Traverse City – What’s Next For Affordable Housing?

What's Next For Affordable Housing?

A new report by the Traverse City Housing Commission reflects a multi-year waiting list for low-income and affordable housing units in the city – and an uphill battle facing local entities trying to bring more housing to the market.

TCHC Executive Director Tony Lentych presented his 2016 annual report to Traverse City commissioners at their Monday night meeting. The report provides a detailed overview of operations at TCHC, which is authorized to purchase, construct and run city housing facilities and to administer housing vouchers for low-income renters. The commission has been in operation since 1966.

TCHC’s latest report reflects intense demand for affordable housing units – and a housing voucher wait list so extensive the organization has temporarily stopped accepting names. Of TCHC’s two properties, Riverview Terrace – which offers 115 units on Pine Street in downtown Traverse City – has a two-year waiting list, with 130 individuals waiting for apartments. At Orchardview Townhomes – which features 21 units off Carter Road – 35 potential tenants face a three-year wait for housing.

The average income for TCHC tenants is $13,262, compared to Traverse City’s average income of $47,284, according to Lentych. Only seven percent of tenants have an income greater than $20,000. The same income range – $14,643 – is true of TCHC clients relying on housing choice vouchers to subsidize rental units. The wait list for vouchers has grown to 333 names, a number so high “the wait list is closed at the moment,” Lentych says.

So what is TCHC doing to address the demand? And why – given Riverview Terrace’s mid-1970s opening date and Orchardview Townhomes’ mid-1990s opening date – has there been an average of 20-plus years between new housing developments?

Lentych tells The Ticker development is partially driven by TCHC leadership, with governing styles fluctuating over the years between a focus on maintaining existing assets and a focus on new growth. But even for those aggressively seeking out new housing opportunities – as Lentych, who’s headed TCHC since 2015, says he is – Traverse City’s market conditions and state and federal funding requirements combine to make an uphill battle for affordable housing.

“You can’t be a working family and try to afford the real estate in this community,” Lentych says. “Someone making up to $30,000 a year can’t find a place to live around here. We all know there is a demand for this, but there’s no supply – and the market is saying it’s easier to do other things.”

Lentych cites as one example a bidding war TCHC lost just last week for nearly two acres of property on Hastings Street. The organization hoped to build 14 duplexes, or 28 units, on the site. “It’s been on the market for a few years,” Lentych says. “The owner was asking $495,000. I got financing in place and bid $480,000 with six months to close, so we could get the rezoning in place. I lost out to a condo builder who bid $470,000 but could close right away.”

As a city entity, TCHC is limited to acquiring properties within city limits – where the organization faces high land and construction costs and intense competition for parcels, as with Hastings Street. The commission does have a subsidiary that can purchase property outside city limits, and TCHC can offer logistical and other forms of support to projects in surrounding communities. But venturing outside the city comes with its own set of challenges – notably, more restrictive zoning for affordable housing and a lack of funding support from organizations like the Michigan State Housing Development Authority (MSHDA) for projects outside the city center.

“(MSHDA’s) theory is why would you put investment dollars in a part of town where there’s nothing else around (the housing),” says Lentych. “So they measure walkability: distances between amenities, public transportation, sidewalks. It drives development into the city and areas where there’s infrastructure in place already. It makes sense in urban areas…but the theory breaks down in Traverse City, because we’re built out.”

Lentych has been hunting for properties in Chums Corner, for example – an area offering grocery and retail stores, farmers markets and community events at Wuerfel Park, and bus transportation into the city. Lentych asked MSHDA representatives to walk potential sites. “Their marketing people agreed it’d be a good place to invest, but MSHDA’s programs and structures prohibit them from doing so easily,” he says. “I’d have to ask for waivers (on all the criteria requirements) to get funding.” Such a request would disadvantage Traverse City when competing for MSHDA dollars against other cities looking to build housing in dense urban cores, Lentych says.

Despite the challenges ahead, TCHC plans to keep exploring all available options to bring more affordable housing to Traverse City. Lentych says in addition to parcels already on his radar – he’s currently scouting Morgan Farms for senior housing – he plans to “start looking at every piece of property” possible that could accommodate units. His and other area organizations continue to have conversations with MSHDA about discontinuing its “one-size-fits-all” funding model in favor of customized programs for communities like Traverse City. Lentych encourages residents to contact their legislators in Lansing to ask them to get involved. “We have to have a collective voice to Lansing and our federal government about having tools that address our region, to say these (existing programs) don’t fit our needs,” he says.

Because the private market isn’t likely to solve the affordable housing shortage, it’ll be up to nonprofits, community and government entities, and public-private partnerships to generate solutions. “If the county or the city or the school district has surplus property they don’t know what to do with, let’s talk about affordable housing,” Lentych says. “I’ll meet with just about anyone about how we can develop housing here.”

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