure that would alleviate traffic congestion in one of the fastest growing communities in Michigan.

In 2022, the county Road Commission voted unanimously to pave way for advance work on a 2,200-foot-long bridge across the Boardman River Valley, which, when finished, will create a new east-west corridor for drivers to bypass Traverse City.

Officials estimate the arching span will last 120 years and cost $100 million to build. Much of that is expected to come from federal infrastructure grants. Not counting international spans, it would be Michigan’s fourth longest bridge.

The July 28 decision marked a turning point in the long-successful effort by environmental and development opponents to keep the bridge at bay due to concern about potential negative impacts on valley wetlands and wildlife.

Opposition remains to the bridge, but project supporters say it has dwindled as the Traverse City area population swells and the few corridors which drivers can use to transit east or west across town have undergone reconstruction.

“It shouldn’t take me 40 minutes to get from one side of Traverse City to the other,” said Kevin Endres, chairman of the Grand Traverse County Economic Development Corporation. “It’s just five miles. It’s not a city with a million people.”

“There’s a demand. There’s a need for it. I see it every day,” said Endres, who works in commercial real estate. “We’re probably behind the eight ball in having this built already.” “It’s well overdue.”

New design would minimize impact, developers say

This year, consultants are determining whether the proposed bridge design adheres to the National Environment Policy Act (NEPA), which requires transportation projects to consider potential impacts to the natural environment.

As proposed, the bridge would only touch the valley floor in four places (aside from the abutments on either end). The pillars would support a span about 70 to 80 feet above the valley. Project managers say that design was chosen to minimize environmental impact.

“It’s going to be a very high, long bridge,” said Brad Kluczynski, Grand Traverse County Road Commission manager. “Its service and function will be to take a big portion of the traffic off South Airport Road. In fact, with the traffic studies that were done, it’s anticipated that we will actually reduce traffic as far north as Front Street or along the bay.”

Because of its geography, Traverse City isn’t the easiest community to travel east or west across. Grand Traverse Bay, the Boardman River and the 317-acre Boardman Lake are natural impediments to crosstown traffic. In town, drivers are pinched into the bayside Grandview Parkway, downtown Front Street, Eighth Street or neighborhood side streets.

At the south end of Boardman Lake, the heavily trafficked South Airport Road retail corridor carries commuter, business and regional bypass traffic and is generally considered a chore to navigate. To avoid it, drivers must enter the city — which can be exceptionally busy during the summer — or detour several miles around the river valley via Cass or Beitner roads.

Kluczynski and bridge supporters say a new crossing would solve that problem. The bridge would connect Hartman Road on the east side of the valley with Hammond Road on the west and would enable drivers approaching Traverse City from the south on U.S. 31 to peel off and head east through a suburban area which is experiencing significant growth.

East of the river, Hammond Road connects to Garfield and Supply roads, which are both access routes to and from Traverse City via U.S. 131. Hammond also connects to Four Mile Road, which enables drivers to reach U.S. 31 along the foot of East Grand Traverse Bay and other communities north and east without traveling down South Airport or through town. When it opens, the bridge is expected to carry between 22,000 and 26,000 cars per day and reduce traffic flow on South Airport Road by 30 percent, Kluczynski said.

That day, however, isn’t right around the corner.

Kluczynski said the NEPA analysis will take at least a year, followed by a couple years of design fine-tuning, land acquisition and securing access easements. Hartman Road will need expansion and a new connection to U.S. 31. If all goes well, groundbreaking is anticipated in 2027.

Actual construction would take another two-plus years, meaning it’s unlikely any cars will be traveling across the valley on a new bridge before 2030.

New corridor has always been controversial

The Road Commission says public support has grown significantly for the project in recent years.

Nonetheless, some local business leaders and statewide economic development officials would not speak to reporters about the regional value of the project.

Matt McCauley, vice president of regional prosperity at the Michigan Economic Development Corporation (MEDC) and former CEO of Networks Northwest, which functioned as a subcontractor on Traverse City corridor studies, would not talk about the bridge when contacted by MLive.

McCauley deferred comment to Warren Call, CEO of TC Connect, a chamber organization which leads economic development in the region. Through a TC Connect staff member, Call also declined to be interviewed about the bridge’s potential impact on regional development.

Opponents are eager to talk about the bridge.

The Northern Michigan Environmental Action Council (NMEAC) and Groundwork Center for Resilient Communities in Traverse City both oppose the bridge, arguing it could negatively impact the ecology of the river valley as well as invite development sprawl along the Hammond corridor.

“It’s just not needed,” said Ann Rogers, chair of the NMEAC board. On South Airport, “there’s only congestion twice a day — late in the afternoon and sometimes during the morning.”

Rogers thinks the bridge will harm the river valley ecology during construction and would inevitably become a source of salt, sand and other automotive pollution.

A bypass project would be better suited further south, perhaps as far as Kingsley, she said. 

Jim Bruckbauer, transportation program manager at the Groundwork Center, argues that improving traffic flow on existing corridors, such as adding roundabouts and improved signaling on South Airport, as well as widening Keystone Road, are more cost-effective options.

“There is concern that building a new crossing would further exaggerate that same issue, which is creating more congestion because you’ll see more development in those areas if there’s a new corridor,” Bruckbauer argued. “We just believe that fixing our existing roads is the right approach before looking at these new major projects.”

John Nelson, a NMEAC board member, echoed that. Development enabled by the bridge will have negative spin-off impacts in the watershed, he said

“What you’ll end up with is another commercial corridor similar to South Airport and it’ll create its own traffic,” Nelson argued. “You’ll end up with another congested corridor which is lined with commercial development.”

East-west connection issue has long been studied

Environmental and urban sprawl concerns have successfully derailed attempts to build the new bridge in the past. A Hammond-Hartman connection has been eyed for decades and was first proposed as part of a $25 million road package rejected by voters in 1987.

The Boardman River valley has changed significantly since then. In the past decade, three obsolete hydroelectric dams were removed as part of a major river restoration effort launched in 2012. All that remains of the massive undertaking is the removal of the Union Street Dam in downtown Traverse City, an effort which is presently stalled in court.

On the traffic side, six different transportation studies between 1992 and 2018 examined the need for a bridge to varying degree as part of a years-long analysis period involving many public meetings and workshops geared toward future transportation and land use around the wider area.

Facing environmental opposition, the Road Commission set the bridge aside in 2004 as the Grand Vision study launched. It resurrected the idea in 2017. Dual studies launched in 2018 examined several alternatives to a Boardman River crossing south of town and, in 2022, consultants recommended a Hammond-Hartman bridge as the best option.

Kluczynski said past designs showed too much impact on wetlands in the river valley, which is now frequented by anglers, hikers and kayakers drawn to a 158-acre nature preserve. He said plans to add a bike lane, a viewing platform and connect bus routes have helped bring people onboard.

On the funding side, “90 percent of this project will be federally funded,” Kluczynski said — thanks in part to increases in population which have put the Traverse City area over the 50,000-person threshold to quality for certain metropolitan planning and infrastructure grants.

Endres, who works in commercial real estate as an owner at the Three West brokerage, said travel time is becoming increasingly important not just for employees looking to shorten or eliminate commutes through remote work, but for businesses moving product.

The area is attracting more distribution businesses looking for smaller distribution centers as supplier and wholesaler logistics change, he said. That will only increase traffic.

“Having seen the progression over the years — working in economic development and commercial real estate — traffic is an increasing problem, issue and topic I run into,” Endres said. “The reason is because of the lack of east-west connection.”

“There might be a select few people who oppose this bridge, but there’s a whole lot more — like the majority — who want this thing built,” he said.        “Doing nothing is not an option anymore. We’re past that.”

 

 

New Generations of Home Tech Combine Style and Substance

 

 
CES 2023 brought product debuts that aim to influence future home design, like an air conditioner disguised as framed artwork. Check out the most-hyped gadgets from the technology industry’s biggest show of the year.

New real estate technologies are vying to influence how the home of the future is designed. That was one of many themes at CES 2023, the tech world’s annual mega show in Las Vegas, where thousands of the latest gadgets and gizmos targeted home, business and everyday life. Here, we round up some of the latest products, which includes several CES 2023 Innovation Award honorees.

‘Cool’ Art

A wall-mounted air conditioner disguised as framed artwork, LG’s ArtCool Gallery(link is external) AC unit has a 27-inch LCD digital picture frame that can display photos of your choosing. This can offer some design pizzazz. ArtCool is also compatible with Google Assistant.

Availability: TBD
Price: TBD

Scent-Infused Showers

Kohler debuted Kohler Sprig(link is external), which adds aromatherapy to an existing showerhead by infusing water with scents and oils. Kohler initially will offer six different scent pods, including lavender, chamomile or eucalyptus.

Availability: spring
Price: $119 for the system; $21 for a six-pack of single-use pods

Color-Changing Fridges

Refrigerators with LED screens on the front panels of the doors isn’t new; but now the doors are getting lit. LG’s MoodUp Refrigerator(link is external) features LED doors that can light up in 190,000 different color combinations. Sync it to music to bring disco night straight to your kitchen.

Availability: TBD
Price: TBD

Hidden Handles

How do you open that? Samsung’s Bespoke(link is external) refrigerator line debuted a side-by-side option with a flat, minimalist design that may leave some guessing. It features “auto open door,” which instantly opens the door with just a touch. The front door panels are available in glass or stainless steel finishes.

Availability: first quarter 2023
Price: TBD

A Door That Welcomes You Home

It’s the smartest door in the neighborhood: The Masonite M-Pwr Smart Door(link is external) includes built-in motion-activated LED welcome lights, smart lock and Ring video doorbell. All features can be controlled remotely. The door connects to the home’s power supply but also has a battery backup to protect against power outages. The door will be available in a variety of styles, colors and finishes, including multiple glass options.

Availability: TBD
Price: $6,500

Reinventing the Bathtub

Kohler’s Stillness Infinity Experience(link is external) brings a Zen-like, multi-sensory bath experience that combines water, lighting, mist, essential oils and soothing sounds. It features water cascading over the top that then recirculates and re-filters after falling into a wooden moat basin below. This souped-up tub debuted in 2022 but will have three new models available for 2023. Prices will range from just under $11,000 to more than $17,000.

Smart Lock Add-On

Smart locks are enabling more homeowners to ditch the keys and gain access to the house via a code. Many CES 2023 debuts continued to showcase that trend, including Lockly’s Flex Touch Pro(link is external). This smart lock offers an added benefit: It doesn’t require you to remove or replace your existing deadbolt, which could be an attractive option for renters or Airbnb owners. It can add a fingerprint reader to an existing lock for gaining access. Also, you can remotely grant or deny access to visitors who arrive at your doorstep.

Availability: spring
Price: $229

Robotic Lawncare

Leave it to an all-weather yard care robot to do the heavy-lifting. Yarbo(link is external) can mow the lawn, clear the snow and blow leaves or debris from the yard. It has three attachments that can be switched off for fulfilling these different yard-care needs. Yarbo uses GPS positioning to determine the yard area and stays within the boundaries. You can monitor the robot’s work from an app. It can handle steep slopes, too.

Availability: TBD
Price: TBD

Touchless Window Shades

Smarten up your existing window coverings. Eve’s MotionBlinds(link is external) upgrade kit can make standard roller shades “smart.” Close or open blinds without getting up via an app or just by using voice commands when connected to a voice assistant. The kit features a USB-C rechargeable motor that reportedly can last up to a year between charges.

Availability: late March
Price: $199

The Family Robot

Robots are always popular at CES, and this home assistant from Enabot may offer a peak into where the technology is heading for the home. Enabot’s EBO X(link is external) is a two-wheeled robot companion that can follow you and offer assistance around your home, including health monitoring, security and entertainment. It includes a 4K camera, two-way communication capabilities and a range of sensors for navigating a space. Ask EBO X to play music, provide security alerts, check up on loved ones from afar or set reminders, such as for taking medication. Sync it with other Alexa-enabled devices for even more home control.

Availability: second quarter 2023
Price: $999

A Wireless TV

Ditch the television cord for good. LG showed off the M3 OLED smart TV(link is external) that can stream content wirelessly. This may allow more freedom to place a TV anywhere, without the mess of plugs following behind. LG also showed off its OLED T prototype, a completely transparent screen you can stick your hand through. The TV dissolves into the background when not turned on and could show the future of TV design.

Availability: TBD
Price: TBD

 

City Commissioners To Talk Bijou Contract, Senior Center, Jefferson/Madison Reconstruction

By Beth Milligan | Jan. 16, 2023

Traverse City commissioners Tuesday will discuss the Traverse City Film Festival’s use of the Bijou by the Bay after the festival operated the theater for only 121 days in 2022 – well short of its contractual requirement to be open at least 200 days. The TCFF board is invoking a force majeure clause in the contract, saying the closure was pandemic-related. City commissioners will also hold a public hearing Tuesday on plans to rebuild the Senior Center and vote to approve a contract for the reconstruction of Madison and Jefferson streets, among other agenda items.

Bijou by the Bay
City Mayor Pro Tem Amy Shamroe has requested a discussion about the Traverse City Film Festival’s (TCFF’s) use of the city-owned Bijou by the Bay building after the festival submitted an annual report invoking a force majeure clause for failing to meet its contract terms in 2022.

TCFF is required to “maintain a minimum program of at least one film showing per day for at least 200 days per year” as part of its contract to run the Bijou. Festival board members said in their report that “due to the ongoing worldwide health crisis, the Bijou by the Bay movie
attendance followed the nationwide trend of decreased pandemic attendance.” The report states that rival movie theater AMC is only open for “60 percent of the showtimes it once offered in pre-pandemic days,” and that “all indoor businesses, restaurants and gathering places have seen a similar drop-off, especially amongst older adults.” For those reasons, the board said, TCFF is invoking force majeure for 2022 “due to the ongoing coronavirus public health emergency.”

Shamroe says she wants to have a discussion with the city attorney and staff about how and when tenants can invoke force majeure. She notes that tenants in other city buildings, such as Brew, had to close at early points in the pandemic due to shutdown orders, but were open throughout 2022. TCFF also operated the State Theatre through 2022, she notes, questioning why one theater was open but not the other. “I don’t know if we’ve encountered something like this before,” she says. “The Bijou is supposed to be there for the public to use, including for nonprofits and other groups to use, but they’ve often been closed. They opened for their own festival, but then closed again promptly.”

Festival board members said in the report that they “fully expect and plan to have the Bijou open for at least 200 days in 2023, pending no further shutdowns due to the pandemic or other force majeures.” The board said there is a new executive director at the organization, Angie Forton, and that TCFF plans to continue offering “exciting, fresh, diverse movie programming for our community and a first-class, singular experience for moviegoers of all ages.” The board added: “We look forward to bringing the city even more good news at the end of 2023.”

Shamroe also wants to discuss another part of the TCFF annual report. In 2021, TCFF came to the city to request a 10-year lease extension for the Bijou. At the time, the festival’s lease agreement was still good through July 2023, prompting some commissioners to question why a decade-long extension needed to be approved two years in advance. Some community members asked for the extension to be delayed, citing concerns about festival operations and the desire to create a new community-based nonprofit board to run the Bijou. TCFF representatives countered that they needed the early lease extension so they could move ahead with major building investments, including installing a new HVAC system and COVID-proofing the Bijou. Commissioners voted 6-1 to approve the lease renewal, with Shamroe opposed.

In TCFF’s recent report, the board said the festival ultimately never made the HVAC repairs to the Bijou. “The extensive HVAC structural change anticipated in the 2021 (amended lease) were not made,” the report states. “Instead, the replaceable air filters were upgraded to a MERV-l3 rating to improve air quality. This change required no structural modification to the HVAC system and did not rise to a level that would require notification or approval.” Shamroe calls the change in plans “a lesson that if someone comes to us with a request to vote early to extend a contract, we might need to pause or at least build those (conditions) into the contract renewal.”

Shamroe says she’s not necessarily looking to take significant action on the Bijou contract Tuesday – such as terminating the agreement or evicting TCFF – but wants to better understand how the contract will be enforced going forward. “I don’t know if we have grounds to cancel the contract, but it’s something that needs to be discussed publicly,” she says. “The public deserves to know what’s going on.”

Also at Tuesday’s commission meeting…
> Commissioners will hold a public hearing on a planned unit development (PUD) application for the Traverse City Senior Center to be redeveloped on city-owned property on East Front Street. The public hearing for a PUD – which is a zoning plan tailored to a specific property, usually because of the complexity of the development – must follow a specific formal process that includes a staff presentation on the project, public comment, city commission deliberation, and a vote to grant the PUD. The PUD has already been supported by the city’s planning commission and – if approved by commissioners – would pave the way for the planned reconstruction of the building to proceed later this year.

> Commissioners will consider approving a $3.916 million contract with Team Elmer’s for the reconstruction of Madison and Jefferson streets this year. That figure is higher than the city’s original estimate of $3.394 million. According to a memo from City Engineer Tim Lodge, the city reviewed the bid and found that the original estimated costs “associated with pipe installation for the storm sewer, sanitary sewer, and watermain were too low. We discussed the higher bid costs with (Team Elmer’s, the sole bidder) and found that the higher costs for the pipe installation were attributed to the need to replace all of the trench backfill material instead of using existing soils…also, most all of the estimated costs for the concrete work were too low. (Team Elmer’s) indicated the higher pricing was due to concrete material supply shortages and increased pricing, which are prevalent in this year’s construction costs.” The project will be covered via the city’s sewer fund, water fund, parks tree fund, and capital project fund for street reconstruction.

> Commissioners will consider adopting a city building electrification policy proposed by Commissioner Tim Werner. The policy is intended to “make significant advancement toward Traverse City’s commitment to become carbon neutral before mid-century,” according to its language, and would require all new buildings built on city-owned property to be fully electrified. It would also require buildings that qualify for a city payment in lieu of taxes (PILOT) agreement to be fully electrified, and all vacant city property that is sold or leased to be deed restricted for full electrification. Any city buildings that undergo major renovations would need to be fully electrified at that time, and all regularly scheduled replacements of city-owned boilers, other heating, and hot water supply would require full electrification. In addition, all new and replacement backup power would be supplied by batteries or micro-grid, according to the policy language.

> Finally, commissioners will vote on agreements that could allow a new downtown parking deck to move forward on State Street – a shift south in location from an originally planned spot on West Front Street – and for affordable housing to be built on Lot O at the corner of State and Cass streets. Read more about both proposals in detail here.

Kingsley’s Big Year

By Beth Milligan | Jan. 4, 2023

A new village manager and new school superintendent. A $3 million lead pipe replacement project, $1.6 million park makeover, and nearly half-million-dollar street reconstruction. A new community brewpub opening, plus multiple restaurant and other business changes underway. Kingsley is set to have a banner year in 2023, with the community embracing transformational change and planning for the village’s long-term future.

Leading the charge is new Village Manager Kaitlyn Aldrich, who took the reins from former manager Dan Hawkins at the end of 2022 (Hawkins stepped down to spend more time with family). Aldrich, who has a master’s degree in public administration from Central Michigan University, was previously the planning assistant for the City of Traverse City and prior to that worked in the city’s engineering department.

“City management is ultimately how I want to spend my career, and I’ve always been attracted to public service,” she says. “But I didn’t want to relocate my family. I coach volleyball here for TCAPS; we love Traverse City and the community. Opportunities (for city management) are few and far between in northern Michigan. So when Dan Hawkins announced his retirement, I was very eager to apply and put into practice what I spent six years studying and then working on at the city.”

Aldrich is coming on board during a pivotal time for Kingsley. Just a few weeks into her tenure, Aldrich appeared before Grand Traverse County commissioners to plead the village’s case for receiving $1.5 million in American Rescue Act Plan (ARPA) funding for a lead service line replacement project. The project – an unfunded state mandate – was already approved for a $1.5 million state grant, but construction bids came in over $3 million, leaving a significant funding gap. Kingsley’s ARPA application had been ranked among the “Tier 2” projects for county funding – meaning it wasn’t among the top recommended projects – but county commissioners nonetheless voted to allocate $937,500 to the village for the service line replacement following Aldrich’s remarks.

Aldrich calls the funding a “game changer for our community,” noting that Kingsley is only a population of roughly 1,600 people with an annual water budget of $850,0000. The service line replacement project, which will replace lead service lines to approximately 240 village businesses and residences, could cost more than three times that entire annual budget. “The only way Kingsley could get this project done is through grants or raising our water fees, and obviously we don’t want to do (the latter),” Aldrich says. With most of the funding now secured, next steps will include rebidding the project this spring in the hopes of attracting more bidders and lowering costs. “We’re 95 percent of the way there and feeling confident and ready to go,” Aldrich says, adding that construction could begin by early summer.

Other major infrastructure projects are also on deck this year. The Michigan Department of Transportation will completely reconstruct South Brownson Avenue between M-113 and Fenton Street this spring, a project estimated to cost $478,000. Aldrich says work is expected to begin in April and take six to eight weeks, with the goal of completing the street by the end of May before the Adam’s Fly Festival and Kingsley Market kick off in June.

Work could also begin by early summer on the planned transformation of Brownson Memorial Park. Kingsley was awarded a $1 million grant this fall from the Michigan Economic Development Corporation (MEDC) for the project, which will allow the village to add a new shared-use path, fitness equipment, upgraded playground features (including ADA-accessible and multi-sensory options), splash pad upgrades, and other landscaping and placemaking improvements. The total “bells-and-whistles” vision for the park comes in at $1.6 million, according to Aldrich. The village is required to put up a $111,000 local match to the MEDC grant, and Rotary has awarded another $50,000 to the project. Aldrich says right now Kingsley has a “fantastic” $1.2 million park project ready to go, but will continue to look for additional funding sources to “create the full community vision Kingsley residents were looking for,” she says.

More changes are also on the village horizon. In addition to Aldrich, Kingsley will soon welcome another key community leader: a new school district superintendent. The Kingsley Schools board of education voted unanimously in December to hire Brad Reyburn following the departure of former superintendent Keith Smith, who received a controversial $700,000 buyout last year to resign. Reyburn, who most recently served as principal of Newaygo High School, has 11 years of administrative leadership experience and has worked as an elementary and middle school principal. According to Interim Superintendent Jason Stowe, the school district has just finalized a contract with Reyburn – which will be posted next week in a district transparency report – and will officially welcome Reyburn to the role starting February 1. Stowe will remain in his interim role until then. “Kingsley is super excited about having Brad join the team, and we can’t wait for him to get started,” Stowe says.

In addition to leadership changes and infrastructure projects, Kingsley’s commercial sector is also undergoing a significant revamp. Owner Pete Kirkwood says he’s waiting on final inspections to open the new Kingsley Local Brewing Company on Brownson Avenue, estimating the community brewpub could open within the next few weeks. In addition to restaurateur Brian McAllister of Hofbrau taking over the former Judson Market & Restaurant space and potential tenants being interviewed for the former J. Wall Diner spaceThe Ticker’s sister publication Traverse City Business News reports that the former car wash on Clark Street and the Kingsley Lumber building on Brownson – which could be vacated in the near future if the lumber company relocates – could also soon host new businesses. The former Pugsley prison is also on the market, a $3.95 million listing that could – if the right buyer comes along – eventually lead to a massive redevelopment of the abandoned site.

With so many changes underway, Aldrich – working with other community leaders like new Kingsley Village Council President Mary Lajko – says her main focus for 2023 is plotting a clear path for future community growth. “Kingsley lacks some foundational visionary plans,” she says. “Our master plan needs a complete rewrite, so that process has started in its early steps. Our capital improvement plan is also outdated. In small communities like Kingsley, we don’t have a lot of staff, so this is common. We don’t have a full-time planning director or zoning administrator. But in Mary and I’s conversations, it’s become clear that Kingsley needs these long-term visionary plans and community engagement so that when new opportunities come along, we can hit the ground running.”

Aldrich adds: “Kingsley right now is in a transformative stage. But I don’t want it to be a one-and-done. We want to make sure that how we want Kingsley to look in 20 or 30 years is reflected in the type of investments and business opportunities we welcome to the community.”

 

 

21 Real Estate Wins in Government Spending Package

The omnibus bill cleared Congress on Friday and now goes to President Joe Biden’s desk for his signature.

Traverse City To Consider Lighting Ordinance Changes, Common Good Liquor License, Public Art Contract

By Beth Milligan | Jan. 2, 2023

Traverse City commissioners will discuss possible changes to the city’s lighting ordinance Tuesday prompted by a lawsuit filed by a Slabtown Neighborhood resident over the lighting at Immaculate Conception Elementary School. Commissioners will also consider approving a liquor license for Common Good Bakery – which has significant expansion plans for its second new location on Eighth Street, including a partnership with celebrity chef Mario Batali – and will consider approving a contract to extend a public art installation along the Boardman Lake Trail.

Lighting Ordinance
Commissioners will discuss possible changes to the city’s lighting ordinance Tuesday, with a possible enactment vote to follow on January 17. The proposed changes, which were unanimously supported by the city planning commission, would allow decorative and outdoor lighting to emit up to 1,125 lumens – the equivalent of a 75-watt incandescent bulb – without having to be shielded. That’s an increase from the ordinance’s existing limit of 500 lumens. All outdoor lighting more than 1,125 lumens would have to be directed downward with 100 percent full cut-off shielding above the horizontal plane at the lowest point of the light source.

According to a memo from City Planning Director Shawn Winter, the changes were prompted by a lawsuit filed by a neighbor of Immaculate Conception Elementary School alleging the school’s decorative unshielded globe lights violated city standards for outdoor lighting. After a judge ruled in favor of the resident – pointing to inconsistent regulations in the city’s ordinance, including language indicating all outdoor lighting must be shielded – city planning staff met with the city attorney to identify changes that would make the lighting rules more consistent.

Winter noted the city’s lighting rules are intended to “minimize light trespass and light straying from artificial light sources; eliminate intrusive artificial lighting that contributes to the sky glow phenomenon and disrupts the natural quality of nighttime; minimize harshly lighted surfaces and direct glare in order to enhance nighttime vision; encourage lighting practices and lighting systems that are designed to conserve energy; and provide for adequate nighttime safety, utility, security, and productivity.”

Winter noted the city’s lighting rules are intended to “minimize light trespass and light straying from artificial light sources; eliminate intrusive artificial lighting that contributes to the sky glow phenomenon and disrupts the natural quality of nighttime; minimize harshly lighted surfaces and direct glare in order to enhance nighttime vision; encourage lighting practices and lighting systems that are designed to conserve energy; and provide for adequate nighttime safety, utility, security, and productivity.”

For those reasons, the city has standards for lighting issues like shielding, Winter wrote. “However, the zoning ordinance also intended to exempt inconsequential lighting from some of these more stringent requirements,” he said. “Examples include low-level porch lights, decorative lighting, landscape lighting, etc. This is a reasonable exception that is often seen in zoning ordinances.”

However, right now “different thresholds exist in the ordinance, specifically one set at 500 lumens and one set at 2,500 lumens, where the cut-off shielding and other design standards would apply,” Winter continued. “Plus, 100 percent cut-off shielding on all outdoor lighting is almost impossible to enforce. As it reads today and based on the judge’s ruling, even holiday lights may need to be shielded.” According to Winter, the changes proposed to the city’s lighting rules would “make the standards and exceptions more clear, while also reducing by half the threshold at which the cut-off shielding would apply.”

Also at Tuesday’s commission meeting…
> Commissioners will consider approving a liquor license application from Common Good Bakery for the company’s new location at 1115 East Eighth Street, which is expected to open this month, according to a recent email to customers. The store will have the same menu and hours of operation as Common Good’s Fourteenth Street location, but will have several additions, including weekend brunch on Saturday and Sunday and a pizza and pasta wine bar menu called Common Good @ Night.

The company is obtaining a full Class C liquor license, which allows for the sale of beer, wine, and liquor. Common Good plans to sell drinks for on-site consumption as well as takeout sales, according to application documents. “Additionally, we plan to leverage our partnership with celebrity chef Mario Batali and launch a series of events designed to tackle the problem of food insecurity in northern Michigan,” owners Jason and Linda Gollan wrote. “Each event will feature a nationally known celebrity chef, with whom we will create a once-in-a-lifetime culinary event and raise tens of thousands of dollars to fight hunger.” Batali is listed as a co-applicant with the Gollans on the liquor license application.

> Commissioners will consider approving a contract to extend a public art installation on the Boardman Lake Trail for another year. Four sculptures by artist David Petrakovitz are currently on display along the trail at the end of Tenth Street as part of Art on the Tart, a Traverse City Arts Commission project. The city paid Petrakovitz $3,000 from the Public Arts Trust Fund in 2021 for the right to display the sculptures for 18 months. That contract is set to expire in April, with the Arts Commission seeking to extend the contract through April 2024 for an additional $2,000. Commissioners Tuesday are also expected to adopt a policy to handle requests for placing monuments on city property, with City Clerk Benjamin Marentette noting in a memo that the need for a policy “came to light in connection with a likely-forthcoming monument request.”

> Commissioners are expected to go into closed session Tuesday to discuss a possible property purchase. Details about the property and its location and price were not publicly disclosed, but a vote to purchase the property would need to occur in public session, at which point that information would be made available. Tuesday will also act as an organizational meeting for the commission. Appointee Linda Koebert – who is filling the seat vacated by former Commissioner Ashlea Walter, who just left for the county commission – will officially join the commission, and commissioners will make appointments to several city boards and ad hoc committees.

 

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.