Planning Commission - Regular Meeting

Ice to the flag of the United States of America and to the republic for which it stands. One nation under God, indivisible, with liberty and justice for all.

As always, we begin by acknowledging the land on which we gather as a territory of the Ottawa and Chipua peoples who have stewarded this land through the generations. Thank you for your strength and resilience in protecting this land and inspiring us to uphold our responsibilities to do the same. Uh so as we said at the top this is a unusual joint session. So we are filled with board members up here. So our staff is in the back both uh the planning commission staff and our wonderful deputy city clerk plus city clerk sorry uh will be taking attendance from back there. Uh so everyone know that you have been accounted for. Um this is a study session so no action will be taken. We have a list of presenters. There's um the agenda's out front if you have not had a chance to look at it yet and we will just be moving through that list. So in the idea of time and appreciating everybody's evening and our second study session of the day for the city commissioners, we will hand this over to uh Mr. Winters and let him just kick that off.

And just real quick, if I may, I just have a few meeting announcements to make. Uh just general announcements. I'm sorry I did skip over the announcements part because this is our second meeting of the day. So just sorry Sean announc

for this week the week of September 8th. I think as many people are aware the ninth street reconstruction project and cap seal project started today and we just extend a thank you to the residents for their patience as we continue to improve the city's infrastructure. The city's human rights commission will host a know your rights expo that's at the Traverse Area District Libraries main branch on Woodmir. That's this Friday, September 12th, from 10 am to 2 pm. And then the Traverse City Arts Commission is hosting its first ever mural festival beginning this Friday, September 12th through September 17th. And that event will take place uh in the North Boardman Lake District, which with multiple murals painted on multiple buildings, uh several art exhibitions and more activities planned. And then I just wanted to thank the city commission and the senior staff at the city and the members of the public and city commission candidates for attending the uh study session earlier today at 3:30 on uh our initial discussion on developing objectives and key results. I thought it was a great discussion and I'm looking forward to the work ahead and that's all that I've got. Thank you. And thank you for that because I was actually going to I forgot to mention that that was recorded. So people who weren't there in person u might not have caught a broadcast of it because it wasn't but it will be available as a recording um in the near future. So now sorry about that Sean. I teed you up and then we took it away. So now it's back to you.

That's fine. I don't actually have much to say today. Again just good evening. Sean Winter city planning director. Thank you for participating in tonight's joint session of the city commission and planning commission on the topic of housing. We have a number of presenters in our program today. So we're going to kind of let them just roll through. Um, we've kind of asked them to stay to about 15 minutes each with five minutes of questions for you all with the exception of Liz Keegan who will be our first speaker because Liz is joining us from the Fair Housing Center of West Michigan. Um, we are uh required to abide by the rules of the Fair Housing Act. So, the federal fair housing act actually. Um, and as a CDBG recipient, we're required to have this training. So, she'll be providing that. Uh after Liz, we'll be mo moving to Tony Linty from the Michigan State Housing Development Authority who'll be discussing some of the work that his agency has been doing throughout the state as well as some new programs that they've launched that can help address housing here in the community. We have Sarah Lucas joining after that. She is the executive director of the Office of Rural Prosperity, a fairly new uh agency within the state that advocates and supports communities in the rural parts of the the state such as ours. Then we'll be joined with Susan Lighhouser Yei of Housing North, who who will be providing an overview on the neighborhood enterprise zone, which is a piece of legislation that got amended and signed into law in 2023 to help address the housing issues throughout the state. And then lastly, we'll have Lauren Tribal, the city attorney, talking about the attainable housing facilities act and the residential housing facilities act and how they may address some of the issues that we are working with as well. So, one of the objectives we'd like to have at coming out of this meeting tonight is a discussion from the two bodies about what direction you would like to go with these tools that the state has enabled for us to use to address this issue. Um, and part of that is because some of these tools to implement will take a multi-disiplinary approach from staff. We'll have to write the necessary ordinances, establish some districts, as you'll learn, set public hearings, and bring them to a vote. So, in order to begin that coordination, we're just asking that the bodies be able to provide some direction of what they may

be willing to support. No commitments at this time, but we just haven't had this opportunity since those new pieces of legislation were signed into law. So, with that, I will turn it over to Liz Keegan. She again is up from Grand Rapids joining us from the Fair Housing Center of West Michigan. Thank you, Liz. Thank you.

Good evening, everyone. Hopefully, you can hear me. Okay. I brought a lot of information with me as I always do. We are very excited to be active and partner with the city of Traverse City. So, um I'll move quickly through my slides and I do have a little bit of time at the end of my chunk of time for questions. So, I look forward to those if you have any. If we don't get to any, my contact information is available and we just really encourage any of you to reach out with any questions that you think the Fair Housing Center can assist with. So, um so I'll briefly talk about our center, what we do. I'll uh give an overview of what groups are protected under fair housing laws and why this all matters. Um I was asked to touch on history, but I'll really try to lean on some case examples to really illustrate where we can contribute to the conversation that's happening tonight and how the laws can be applied and some of the resources that we have. We have a lot of available resources on our website. Um but I'm also happy to kind of send things directly to you if you have questions. Um so with that said, we'll dive in. We are a private nonprofit organization. So, we don't have enforcement authority. We're a traditional nonprofit in that sense. Um, we do not have attorneys. So, therefore, nothing that I'm saying tonight is legal advice since I am not an attorney that follows. Um, and we're really um hoping to provide just kind of a highlevel overview of uh fair housing in a time where we're facing a record shortage of course of housing. There's a lot of conversations happening about housing. And so we're looking to uphold fair housing within that housing development uh ongoing conversation. Our mission is really focusing on prevention housing discrimination uh wherever we can. It's much easier to prevent it and help manage risk on the front end versus trying to undo the harm of an individual experiencing discrimination or taking the time, expense, etc. to respond to a housing discrimination complaint. So we really emphasize education first. Um, so here's a list of all the things that we don't do, which really I hope

brings home the fact that we only do fair housing. It's a rare luxury for a nonprofit, but believe me, we have enough to do and that we only do fair housing work. Um, we've got a great team of 10 folks and uh have lots of resources within that network to hopefully help share. If you're looking for resources, you know, we've we've worked with a number of the groups that are here tonight. We try to make the best referrals that we can. If there's anything you want me to take home, please let me know. Um because I know there's tremendous agencies doing a lot of this work already, you know, but um I think it's tough when your name is Fair Housing Center. That invites a lot of questions and a lot of things that are happening that might be unfair but aren't illegal or not addressed by civil rights law. So that's one of the challenges we're up against. So what we do do is focus on unlawful discrimination, which is based on protected classes that exist at the federal, state, and local level. And so I'll I'll review what those are. But really what I want you to think about is it's about who who is protected. So that's really one of our first questions as we're considering whether or not something is a fair housing issue. We ask ourselves that immediately inhouse who's protected and then what is the transaction in the housing world that we're looking at? Is it a rental sale, loan, insurance, etc. And really that's how we can kind of help decide are we in the fair housing world and do we need to provide best practices, resources, etc. Fair housing laws do cover land use and zoning, which I'll talk more about in detail. U but essentially we're following federal, state, and local law. So the list of protected classes has grown and um especially here in the state of Michigan has grown significantly. I started part-time in fair housing in 2001 and for a long time this slide did not change, but we've had a lot of changes in the last few years. And so it's important to acknowledge that more groups do have protections under fair housing laws. And so we want to consider are they being included in the work that we're all doing as we think about providing housing for all,

who has access to housing, and who might be left out. So this is uh kind of the tiers of the groups. It's race, color, meaning skin color, religion, national origin, sex, physical or mental disability. Family status is basically somebody under the age of 18 living there. Families with children. They are a protected class that people often aren't aware of. Here in Michigan, we have whether or not somebody is married or their marital status, their age, the kind of the exemption for senior housing. If it's 55 and older and 62 and older, that's allowed under federal law. We also have race with a new definition that includes hair texture and hairstyle. And we have sexual orientation, gender identity, and expression added very recently. And the newest uh this year as of April 2025 is a limited source of income protection only in rental housing and only for landlords that own five or more units in the state of Michigan. Claire's mud. Yes. Okay. So remember I started with let us know when you have questions. We know this is complicated. We know there can be a lot of gray areas under fair housing and boy with this brand new law there's a lot of questions that we have and you may have as well. So if you're hearing from folks who want more information feel free to send them our way. Traverse City has had a local ordinance for many years. So, height, weight, sexual orientation, gender identity have been protected here for a while. Um, the height and weight issue is often kind of rolled in with the other groups uh like accommodations, employment that are protected under civil rights law. We have only had a handful of calls about heighter weight in housing discrimination, but the protections exist and as Sean said, we want you all to be informed. So, if you're wondering how those are there, that is why those are there. So, very briefly on the source of income protections, this has been a very um a moving target, a longtime conversation with housing advocates of how can we encourage uh housing providers to be willing to rent to people who don't have a paycheck every other week. There's all sorts of legal income that's available to people whether they're retired, whether they have disability income, whether they have assets, they're living

off of interest of a beautiful bank account somewhere. You know, there's all kinds of other ways that people do have income that can help them qualify for housing. A big one, of course, is vouchers, housing choice vouchers, uh vouchers for veterans. Commonly known back in the day, uh the housing choice vouchers were section 8 vouchers. Um and so there was a a gosh multi-year process of of can we expand source of income protections across the state to encourage housing providers to accept non-employment uh legal income and uh from an ongoing basis. And so that is now one of our new protections for most landlords, but not all. Really depends on how many properties they own. Um there's also an encouragement for any housing agencies that are working with vouchers to move quickly to move within a 30-day window. Um so that the process of leasing out a unit doesn't get held up. So very quickly, some of the prohibited behaviors if you if their person is a covered landlord is really they shouldn't be treated any differently because of where their income is coming from, their source of income. Note that it's not amount of income. They still need to make the amount in order to qualify. That's something that people can get confused by. But essentially any difference in treatment, any discouragement, any denial or termination of an existing lease, treating them differently, um or uh misrepresenting availability of units, uh that would all be potentially violations of these new ordinances as would any ads or statements kind of saying we don't accept section 8 again if it's a covered landlord. So, we are going to be doing hopefully a lot of more education about this. We're working with Misha on some um grant funds to do some training. So, we'll have a lot more coming out about this, but wanted to make sure that was on everybody's radar as a new protection. So, kind of back to our conversation tonight. How does the Fair Housing Act impact zoning and land use? Well, fair housing laws that I talked about, all those layers cover dwellings, which is very broadly defined. This is something common under fair housing laws. There's broad definitions of certain terms and

dwelling is one of them because not only does it include buildings and structures or even portions thereof, but empty land, vacant land that's intended to be used uh for residential structures is covered as well. Um any decision related to developing or using that land should comply with fair housing laws based across all of the layers of law that we have and really goes back to, you know, it shouldn't be a decision based on who the prospective residents or tenants might be. Why does all of this matter? This is a whole topic. I could keep you here forever, but since this is study sessions number two for some of you, and I'm only the first speaker, I won't do that to you. But I like this little graphic here because it shows the equal housing opportunity logo and really with how our communities have developed, where you live really impacts what access you have to things like transportation, education, healthcare. Do you have a bike trail, a park, a grocery store with, you know, good green groceries? um do you have the ability to get a job or get transportation to that job? That's all tied to where we live. And so upholding housing choice for people to choose where they live free from discrimination we believe builds strong communities, makes communities welcoming and makes them sustainable for years to come. Um, if you enjoy kind of going down wormholes, uh, this won't be animated. Uh, and I apologize for that, but there are some really interesting, um, tools out there that you can actually figure out. If you plug in your zip code or even in this website, your address, it will tell you what your life expectancy is. So, we're better understanding truly how that difference can be. I've seen up to a 10-year difference when I've plugged in different addresses. Don't do this until you have time because you will start going through your history of where did I live and where I'm going to plug in those addresses. And you know, I've seen up to a 10-year difference within a four mile radius when I've plugged in um numbers from different neighborhoods. So, it really does matter where we live. How did we get here? Well, there's been a lot of policy, a

lot of law that was really based on separating people, especially segregating populations by race. And often it was required. Um, for example, realtors who would try to integrate neighborhoods could be punished back in the day if they were trying to be affirmative and allow for uh home sales across race. Uh, they could lose their livelihood. So, we've got a a legacy to overcome. Starting with some of the government policies which include restrictive covenants. This is an example from the Seattle area in 1930s um to 1944. This was put in place to restrict any persons not of the white or Caucasian race except for uh those who were a domestic servant employed by a white person. Those folks were allowed on that property. So when I gave a a presentation to a historical society, one of the members dug up a covenant for where I live in Kent County, which is where Grand Rapids is, and said, "I found one. I found one." And then wait, I shouldn't be that excited. And I said, "No, that's helpful. You know, we need to see this where we live." Um and again we have a limitation here um refusing ownership uh or occupancy of the premise for anyone who has a perceptible strain of negro blood using the language of the time. Um so that is one of the ways that kind of withheld housing opportunity. A lot more folks might be familiar with the term redlinining. So that's a map here of the United States of the 236 communities that were large enough at the time in the 1930s that uh kind of the study was done of where are we going to make loans? What's a safe neighborhood to make an investment in? I'm paraphrasing a lot here in the interest of time. Um but you know there were only you know a couple hundred communities that were actually mapped in this way. you can see heavily towards the east and quite a few in Michigan but not in the northern part of Michigan because we simply didn't have the population at the time to be mapped. U but I think we can think about those restrictive covenants and those restrictive deeds and then also look at

these communities that were redlined. Um the different rings and colors in the dots, if you can kind of see them clearly, can show the predominance of how much of the community was kind of graded with red, which was a failing grade, which is where the term red lining comes from. Yellow was a C-grade, which depends on your parents on if that was an acceptable grade or not. And then A's and B's were blues and greens. Um the Grand Rapids, which has exploded in the time that I've lived there. where I'm originally from Detroit on the east side. 80% of Grand Rapids received a failing score on the map and now I think you'd be hardressed to find a neighborhood that isn't experiencing that housing push and crunch and conversation. Um so some communities have been able to overcome this legacy but certainly not all. Uh this was an interesting study. This was done um in Muny. There was a, this is a pretty cool, a county um employee who was really good at GIS mapping was able to get um maps or mapped got all the addresses and mapped all of the neighborhoods that had restrictive covenants based on race and overlaid it with data from the 2012 2010 census. So, it's the percent of non-white residents um layered with those restrictive covenants. So you can see, you know, almost 80 years later, however many years later, a lot of those neighborhoods have not integrated. So that history is still in play. Um, and it's something actually Michigan has tried to do uh some work around in 2022 that a law passed that helped people kind of strike these racially restrictive covenants because they'll still pop up. They're still attached. It's expensive and timeconuming to remove them. So, every once in a while in the national media, you'll see a story of a a young family of color or someone who bought a home and found out, "Oh, I'm legally not allowed to own this. This feels very strange. Am I safe here? Am I welcome here? Was this a good investment? I just leveraged my money and future to purchase this property." Right? So, uh so we have some of that

legacy to overcome. This is a really interesting and brief history of zoning codes and how we started kind of legislating who lives where in the United States and short story. Uh I highly recommend it. It's not it's not complicated. It's really fascinating and um gives us kind of the idea of when did this come about early 1900s. And really it was looking at where can people have light and air access in big cities like New York. But also there was an underlying tension uh out on the west coast for example they were trying to remove that were traditionally operated by Chinese people into other neighborhoods. So kind of with the practical part of planning there's always kind of a layer of is this possibly discrimination based on any of the protected classes. So you know you'll kind of see that history is there simultaneously. What are the intersections? There's many. And so kind of on the one side I listed some of the protected classes where there's a direct uh connection and maybe that's kind of easier to get your arms around to think about first with uh building homes thinking about accessibility and visitability for people with disabilities. There's very basic seven very basic standards under federal fair housing laws. There's a lot more out there about establishing basic access in multifamily buildings uh built after certain sets of years. I won't get into the details but the other option is where do we build projects that are de designed to house people with disabilities. So an example of that is you know group homes uh people with disabilities seeking to live together. This is a very common example um of an opportunity to allow a non-traditional a slightly non-traditional use of a home uh for a group that is living together and acting like a family to be able to live out in the community. familial status, those families with children. Again, that's questions about how many people can live together safely, how

many people can occupy a space together safely. Um, and also we see violations in who is defined to be a family um in in local ordinances and codes. Sometimes it doesn't align with the definition at the federal level. So, anytime we can find that proactively or it's brought to us, we've been able to do a little education and say, "Hey, we recommend getting this updated." Um sometimes we'll see limitations of uh blood, marriage and adoption. Well, families are formed in a lot of different ways and is it broad enough to encompass how families come together modern in modern life. So, uh those are opportunities that we've been able to kind of do some education and get the the correct definition on the books. I mentioned land use uh planning and zoning. I'll talk more about that, but it could be public services and infrastructure. Sure, if I have time, I'll talk about a case where a black neighborhood was denied use of public water for over 50 years. Um, code enforcement, is it being enforced equally across the board? The development of affordable housing. This can always uh raise questions about location of where that housing is and sometimes gets met with the nimism or not in my backyard attitude. Um, that I also have a little bit more information to share. Stay with me. We're doing all right. I warned you it was going to be a lot. So, couple practical examples. All right. Um, so this is a situation where the homebuilders association came to us in a bit of a panic because uh the township was considering um a building moratorium on ranches by levels and tri levels. Many of those which were in progress or planned. Um this is traditionally entry level housing for young people, families with children. It's very soughta for people also who are looking for um you know making minimal changes in order to access a home to live there um for the rest of their lives or if they have a current mobility disability. And so this was something after a little bit of conversation and some investigation, it

was it was pretty intentional to keep out people in those groups. And um when we kind of raised the uh fair housing laws and and had some conversation back and forth and advocated with the homebuilders, we were able to get this moratorum struck. Um and so the projects were able to be continued. But it was it was a little bit of some folks really not understanding that when they made it about those groups of people that they were intentionally closing the door to their community. Um, one of the questions that we were able to raise was, "So, you don't want your children and your grandchildren to have access to this community because that's part of this buying public that could be left behind by a decision like this?" Oh, no, that's not what we meant. But then we learned what they really meant. So, uh, porches. This was a an idea brought to us. I think uh it was a disability advocacy group was hearing about a requirement for um porches with stoops and stairs to be built on the front of every home in an entire subdivision. And um so we had some conversation with kind of all parties and kind of shared that that really makes it much more expensive to um make any entrance accessible, make it easier for anyone who would want to age in place there. Um, and it was it was a great conversation in the end. Um, because there were actually families with children who were like, I also don't want eight steps up to the front of my uh porch. And so, um, but the thinking had purely been about community, like if we have porches on the front of our homes, people will spend time out there and we'll build community. And so, I absolutely understand the thinking behind that. Um, I grew up in a neighborhood that was like that. And so I certainly understand the thinking behind that design, but you have to do kind of that full test of um who might be left out or um what barriers might we intentionally be creating. Um so for nimism um I mentioned that briefly. Couple of examples here. We had an elected official during a meeting such as this making very negative

comments. I didn't want to even recreate them about a proposed housing development for people with disabilities. Um they were really offensive and uninformed comments that were on the record. Uh the developer who's a nonprofit developer looped us into that conversation. We provided some education and um were able to help with that situation. Uh another one was a proposed expansion of a very large apartment complex. We're talking hundreds of units. They were going to build uh more and there was a lot of contention. There was a lot of um I think bad information being shared around. And so we came in and spoke just kind of like we are tonight about what the law is and what legitimate concerns can be raised in um in line with fair housing and where kind of the areas were that they uh could not consider in this type of proposed development. So that education and kind of that partnership I think has been uh helpful in these situations. For opposition to housing, you know, we see it a lot. It's all about who uh who's going to live there. And that can be used in a very promotional positive way of, you know, we know we're short in this community for housing for this group, but we often see it as a barrier for affordable housing, supportive housing, transitional housing, things like that, um can really raise some of these issues. So, anytime that sort of project is um happening, it we've seen it create challenges um that can violate fair housing laws or just promote challenges to moving the project forward. So, we're really um committed to trying to do that education as much as we can. We have a whole set of series and free training videos available on our website. We've created some new materials, some of which you've got in front of you now, to help educate both the housing industry, but also members of the community of, you know, what fair housing obligations and responsibilities are for both parties and what violations may look like to help people understand um and strike that balance. So oftentimes a lot of the concerns raised are not based in fact. And so it

can provide that avenue for housing discrimination. Um and so we really uh want to make sure that all of you understand those obligations and that you know that we're a resource uh so that we can help provide the education um andor the enforcement if need be to make sure that people aren't being excluded based on protected classes under the law. I'm moving a little bit quickly but I think I'm doing okay. Um, so when these decisions are based on who, and this is something that we've seen quite a bit of, one of the the fact sheets that we developed recently was kind of on the whole workforce housing idea. There's a big um push to house workers, and we absolutely understand that. We know there's a need that can be backed up with a lot of data and factual information, which is important, but we also want to make sure that there's consideration for people who are no longer working or who have a disability. And those again are protected uh groups under the fair housing laws. So we want to make sure that um that conversation is happening in an affirmative way. Uh so we encourage you know fears not to be a basis and we also want to make sure that any zoning ordinances any um uh revisions or updates are inclusive of fair housing language. That's something that we have assisted um municipal governments with before kind of looking at best practices or sharing language that we feel is in good compliance. Um we can't draft that but we can certainly review that and partner with you all. Um and then of course we would encourage that any ordinances be enforced equally and not against any particular members of any protected class. Um, sometimes, as I mentioned, we see some overtly biased statements and so, you know, that makes it a little bit easier to say, "Wait a minute, this might be a fair housing issue." And sometimes it's uh more coded or it's it's not as forthcoming. And so, we really want to make sure to watch um and check for that and see if we can provide that education um to make sure that people are um aware. You know, there are

fair concerns that people can have. There can be conversations of course about traffic and parking and infrastructure, whether it's there or it's proposed, um the project design, the costs, you know, those are all concerns that uh the community should and will be engaged in. But again, we want to make sure that it's not selectively raised or disproportionately influencing uh what happens or um the outcomes. So, there's all kinds of language that can be used uh as well to kind of I've got examples here. you know, neighbors may raise concerns even after the developer has tried to address them, even after information has been provided. So, at that point, it's important to really pay attention. Um, these concerns can delay or block projects. They can discourage other development. Um, and we certainly don't want to see that happen. So, that's why we kind of did a second series of this is what it looks like from the community side of how you can be uh supportive of of housing and understand what a government can and cannot do. for example. So, um they absolutely have the right to learn about new housing and they have the right to speak for or against it uh as residents and neighbors. They have the right to file lawsuits. Uh they don't have the right to block construction or trespass or uh try to halt the development of anything. Um so, you know, we're trying to kind of get that information out there to help folks understand. um there are so many costs and there's so many implications when discrimination interferes with housing development and housing choice. So um you know I think some of the hardest things are you know where we just so many communities are working so hard to make it easier to develop housing and we really want to uphold that and understand um that that's critical to moving the needle. So we don't want fair housing and housing discrimination to be a part of where that doesn't happen. um

it would um kind of perpetuate what we have which is you know leaving people out. So we don't want to see that. Okay. Um quickly zoning decisions should not be based on who right the residents or potential residents neighbors fears that the dwelling might be occupied by groups that are protected. um you can't um treat transitional housing, supportive housing, group homes, or any other group uh or any protection that's going to live in the housing any differently. Um and again, maintain that equal enforcement of any ordinances. Um and watching for a disproportionate harm to a protected class. So, is anybody going to be treated differently, uh left out? Is it going to be harder for them to access housing? If they are a protected class, let's do a risk analysis. let's figure out if there's a different way that we can achieve the end um and remove the risk of a fair housing violation. Those are conversations that we love to have on the early end. There are so many people having conversations about meeting different needs of different populations in the housing market. Um and it's we like to be involved as soon as possible so that we can kind of help provide guidance. So, this was a case I mentioned, but I I'm happy to send this information, but essentially um there was a a neighborhood that had been asking for more than 50 years through public meetings, had paid deposits, had been um advocating to get access to public water in Ohio. Um the water line on the map here is where the blue lines are. And the Cole Run neighborhood, you can see where the blue lines stop. all of the homes where all of the black residents lived were uh south there and there it was just there was no way the city could show that this wasn't intentionally discriminatory. So there's a great video and a great um uh series of maps to kind of show that case. If you're interested, I'd happy to share that with you. Um

okay, so I know that was a lot. We have a couple minutes for questions. So I will kind of turn the mics back over to anyone who has questions. Two questions. One, uh if there isn't uh explicit discriminatory statements, how can you uh prove uh discriminatory intent, especially in an area like this, which is a very competitive housing market where a house can go to somebody else for more?

It could be very challen like in a one-on-one sales situation, it can be very challenging. Um, we have an enforcement program. We have volunteers that we train to go out and kind of do a testing program for us. It's kind of like the secret shopping idea. So, for the transactions, we can kind of test the market that way. Um, it's very challenging though when things go very quickly, which still happens to be the case. Um, and so we've we've kind of developed our strategies to do the best we can to figure it out, but a lot of it kind of comes to people who know what's happening bring it to us, you know, and we do our best to investigate and or bring in a partner because I said we're not an enforcement authority, so we can't do the investigations ourselves, but we work with the Department of Civil Rights, we work the HUD, work with the courts, um, to do the best we can to establish investigate and establish what happened. So, are there other properties, you know, maybe that that real estate professional is listing and how are people being treated at those properties? There's some things that we can do. It can come down to somebody's word. So, yeah, it can be very challenging.

And something I've seen in other communities, largely college towns, is um regulations on how many non-related people can be in a single unit. Basically saying there might be a prohibition against discriminating against college students, but if you word it slightly differently, you can have something that has a disproportionate impact on a specific group.

Absolutely. Yeah. So, we've seen communities that had no more than four unrelated or uh no more than six unrelated individuals residing together. Those are pretty common. Those are not in the areas where students are protected. Um Ann Arbor, Ipsilani, East Lancing, they have students as protected groups. So it it's striking a balance between what existing ordinances there are. Um it may be age discrimination that we may be able to look at it. But if it's a uniform policy that's really looking at um the uh occupancy of how many people are living together and it's not going below kind of what would a reasonable occupancy standard would be. Typically with those types of ordinances, it's not going to be a fair housing issue. Thank you.

But we're happy to take a look at the unique facts because that matters. So yeah. Thank you. Thank you, Brian. Um, so regarding zoning, I can think of a couple projects um that were like multiple multiple family housing projects and it's often it's or it's not uncommon that there are concerns raised to neighbors about density of the project that's too dense for the neighborhood. Um, any project that's large is pretty common. Y can you give us some guidance on um in the cases I can think of we approved the project so it wasn't our concern but

if we did feel there was a density issue or how do we where do we draw that what's the guidance on drawing that line

that's a great question and I think we would kind of look at the you know the what's the need behind that project who how is it set up it's it's kind of hard to answer kind of hypotheticals but there's a few things that we would want to look at. Um, from a fair housing perspective, we don't want to see um, occupancy limits that are lower than what's allowed. And that's typically what people are looking for. So, you've heard the two people per bedroom kind of rule of thumb that's been in place for a long time. We don't build like that anymore. We have lofts and multilevels and uh, all kinds of different open spaces that actually allow for more occupancy, which probably raises a lot more of those questions. So from a fair housing standpoint, we would just want to see that it's not restricted that would get, you know, get the project in trouble from a fair housing perspective. Um, and that may be the argument to say, you know, we can't go lower than XYZ because of the square footage, because of the number of bedrooms. You know, there's a reasonable limit. We don't want overcrowding. You know, we don't want people um, you know, living in spaces that aren't meant for human habitation. And there's, you know, there's steps that we can take to make sure that the occupancy standards are reasonable, allow for larger families, multigenerational families. It's it's kind of hitting that balance. So, I think we would maybe be able to do some education, but it'd be helpful to, you know, if there's specific projects, we could look at the facts. So,

thank you. Yep. Great question. Other questions for Liz? I had a quick one and I know we do have an in-house attorney but since you're here um the you know you mentioned the different protected classes when we see things like um executive orders or other things being put out that sometimes target certain classes so it's coming from the federal level but as you pointed out we have certain protections locally. How does that work for superseding? So, if we say, you know, let's say a landlord wants to get some uh kick someone out based on uh sexual orientation, which is a protected one class here in Traverse City now

and in the state of that's true because of Elliot Larson expansion. Yes. But let's just, you know, I'm just using that at the top of the head, but the federal government is saying no, you can do that now. Where does that kind of how does that hash out? Usually, we are answering those questions literally day by day. And

sorry to sorry, it's fair. And we had that conversation before the meeting started too of you know we we want to look at everything that's current. Um we do have uh a national advocacy network looking at these questions under fair housing of you know what can we do and typically we're going to want to know same thing with the the question about occupancy like where are the funds coming from. It's it's part of that risk assessment. Um you know what can we point to or what you know uh what can we point to to rely on? Is that going to stand up to the executive order? Is there something else? Um, you know, we're we're literally working that out day by day and so we encourage those questions to come to us. We may not have the answers right away, but we're looking at that all the time.

Thank you for that answer as you're in the midst of fighting it. Other questions from anyone. Okay. Well, thank you so much, Liz. And I know you'll be around uh later just in case till the till we send you back to Grand Rapids. And then I think

we'll have Tony come up now. Yeah. Thank you. Uh it's good to see so many people that I know. And for those of you who don't know me, my name is Tony Lenty. I'm the chief housing investment officer at MISTA. That is uh a position. I have three divisions that report to me. rental development, which is largecale development, all our tax credit programs and some of our newer programs. Neighborhood development, which is our um my neighborhood CDBG division, much smaller scale projects. And then asset management. So, anything that has uh Misha has an interest in through loans or uh grants um goes to asset management and that also reports to me. I used to work here in the city. I still live here. Um, this is my home. And uh, when I told my family I was going to go to the state about two and a half years ago, they said, "What's going to be different about that job?" And I said, "Well, I used to get yelled at locally. Now I get yelled at statewide, and that's about it." But uh I I exaggerate slightly, but a lot of people still uh you know try to make their case and it's nice when a a friendly face does show up to uh argue with me about some something. Right, John?

That's right. Um but I'm glad to be here and I'm always willing to help um uh you guys as you u try to figure out, you know, direction planning and figure out what the state's going to do and how you can align your goals with our goals. So always happy to be here. Uh you know in 2024 we had a a great year for investment in housing. It was most productive year ever. Uh we put out 2 uh two almost 2.2 billion. In 23 we did 1.2 billion and then 2022 we did 756 million. Part of that acceleration was some of the federal stimulus money that was flowing through the state. Um and even here we were able to get a lot of um extra projects done. We're still working through that. Um so in 2024 we had about 12,000 uh 425 units and as you can see from this slide uh you we broke it down by home ownership, multif family rental. Our missing middle housing program which was a lot of interest had $110 million. We did 50 projects, a couple in the northwest part of the state and created about 1,400 almost 1500 new homes. Uh we still uh MISTA is a public housing authority uh in itself in of itself and we have about almost 31,000 vouchers that we have out on the street around the state of Michigan. Uh we also uh created in 2024 our tax uh increment financing for housing program or housing tiff um that was passed um and during that summer and we got it out and uh moving. We have 38 plans that we have approved. These are brownfield plans that just do housing um so far. We're about ready to do 39 of 40 very soon. Um we have a you know a housing crisis. You all know that, you feel it here, but

across the state, it's anywhere you go, it's really no different. It might have a different cause and effects from various uh issues in in different parts of the state, but largely it's the same way. I just wanted to read a couple of facts to you um just to refresh, you know, why we do at Michigan, what we what we work on and what drives us. Um, in 1991 the median age for first-time home buyers was 28 and now it's 38 and that's according to the National Association of Realtors. In 1981 the median house the median age of all home buyers was 36. Today it's 56. In Michigan over half of renters spend over a third of their income on housing. And um between 2012 and 2022 uh the average home price uh doubled. They increased 100%. while our income increased only about 40%. You know, these are unsustainable positions that we hold in this state. We're trying to work on policies and programs to correct that, but it is uh getting more and more dire every day. And this last stat is one that I think you might appreciate and is really starting to be a bigger concern for us and we're starting to address this on a statewide level. But 53% of all our homes in Michigan are over 50 years old. Uh my home that I have here in Traverse City uh was built in the 60s. So it is right there at that 50-year mark and it it is a chore to maintain. You know, imagine you're on a fixed or limited income and you know, something major happens that can really, you know, reverse your e economic well-being. you know, if you have to put an emergency roof on or or water heater or air conditioning furnace or something that effect, um 50 year old home stock is uh a problem and we're going to try to do some things uh about that. We have a statewide housing plan and uh

your region, I think it's region D, is that correct? Is that what this region is? 10 counties uh largely mirrors Housing North's uh uh footprint as well. Uh it was a five-year goal to uh produce or preserve 75,000 housing units. We increased that by order of the governor in May of 2024 to 115,000. You can find it there, but that's been our direction going forward. Um quarterly progress reports are on that website, so you can check out how your region is doing and how we're responding to the regional needs. We have programs in place that respond to each and every region in the state of Michigan. These are the housing partners. You can see I guess I should have gone to the next slide and see D right there. Um D and E is is the north part of the state. They're very different from each other. Uh you know D is highly competitive in all the resources we put out um to this region. E still has uh money left in their in their region. So you can tell that even though we're trying to have a response to every to every region, they respond back to us very differently. It's like who has the capacity to build, who has the markets to build and and what have you. But uh we divided the UP up into three different division uh divisions or regions and that's helped out quite a bit as well. So they used to fight over one pot of money and I think that from those of you who care about rural issues, this was a positive response from Misha to do that. Um, I'm going to go over a couple of resources because that's what I was asked to do, but I'll be happy to answer any questions about just about anything um that's mission related. My neighborhood is something we we did in response to uh the statewide housing plan and uh it it's a low barrier common application. So, we have a lot of new developers coming to that uh to that program. we see two million or less investments in each of the deals and sometimes even smaller. Sometimes people

are doing two, three homes and doing their own um renovations on the on a portfolio of rental homes that they own. Um and we think it's been rather successful. Since April 1st, 2024, uh we put 120 million into the program and uh we are seeing a lot of those come online. Now, it's open to local governments as well as for-profit and nonprofit developers. So, keep that in mind. Employer assisted housing fund. This was actually announced here in this community by the governor um about a year ago. We have it, you know, in play. Um what what drove us to do this is hearing from all the HR directors around the state who, you know, would jokingly say, "I went to college to be human a human resource professional. I can't believe I have to check, you know, rental ads every day. That's my job. But they did not study that in school, obviously. Um, you Michigan is adding just one new home for every 14 new jobs that we've created in this state. And we are um uh one of the worst cases in this stat across the country. Uh so we knew we had some work to do to try to match where housing is and where jobs are going. Uh the new $10 million pilot fund uh is a dollar for-dollar match to employers to do uh work in this area. We thought there would be a number of developers who or employers who would work with developers to build housing, but we're seeing much more program related activity. The one uh successful application from this region was Mson Hospital and they are doing a a rental assistance program for I newly minted nurses to move to this region um and help them uh afford their local rents um and I think they're going to have a two-year program. They're still working out the details, but uh they're going to get their grant

agreement very soon and hopefully start uh working on this. Um Mr. housing must remain affordable for at least 10 years and for sale housing must be uh if you're actually building it for sale housing for 5 years. Uh employers can contribute cash cash equivalents or land or land equivalents to the deal and we will match it up to $2 million for development 500,000 for a program housing tiff is uh been much more successful than we ever thought. We we hurried through um and got this program up and running pretty quickly after this governor signed the law and then it just sat there for a while and no one came forward. Then it just kind of rolled in uh very quickly. I think people were waiting for one to go through and then um it got denied. It was wrong. So then we uh quickly got it, you know, resubmitted and we we we don't have a lot of problems with people submitting their um applications to us anymore once they learned what this was all about. Um it's a new funding stream to subsidize development. Uh and it goes up to 120% of area median income. Uh it is for uh rental housing or forale housing. Um it it just depends on, you know, what you want to do, but the rental development does generate more tiff dollars than forale housing. Uh we do have technical assistance if you have questions about that. And um we do have a $20 million loan fund that was approved by our board when we uh rolled out this program. What we're trying to do, the TIFF revenue stream is assignable and uh if you borrow against that uh you assign that to us um for a period of time to pay it back. Uh we're trying to prove the market on this. previous uh lending institutions who've uh operated in this area have largely I believe done it as a courtesy um product to their long-term uh customers the

developers and they were offering like 50 cents on the dollar. We are at 75 80 cents on the dollar which is generating more money. We're trying to demonstrate this is a s this is a safe uh investment. the uh as you can imagine um for those of you who know how housing works um it is there is a veil you know like year 15 through year 20 where you don't know what your property is going to be like how much money are you going to need to uh reinvest in it you know whatever it might be upgrade refresh um and uh you can you can understand why some lenders don't want to you know count on taxes paid to be uh the revenue to pay back a loan. So, uh, we think it's still a safe investment. Uh, so we're trying to help with that whole conversation and we hope to see some financial institutions following our suit and, um, getting into that market and offering something, you know, 70 to 80 cents on the dollar. Uh, for those things, I would say that one thing you do have to be tied to a local plan, housing plan, uh, when you do apply for a housing tip. That is one thing we did put into the that we did put into the rules. Um, and that's not hard to do in in regions like this where you have so many plans in place. You just have to be able to tie uh to one of these plans. Uh, we do now after our board meeting last month into August, middle of August, have the accelerator fund. Um, you know, this is a a housing finance program that's going to take a me we're putting a mezzanine layer into the capital stack that'll come out after five years. Um by doing that you don't have to borrow as much under construction uh during the construction time which is the cheaper money. Uh that's some of the most expensive money you can um borrow. And then uh MISTA is taken out by a long-term uh patient uh um lender. Uh we have a partner lined up

to do that. Um we do think what's interesting about this is that um we're going to have a new class of developers, you know, who were more interested in like our missing middle programs who are coming here. They were doing almost market rate, but we're offering them, you know, if they're doing like I think the example I used in the um board meeting was 190 unit and we are basically investing in this deal to make it happen. Our money does make the whole proformer work. In exchange for that, we're getting about 60 62 units of affordable housing at 60 to 80%. Um, even though it's a 120% or above market rate kind of projects, that is equivalent to one 9% tax credit deal. So, we almost get a whole other tax credit deal by doing one of these deals. And the community will get some affordability. they often get a deal moving that wasn't moving because of uh a number of different um you know factors and market pressures that kept it on the shelf. Uh here's a just a simple uh market rate um public development than the traditional affordable. What we're doing is um jumping into that revolving loan fund part and uh replacing you know higher cost debt and some of the other state programs. We see this as not competing with our state programs. We see it as uh totally different. So, we can do more new deals with this. Uh we have four deals that we think will be uh going through this pilot program and the first one might be at our board next month. Um but we'll have to wait and see. A couple of them want to close by end of the year. We'll see how that's going to work. This is starting to be a trend nationally and uh I just got off the phone this afternoon uh with Oregon Housing Authority and they are trying to do a program like this, but you need to get like a a pot of money 20 to $30 million to start it. Uh we were in a good position to launch that, but we're still trying to raise some dollars to

make this uh a much bigger robust program. Um what's next for us? We keep asking the legislature for more dollars. Uh, believe it or not, Mista didn't receive a lot of state dollars until like five years ago. The Michigan Housing Community Development Fund um about 50 million a year. That is state money. That's how we do the My Neighborhood program and some other things. But um we also want to see some more flexibility uh in these in these funds so that we can go up to the 120% um AMI marker. We you know have a number of programs and a lot of money of that um 2.1 2.2 2 billion in 24. You know, I would say, you know, 90% went to affordable, extremely low income, low income, affordable housing, 60% uh and below. We're just trying to get some flexibility to do a few more units at that 120% um because we do think there's a a need there. Um we are about to update the statewide housing plan, the five-year uh five uh plan. So, keep uh your ears open for that. you want to participate in your local conversations uh when that starts to happen. Uh we do have this data source if you want to use our data portal. I I wanted to promote that a little bit. So check that out and see what's you know going on here and around the state. Um it just launched um over the summer. Questions, comments? Do you expect me to come with bags of money?

Well, well, no. Sorry. We're keeping it to the commission up here right now and then we'll have public comment later. So catch me later, John. Yeah. And you Yeah, John, I'm not worried about you having access to Tony. Any other any questions from up here? All right. I think we all we know how to find you, Tony, but we'll also find you to ask more questions in the future. Thank you. So now we'll have uh Sarah Lucas join us with the I'm excited to hear more about the Office of Rural Prosperity. So take it away.

Hi everyone. I'm Sarah Lucas. I'm the director of the Michigan Office of Rural Prosperity, but um like Tony, I know many of you from previous incarnations and work with the city. So, it's nice to be able to talk with you about uh the Office of Real Prosperity and share a little bit about our programs. Um I don't have bags of money. I'll say that right off the top. Um but I we do have some programs that um directly impact housing uh in in Traverse City and elsewhere in the state. So, I'll I'll go through those quickly. Um, for those of you who aren't f aren't familiar, um, the office of rural prosperity is uh about a three-year-old office. The governor created it about three years ago um to act as a liazison between rural communities and state government as well as other partners like federal agencies and philanthropy and universities. So um I started about three years ago. Um for those of you who don't know me, I'm a planner by training and have worked in this region and in the upper peninsula for um the last 25 years prim entirely with rural communities um on on planning and economic development issues, particularly housing. And um so when this office was created um it was uh just one person. Now it's eight people. And um we we work really hard to stay engaged with rural communities so that we can advocate for their needs within state government and um uh with other partners. We um engage really extensively across the state. We have events. We go to meetings like this. Um we go to meetings like the one that I just left in Kasca and um talk with communities about what they're experiencing and what their their needs are. Um far and away housing is like Tony said the um number one issue that communities are grappling with. It's a really complex issue. There's never enough resources, takes a lot of expertise, and it takes a lot of time. And so, um, we often work with communities through some of those problems. And I'll talk a little bit about how, uh, later on. Um, but we also, um, uh, act as kind of a navigator. Um, in addition to that

advocacy and liaison role, we try to connect communities with resources. So, while we don't have a large budget, we do work with um, agencies across state government and in federal government. And when we're familiar with programs, we're able to connect communities um effectively. So, uh we have um we're sort of a cross- sector agency uh with a lot of really strong relationships both within government and with communities themselves. So, uh are always happy to talk with communities about um what they're what they're seeing and experiencing and try to help them through some of their challenges. Uh so uh when we um first kind of set out to develop programming for the office uh there was a really big mandate to address issues like housing and infrastructure, transportation, broadband. Um but without a big budget, we had to really work to understand where we could provide the most value. And um it really didn't matter where we went um in the state or what the issue was that communities were talking about. We found really consistently that they were struggling with issues related to capacity. And um that's a word that I use a lot. It doesn't always mean anything to uh people um or it means everything um all at once. So we try to break it down a little bit. Um and I'll I'll tell kind of how we came into this is um you know a few years ago uh as the office was getting started there was a lot of um uh new stimulus funding available to communities and a lot of frustration on the part of rural communities that they weren't ready to access it. They didn't have projects lined up. Um they didn't have grant writers. They weren't sure what they were eligible for. And that really boiled down to, you know, not really having a strong plan or enough staff or um procedures in place that allowed them to be competitive when developing projects and applying for funding. And so we we really tried to focus on those gaps in capacity that communities were

experiencing to try to help them get ready for building new housing and addressing their infrastructure challenges. And what we have found is that um there are some like what we're calling building blocks for communities to be ready for this kind of um success. And it starts with having the right data um understanding the community's needs, having a vision for what the community wants, and having a solid plan for how to get there. And um I'll talk I'll talk more about that later on, but we have seen time and time again that a lot of communities see a housing need and they understand that the solution is housing and so they try right away to build housing. But if they don't have a strong um you know market study, if they don't have a plan for the community, if the community isn't behind it, it can be really difficult to get that project um moving forward. So we really we really try to emphasize that the communities that are successful in developing housing or addressing other challenges are the ones that are planning and collaborating with partners. And that last part is uh again really critical and I'll talk a little bit more about that. Um the other big piece that is missing in a lot of uh rural communities um in terms of addressing things like housing is having adequate staff and um uh I guess I would say trained staff um with access to the expertise that is needed to make these projects happen. Traverse City is really fortunate that you have you have a strong planning um uh legacy, you have strong planning staff and um have done a lot of the community conversations that need to happen in order to move these projects forward. But a lot of communities just don't have any paid staff. They have, you know, a part-time clerk or supervisor or whatever. And it's it's hard to do everything all at once. So, a lot of what we get help, we get requests for help um from communities who don't have any any planning staff at all. Um so, that that piece has been really important. We also talk a lot about leadership and governance. Having those

procedures in place that help you move through some of these really um sometimes difficult conversations uh with the community requires uh a lot of skill and training and expertise as well as um procedures and um and finally uh community engagement and again collaboration are really critical uh components of any successful project development whether it's housing or anything else. you need to understand again where the community is on the issue and be um having those conversations regularly to talk through um the challenges and the process and um like with Liz's training, you know, what some of the the laws are uh governing governing the the process. Um so we we talk about um capacity. We um try to put our um money where our mouths are on capacity. Our we have a a small grant program. It's called the real readiness grant program where we provide funding to help communities actually develop some of those solutions so that they can be ready for for housing projects moving forward. Not just housing. Um we really uh we the the the grant program is really flexible. Um we have funded projects um many projects related to housing but also behavioral health and emergency response and um transportation and infrastructure and everything else. And the reason is that we know that communities understand uh where they need to invest to build up that readiness. And so um we try to keep that program flexible. We have um we provide about we provide $50,000 up to $50,000 for taxexempt entities in rural communities. And um that covers uh costs related to planning, capacity building, and partnership development. So, if you're, you know, bringing a consultant on or a new staff person to help guide some of these projects, that would be considered capacity building. Um, if you're convening partners and developing projects in collaboration with partners, that would be partnership development. And, um, if you're planning, that's

pretty self-explanatory. Um, but we have funded projects in this area in the Trevor City area, a number of them related to housing. Um, one of our grantees is in the room here. Homestretch has been a really successful, um, grantee. We talk about them all the time. Um, uh, the Triber City School District, um, and Interlockin are another, um, great example. And, um, we, um, we point to these projects often because that small amount of funding that we provided acted as a catalyst that has, um, brought a a great deal of additional investment into the community. So really try to emphasize that these these are small grants but they're very impactful and um we really see the results uh a couple years down the road. Um so that's our grant program. Again it's a very small one. Um uh we had $1.5 million to grant last year. Uh we're not sure if we'll have uh funding next year and I'll talk a little bit about that moving forward. But um I know that one question is going to be whether Traverse City is considered rural and um it depends on the definition. Um there are many many definitions of rural and um our approach to it is if you are serving um communities that are designated as rural, you can apply for our grant dollars. Um and if you are considered rural by any state or federal definition, we will consider you eligible for our programs. So Traverse City is in the mix on that. Um, so because we don't have a lot of of dollars to grant, we have another program called the rural readiness network where we provide direct assistance to communities for things like partnership development and collaboration and early phase planning. We work with um regions across the state um really kind of focused on um developing coordination and um uh collaborative solutions to challenges like housing. So Tony talked a little

bit about the differences between regions D and E and um a lot of that again um comes down to having the plans in place, the capacity there um uh to to prepare for housing development in northeast lower Michigan. It's um it's much less populated. There's a lot less capacity, a lot less planning. And so we're in more engaged in Northeast Michigan in terms of just helping them coordinate um with partners and identify identify more structural solutions there to some of those capacity issues. Um but we work in Southwest Michigan and the UP and the thumb um trying to help them uh work through similar similar challenges um in those regions. I'm not going to take a lot more time. I just have a couple more slides and just want to share a little bit about um some of the impacts that we've seen in the few years that the office has been around. Um we have um uh received additional funding from outside of the state to conduct some of our work um particularly the work related to the rural readiness network where we're providing direct support to communities um through partners like uh resource rural which is a national nonprofit and um USDA rural development um really they both really recognize the need for rural capacities to build up or rural communities to build up that capacity and um we we also uh like to talk about the return on investment from our small grant program. Um so for every dollar that we've awarded for capacity building projects in rural communities, there's been an additional $12 that's been invested in rural areas. So um to date there's been we have we've been um administering these grants for about a year and a half and have invested uh less than $2 million and have seen $22 million invested in rural communities as a direct result of those those grants. Um so it really demonstrates the power

of those small catalytic uh grant awards um uh for those foundational activities like planning and capacity building. Um and then we we also want to really emphasize that we are um statewide and um we are we have um our our hands all over the state. we are um the next couple months particularly in the thumb and in southwest Michigan and in the UP and in northeast lower Michigan and have developed some really uh great relationships across the state with those rural communities and um I have to tell you that you know they often ask for examples of what has worked in other communities and um I uh find myself coming back to some of the work that has happened here in Traverse City very often um because you have been having these conversations ations here in the city for much longer than other parts of the state. Some of that is by necessity. Um I always used to say Trevor cities like Canary and the coal mine on housing issues. It hit here harder um uh and earlier than many other parts of the state. And so the community has been engaged much longer on some of these solutions. And so you have a lot more experience to draw from and so we are we are taking advantage of that and sharing those uh success stories across Michigan. Um but we um are um here uh primarily as a resource and are happy to work with um with the city. Um we're happy to see uh the city engaged in these kinds of conversations and looking for opportunities to partner with neighboring communities because again we really do think that that's critical to success in any of these um challenges that rural communities are experiencing. And we are always trying to find ways to uh sort of develop that collaboration. And um I mentioned of events that that we host and we coordinate. Uh right now we are in the thick of some local events, regional events that we are coordinating in partnership with the

Grand Traverse uh regional community foundation and interlocking public radio. Um we're hosting a series of events around rural readiness and resiliency. I just left one in Kasca. There's one in Benzonia tomorrow and on Wednesday there's a half-day event at the Hagerty Center here in town where we're talking about trends that are impacting rural Michigan and how communities can uh be be proactive in terms of planning and responding to some of those big changes to things like population and our economy and land use patterns. So, um if you haven't signed up, um I have the information here online. Um, housing is always a part of those conversations about readiness and resiliency. It's a foundational part of the the community's uh, prosperity long term. And so, we're always um, we're always uh, integrating housing into all of our conversations. So, I will um, stop here. Um, happy to answer any questions you might have and um, again, we're here as a resource and so always feel free to reach out with any questions that we might be able to help with. Do we have any questions for Sarah right now?

Okay, looks like you're off the hook. Thank you, Sarah. Thank you. Excellent presentation on our relatively new office. So, I appreciate that. Next, we'll have Susan Lighhouser come up, please. Good evening, everybody. Can you hear me? Okay.

Okay, great. Well, I am excited to talk with you about property tax abatements. Just what you want to hear u at this time of evening, I'm sure. And um so specific so I'm Susan Lighhouser with Housing North and I'm going to be talking about neighborhood enterprise zones um and it's one type of tax abatement and it's a type of tax abatement that can be used for owner occupied properties whereas um Lauren will be talking about um some types of abatements that can be used for rental or tenant occupied properties. Um just a bit about housing north. Um we uh our mission is to build awareness, influence policy, and expand capacity so that communities can create housing solutions that meet their unique needs. And again, my role is housing ready tech support. So I get to talk about wonky stuff like tax abatements. Um something important to know about tax abatements is um there various types can be used in the same area. So for instance the same um ne abatements are uh districtbased as our attainable and residential facilities are districtbased. They can be the same district they can be different districts depends on what the priority is for the the particular geographic area uh to be addressed. Um neighborhood enterprise zones are not new. They have been around since 1992. Um, so there's a lot of precedent. I can point you to a lot of examples and kind of help you identify, you know, if you want to consider this type of abasement abatement. How would you use it? Where would you use it? What would you consider in establishing a district? The new piece actually um is for nonopra qualified u municipalities. So I will breeze over

that, but uh whoops. Um, I will primarily focus on the NEZ rehab and NEZ new abatements because Traverse City is an OPRA qualified uh, municipality. So, um, this type of tax abatement came about in 1992 with public act 147. Just and this is just to give context. I won't give too big a history lesson, but it was um approved in conjunction with public act 146, which is the obsolete properties rehabilitation act. And that provides a clue as to what the intent of these types of abatements were or are uh is to revitalize uh obsolete or blighted properties. You might also think about just underutilized properties. Um so the recent amendment um kind of expands the program so that nonopra qualified communities can also use um kind of a different twist on the abatement which would be for um rental properties. So accomplishes a similar thing as to the attainable uh housing and residential facilities. So again, we'll just breeze over that a bit because it doesn't apply to Traverse City, but um NEZ rehab is suitable for owner occupied or rental housing and it is used to incentivize adaptive reuse andor rehabilitation of blighted or obsolete properties. So, if you think about a school building that's no longer used, a municipal building that's no longer used, uh an apartment building that has a boiler system and is in disrepair, um um a fun fact about me, I uh lived for a long time in a former aspirin factory and I still occasionally office

in a former fire department maintenance headquarters. So, that gives you a sense of the type of properties that might benefit. Um both have been converted to well a mix of residential and office. Um the tax calculations differ. Um the reason uh again this gets a little wonky but u maybe it goes without saying but I'm going to say it anyway. U property taxes are a function of two variables. We have the millage rate and we have the taxable value. The way the NEZ rehab works, if I was a developer and I came to and I said, "This old school building, I would like to develop it into rental or I'm want to develop it into condos." Um, the taxable value, the pre-improvement taxable value is essentially frozen for the term of this abatement, which is six to 15 years. So, the owner occupants would benefit from that abatement. um the NEZ new um abatement. Again, it could be one district, maybe next to that, maybe you can split off a couple of parcels from that blighted or obsolete property and entice a developer to build some single family homes there. Um they could benefit from the NEZ new abatement. It works a little differently. Taxable value, no impact. So, if it's a $400,000 home, it's approximately a $200,000 taxable value, but the millage rate that applies is um one half of the state average millage rate. So, that's going to be about 19 mills. And um again, it works. So, that is very similar to the uh residential facilities and attainable housing abatement that uh Lauren will be discussing. An easy workforce. Again, unfortunately, not for Traverse City, but that's okay because we have some other tools.

Um and the amendment uh I'm going backward uh oh okay great thank you um process again this has been around for a long time so the process is well established there's a ton of precedent uh there's a lot of guidance at the state level um you'll see the abbreviation LGU that's government local governmental unit that's you um is responsible ible for designating the zone. Developers seeking a tax abatement must submit their application prior to obtaining construction permits. That's important as far as the timing, otherwise the state may reject it. Um, approval of the application is required from both the local governmental unit and the state treasury. The assessor's office must implement a system to monitor tax billing and ensure compliance. Compliance is actually only at the front end. There is no ongoing annual compliance requirement, but still it being out of process for assessor's offices who have not done it before, there would need to be a process established there. Um the boundaries of any Zzones or other types of of tax abatement zones um could be established in response to a specific request from a developer or the bodies here might say, "Boy, we this area of the city needs some help. It's going through a transition. The housing stock is very old. The commercial property is very old and obsolete." Um again there the purpose is really to renovate rehab um adapt um properties. So uh in determining the boundary you might consider the location of any blighted obsolete or underutilized properties that might have include even

include some big underutilized parking lots. Um for any rehab the current value must be pretty low. So, a developer can't just say, "Hey, I want to put a new roof on my property and get this type of abatement." Um, the current value must be less than $120,000 per unit, which for this market's pretty low. Um, there is no limit on the number of zones, but the total NEZ designated area may not exceed 15% of the city's total acreage. Um, zones can be revised over years as uh needs and conditions change. Um clearly there's a benefit to property owners within the zone. What sometimes gets controversial is someone who's just outside the zone may feel that the zone has been drawn in an inequitable way and that is the challenge of being in government right. Um some examples, the um maple maple block uh in Traverse City uh I believe that that is an adaptive reuse that is using an NEZ rehab abatement. Um Cadillac lofts I believe used any either NEZ new or NE workforce or possibly both. Um this example is from Detroit. That's my That's one of my old house. And this was this is the large ass. This was actually the Park Davis facility. So, it was a quite a large complex of brick buildings that had, you know, were vacant for many years. And um another thing that possibly goes without saying, but I'm going to say it anyway. It's typically more expensive to adapt and reuse a property than it is to go to a green field and build um build housing there. Um so another example uh so an NE rehab whoops

old school uh converted to residential loft. Um a little nuance the tax on land cannot be abated. This kind gets into how the this is implemented. Um, so an owner of a an easy abated property is going to receive two tax bills. One represents the land, the other represents the improvements. Uh, another example, this is an example of an NEZ new um new construction property on um it's kind of sandwiched between a expressway and a commercial strip. Um, so the incentive again the the owners, the the resident is going to be the one benefiting from this and they might not ordinarily be willing to pay what it costs the builder the developer to build. So the um that tax abatement reduces their operating costs once they're in the house, but it also kind of incentivizes those buyers to pay a price that the developer needs to incentivize them to build. Um, and then their operating costs are lower. And that is all I have for any tax abatements. And I would be thrilled to answer any questions or talk with about you uh about tax abatements with you over coffee. So feel free to throw questions at me. Does anybody have some less caffeinated questions right now? Thank you for having the link to the big dis uh 689 page document showing all of the examples, but do you know off the top of your head any um cases of nonopra communities in Northern Michigan that have taken advantage?

So the so that would be the NE workforce that the nonopra properties can use. Um I think you may be aware Frankfurt has used a lot of these different tools. I know that they have used residential facilities and attainable. I'm not sure whether they used workforce. They kind they to me they do the same things. There are some nuances as to how the large the district needs to be or but um all three of those types uh are for rental properties that are income controlled. Yes. Thank you. Any other questions? I I have a question.

Um, so I I'm just thinking about some of the um programs and resources that the county has. We are our our brownfield authority has a revolving loan fund. And and and I'm also thinking about a project that was um that's underway in East Bay, the Crimson Project. similar kind of um scenario to maybe using an NEZ in in Traverse City. Uh could that be paired with, you know, maybe like a a grant or loan through our brownfield authority or sort of layering these tools together to create affordable housing options?

Great question. Um, so important to remember that there's uh there's actually no income qualifier for this, but you might need a little incentive for buyers to buy next to an income controlled building. Um, so uh it certainly could be layered um in a number of different ways. Uh it certainly could be layered with some grant funding. Yes. Especially if it's brownfield, maybe there's something that is not um super desirable. yet. So, the goal is to make it desirable. Um, yeah, I don't see any reason why it couldn't be layered with with grants or loans from the Brownfield Authority. Great. Good question.

Thank you. All right. Any other questions at this time? Yeah, go ahead. Oh, wait. There's one over there from Sarah. You show Could you go to your slide where you show the different programs? I know Lauren's going to be talking about the other two, but to build off Maxwell's question about stacking Oh, yeah. financing, which we know is necessary for a lot. You had a good slide in there about how these different programs apply to different scales and how they can be stacked.

So, yeah. So, this last um segment here, which was NEZ, attainable, and residential. I mean, most neighborhoods, right, they have some some rental and some owner occupied. So, you could certainly do a zone if you were to target a zone that you wanted to revitalize. Um, you could certainly have uh one zone that encompassed all three of these. Does that help? Yeah. And

Sure. And then, you know, depending on the charact you know, there different grant programs have different requirements. There there's I don't know of any reason why they there couldn't be a number of things combined. All right. Thank you.

Thank you Susan. Great introduction. And for our final presentation, we will bring up Lauren Trevol out known face up here uh to talk about the smaller scale of things. Here we go. Good evening everybody. Um Lauren Trible. I'm the city attorney. Um and uh the planning director asked me to tag team on this and talk about two um newish acts that came down in um 2022 uh in the same package with the new pilot um for housing that we've utilized in Traverse City that you know well um and that is the attainable and the residential housing districts. So, um I know I'm the only thing standing between you and the rest of your Monday evening. So, I'm just going to kind of breeze through these um just so that you know what they accomplish and sort of what the process would be to put them in place. And then, um if you're interested in implementing these, which is really the feedback that I think I want to hear and staff wants to hear, then we can work together to bring back that process to you um and walk you through it so we can implement some of these. That's what you want to do. Um so, these were two new statutes. Um the only real difference between them is that attainable housing is for up to four units and the residential housing is for more than four units and I never can remember the difference. So um they should have named them something more uh specific so I could remember it more easily. Um so these are for only for rentals. It's not for uh uh owner occupied and um there has to be an income qualification. Um and then what the result is is that the um the rent cannot be more than 30% of adjusted household income which is a defined term in both of the acts. So there's some math involved to to come up with um what

is the the household income under the acts and then the 30% applies to that. Um it's a pretty straightforward process to implement these. Uh the steps are not anything that um you would be unfamiliar with. um we'd have to uh let the county know what we were up to um and have a public hearing so that the public is aware. And then um the city commission would adopt a resolution um to establish the housing district. So there is sort of a you know a bubble that you pick um and like Susan indicated, it could be um an area of the city that you think is um under underserved or uh it could be some other reason and and we could talk that through. Um, and then once you adopt that resolution, you provide it to the county and so that they know where the housing district is located. Um, and then there's some back and forth between different departments sort of communication between the clerk and the assessor. Um, you get public notice again and then you have another public hearing um on the district. Um and then once uh that has been approved um then the state tax commission is notified um that that has has occurred and um if whether it is approved or disapproved you have to provide the reasons for that decision. So the end result of all of this once you've uh established the boundaries of the district is that there can be upon application a 50% reduction in the property taxes for that particular property that's being leased to income qualified folks um based on their adjusted household income and uh that can go for up to 12 years um and uh it provides options for folks up to 120% AMI. So, um it's not really a super complicated process. Um so, but if if

it's something the commission and the planning commission is interested in, then uh I'll work with staff and we'll put the time and effort into bring that back to you and get that process going. Um but other than that, I don't have anything else unless there's questions. Commissioner Stanley.

So, um, looking at this and maybe this is the same process for pilots, but, um, so I'm just curious if the tax abatement is for 12 years and it for for a families up earning up to 120% AMI, who is responsible then for ensuring compliance with that over the course of those 12 years? uh we work with the assessor and um the state tax commission to make sure that we have the the right um uh process in place to ensure that that's going on. And the statute also provides for uh you know what happens if somebody moves in at a certain household income and then things change for them. Um you know that's all addressed in the statute as well. So that would be monitored to make sure.

Thank you. Any other questions? I have one. So my mind and I might have this might be outlined somewhere else that I've forgotten. Um in my mind I'm thinking of if we did this in an area would this apply is it proportional to property for rental? So like someone built an ADU with the intention of renting to teachers for example who might meet this 120 AMI. Would that be applicable to that portion of the property? Because I know that changes the if you add do an addition like that it changes the taxable value. um would that be proportional in that way or does it have to be an entire lot and building?

That's a great question and I think that I would um have to work with the assessor on that because there are different things that she can do to um you know split the property into different sections for the rental and so forth and then to make sure um with the tax commission that that is something that they're aware of. And those are great questions. I don't know the answers to but I can I can get them. Okay, other questions. Go ahead, Anna. Oh, and then Anna, then Heather. Sorry, just Anna then Heather. Sorry, you both put your hands up at the same time. I just order.

Is this typically done like by way of district or smaller than a a zoning district? Like I'm trying to envision it on a map. And I don't know how you do that without like spot zoning or kind of getting into that realm. Um, it's not zoning, so it wouldn't it wouldn't be spot zoning. Um, but I I understand what you're talking about. Um, I I don't know if there's a way to say what's typically done. Um, the only one I'm aware of that's been done is Frankfurt. Um, so that would be a good resource to reach out to, I think, and understand what their process was like. Um, but I I wouldn't be worried about sort of the spot zoning aspect of it.

So, we would basically we could be consulted, but the this would entirely originate and be withheld by the city commission. Corre correct. It's a city it's a commissionbased process. Yep. Okay. And my question was basically the same as how do you my question was basically the same as Anna's. How do you define a district? Is it one lot? Is it a whole lot etc etc.

Yeah. Right. That's the conversation that you the commission would have to you know delve into where they think it's appropriate where it's needed. Well, it's a question I have for a lot of the programs that have been presented tonight, and that is, you know, is it does the city should the city be initiating these, recruiting applicants, looking for places, um, or is it something that you just try to advertise that it's out there and available, and bring your stuff to us? And there's a lot of expertise in here and I'm sure there's a lot of people who have seen how it works. I'm not looking for an answer tonight, but I think it'd be good feedback to get uh you know going forward.

Go ahead, Tim. Yeah, also not looking for an answer tonight, but if you delve into this more and are bringing information back, if you could provide even just a summary like side by side of like why one of these programs instead of the pilot or why the pilots like advantages and disadvantages of the different options.

You're writing if if I if I can add a little context. So in Frankfurt, I'm pretty sure that they designated the entire city as an attainable housing district. So the only ones who benefit is someone who's building a new rental unit and is willing to income control that unit and do the annual compliance. So if the if a goal is to incentivize more people to and I will tell you as you know small investor like I can't build something and rent it at you know at a attainable price because my costs are just too high between the construction and the taxes. So, uh, as much as I'd like I work for housing, I work for housing ever advocacy organization. So, um, so that might be something to consider is, you know, if if that is a goal and you want the market to, you know, the small investor, the homeowner to solve this problem, you know, you not everyone's going to do it. Not everyone's going to do it, but that would be a way to reduce those operating costs in the first 6 to 12 years of operation. And then it goes to, you know, then the taxes revert to just being regular market rate. Um, I feel like there's another question I

um just a question for Lauren really quick and then kind of help direct the body here. Um, Lauren, is this the only one that is strictly with the city commission? Everything else would have to or could or should originate with the planning commission as we would move it through the system. And I'm saying this for input. this is the only one that's city commission exclusive. I would pull my commissioners right now and see where they're at and then open up the broader conversation about all the other tools we were just presented on. But if there's other ones, then, you know, I'd be curious. Well, there's a whole lot, you know, to be to be honest, there's so much that was covered that I'm not an expert in. Okay. I would defer to the other speakers if they

well since we know this one for sure. I guess my question my commissioners the city commissioners would be I've heard some questions about you know how does this stack up against pilot some interest would we like to instruct Lauren as staff to look into what the rules you know kind of essentially what the rules would be for us to do this in Trevor City what that might look like compared to other programs so we can have a further discussion of this later and continue to to work on that process. Is that kind of head nods or nose or any? I'm seeing head nod, head nod, head nod, head nod, head nod. Okay. What's the consequence of 50% loss of um

that would definitely be part of the conversation. Yes. So, um so Lauren, we'll kind of give you that general direction of kind of going to see what that might look like for us. What it, you know, Frankfurt did citywide. If we what it would look like if we did by neighborhoods, what does that look like to lose 50%. Could it be Parson or poor? I can't talk tonight. sorry, portioned out on parcels if it was a like an ADU with next to an a permanent dwelling. So, just some of that information to bring back to us and um we will continue that part of the discussion at the city commission level. And now seeing that yeses, I'm going to just go ahead and say that to you and give you that staff to try and bring you back something you can have a deeper conversation about.

Great. Thank you. And then everybody else, I'm now opening up the floor. We've had a couple of tools presented to us. One of the goals of having this conversation together was to find out what the interest is between both the planning commission and the city commission in these tools and exploring more. These are not this is not a commitment. This is not a guarantee to anybody who might be interested in these fundings that we would eventually offer them. It would be what are we interested in having learning more about and having discussions about how it might fit into the city. And so if anybody feels very passionate, uh, jump ahead or I might just start pulling people yes or nos or anything. Or are we all slightly brainwashed and need to think about this a little more? Go ahead, Brian.

I mean, there's a lot of programs presented very quickly. So, I mean, and it's a lot to take in. Um, I really think it's, you know, it's a question of again going back and asking, you know, some of the presenters tonight. Uh, I mean, some programs are ultra cons, you know, competitive. You know, we've seen I know that, you know, the city has seen projects take years to get funding or approval. I don't know if there's other projects that are out there that are a little less tapped or a little less unknown. Um, I don't know if there's anything that's not ultra competitive when it comes to getting, you know, funding for housing. uh you know but it's really I think it's just a question of figuring out how not just us but also our surrounding community

can actually target and recruit and maybe advance some of these because it's and I'm not on the commission anymore so I've been away from it a while but my feeling was always that except for limited number of projects it's always someone bringing something to us and I don't know if there's an advantage in us trying to go out and be more aggressive. Uh and I aggressive is the wrong um proactive.

Yeah, just yeah, just uh being more active, you know, and trying to attract different investment from different sectors. So, but that's a question I think you're going to have to have, you know, uh it's not going to get answered here tonight, but it's one worth pursuing for sure. Go ahead.

Yeah. Going off of that and putting on my planning commissioner hat, though behind this desk today, I'm wearing both. Um, I see it as a chance to learn about the tools so that if a development project comes forward and a developer is thinking about using something, then we know what they're talking about, but also it is an opportunity for us to be more educated going forward. Uh if we had some portion of town that was going to be significantly redeveloped, like we had a former large factory that closed and was now abandoned and had reverted to city ownership, then it would be certainly worth uh seeing how we wanted to use planning, zoning, various economic development tools to turn that from an abandoned tissue paper plant like they had in Shabboan and redevelop that to housing to commercial to other uses that served our community. Uh we've seen some redevelopment certain parts of town. We have three development districts uh created in our planning map for three distinct parts of town that had been former industrial sites of one form or another that then got redeveloped to Midtown condos or to um new development along 8th Street here or in the warehouse district. But we don't really have a large um brownfield site equivalent to that at present. That doesn't mean something might not merge in the future. And if I look at um say our corridor plans and what the uh planning commission has in its future, if we're talking about

rebuilding the 14th Street road in 2028 and looking at what we want that corridor to look and feel like, there could be opportunities along that area if we're saying, "Hey, this is a major corridor. We are rebuilding it. How do we want to ma match what the local residents and the city as a whole wants along that area? Other Go ahead, Jackie.

Um I I would be very interested in um hearing more from Sarah Lucas. Um, you know, we've talked earlier today about um regional collaboration and it seems as though perhaps her office might be able to provide resources or guidance on how we could establish regional collaborations on housing. So, um I' I'd like to have more conversation about that. That's great. Great. We can uh definitely put out as part of the kind of what Brian marked on too as well like asking for some feedback later of analyzing that through Trevor City and opening that conversation more. That is a very good one. Um go ahead Anna.

I feel like it's been I mean I've been on the planning commission for years now and I hear what Brian is saying and maybe it's time to try something new. Um we are always receiving projects. There are lots of underutilized properties. Well, not lots, there are some um remaining. There are some lots there like parking lots. There are some just vacant holes in the ground. there are places that we could become a little creative with and maybe those are the spaces that we put nez um where they're already sitting um empty and underutilized and I just think that is a way to try to create some sustainable growth um that we have some input over if we don't if we entirely let the market decide I'm I'm pretty jaded at this point. Um I believe that it'll continue to just be investment opportunities and we'll continue to see short-term rentals uh saturate the market. So like where do we try to combat parts of that? Um and some of these tools are a few of those options I believe.

Go ahead, Maxwell.

Yeah, I I would just say having this discussion about some of these uh these incentives are it is a really great conversation and thinking about uh what some of the the townships are doing. Um thinking about East Bay uh township, they have a a project going through approval utilizing both Brownfield TIFF and a PA uh 237 abatement. Um and so a lot of these s incentives can can work in concert with one another, you know, and every project is is different. Uh another project that comes to mind that uh they are utilizing uh LITC. No, I'm sorry. It's a they have a pilot and um looking at utilizing uh funds from uh the Brownfield revolving loan fund potentially to support that project. So I guess keeping in mind that the if the goal is attainable affordable housing, a lot of these things may have to work in conjunction with each other to to realize that goal within the community. So

excellent point. I would say I would add to this I I appreciate both um Brian and Anna's perspectives of you know kind of the experts or the people who want to develop or have identified the property can know you know are the ones that want to do the leg work of figuring out how all the pieces will fit together to Anna's point that hasn't always yielded us um you know it's a it's a burden to put on to uh somebody who's trying to develop housing in an area where we desperately need housing. I think what I'm things I'm appreciating about this conversation which isn't giving much direction but I'm just putting it out there is in the past we I remember a few years ago we had some a developer come and propose an NEZ to us in an area that still has not been developed and it was um kind of every time that I think the importance of this conversation is to say that every time a developer does come to us with something like this or some other um idea a plan that fits into some of these components there has been a tendency to vilify as this is just for a developer's personal gain or this is for profit and that is a balance we have to strike when these come before us but I think what we have to talk about part of this conversation and part of the continuing conversations from this will be you know is that at the end of the day what we have to do to not have a hole in the ground is get a portion of affordable housing included with something that might give a bit of a tax break to a $500,000 condo and at the end of the day that will be the body's decisions to decide that that is an absolute no-go or that's a trade-off we're willing to or and that's an example that's not that's off the top of my head that is not a hard example I want to clarify um and so that I think this helps to put into context some of these tools that we have intended to get presented to us in the past as part of a presentation by a developer or by a group that had a special interest versus having a kind of a broader knowledge of what is available for us and um I so I appreciate this conversation I know there will be other conversations both at both levels both

as options might be brought to us and potentially as we have kind of more exploration as people get coffee with people like Susan or have a chat with Tony that these might open up some more conversations and more ideas stirring. Um, but that was the intention of this was to really have a literal study session where we all got to study together, get the information together and kind of start on the same page. So I I guess with that I want to take a moment and open up to public comment and then I will definitely come back after public comment for more for more comment from the boards. But I just wanted to give everybody a minute to digest too and think about that question a little bit more. So with that I will open up public comment and Sarah does have a mic to read the rules.

Oh no you gave me a mic. We ask that you state your name and address. Indicate if you are a city resident, non- city resident and or city business owner. We have a threeminut time allotment per speaker. When your time has elapsed, the timer will beep, which is my laptop. And finally, we request that all language be respectful to all parties.

So, at this time, anybody who'd like to make a comment on any of these items about the housing discussion in general or anything else. John, I see you're sitting there, but you were asking questions in the middle of it. It can be questions, too, that we will try to find the answers to after afterwards. We don't do an exchange of ideas during public comment. You get your three minutes and then we can answer if we have the answer on site right now. But as this is a much larger conversation, it also would be something we could kind of file away and have staff follow up on. So, John, thank you for taking the bait.

And I don't need the whole three minutes. I guarantee you. Um, I just had some questions when Tony was speaking. He mentioned all those great grant programs and what Misha is doing, but throughout the whole thing, I didn't hear anything about home funds. And we've got projects in Traverse City that have benefited from home funds. The first one I did on a street was 900,000 in home funds and 300,000 in tax exempt bond financing. I mean, what a beautiful, you know, thing to have. It's so six units, but we have five, four units at 60% AMI, two units at 50. That's powerful. So, I don't know if he's going to interact, but I can talk

later. And then um NEZ's I think are the spot-on idea. The depot neighborhood comes to mind that came and went. Where are the rest of NEZ's? Um maybe any vacant city-owned property should be automatically an NEZ zone and come and get it. Just a thought. And then blending. You're talking about tiffs. We're talking about pilots. But you put the two together, you know, if you give us a 0% pilot, there's no extra tax revenue coming off the property, right? But you give us a four or a six, well, I would take that 4% or 6% and apply it to a tiff and put those two together. So, just some thoughts. Maybe that'll get some responses. Thank you very much.

Thank you, John. Any other public comment at this time? And you did stay under the time, so well done. Go ahead, Susan.

Susan Lighouser Ye again. And um um I just I just wanted to give a little context on the attainable housing that um that Lauren presented. So um a key differentiator is that the between the pilot that has been widely used and that's great and you've gotten some great results with multif family, you know, larger multif family projects. the small the homeowner who wants to add one unit cannot use that program because the compliance costs that third-party compliance and the required audit is cost prohibitive for that homeowner who's doing one unit attainable housing my hope would be that there could be a a simple lowcost annual compliance um method uh developed that would be within the control of the um the commissions on staff um so that could be right now There's nothing for that homeowner that wants to do one unit or two units or three units. So, attainable housing would be the one. Thank you. Any other public comment? Okay. Thank you for that. And then I'll bring it back. We've all chewed on it. We've heard. Yes. Any more comments, please?

This one. So, the attainable housing district could be for a a residential homeowner who wants to add an ADU. Well, go for it. Yeah. My on top of that, my thought was, what if it's a really, really large house that is becoming too much upkeep for a single person and they want to split it into a duplex or a triplex. Would that that would qualify as well? That Lauren's nodding her head from her seat, but now she has more. I wasn't going to make you get up, but you have more to say. It's up to four units, and then the other one is more than four units. Okay, great. Could be six.

Yeah. Or it could be a duplex with an ADU or a triplex in an ADU. Yeah, we're hearing a lot. Oh, sorry. I kind of closed down public comment, but then there was kind of a blur. So, I'll go ahead and let But did you? Yeah, you can. I'll go ahead and let you go. We're kind 1125 Hannah Avenue. City resident, city employee, city commission candidate. Um, I just wanted to ask quick question about the ADU and I guess we'll use this format for it. Is utilizing AHD only for specific occupations discrimination? Like if you

if if I said I want to build this for you know single people or cor direct the comments to the commission because we'll have somebody come up at the end and we'll have people answer questions at the end both from the commission and from anything brought up during public comment.

I guess as a general question then is is utilizing it with specific intention for specific types of people discrimination in nature. So that would be a question for our fair housing people. Um, is the tax abatement for the AHD only in effect when it's occupied by someone? So, if we're we have a citywide AHD um zone for ADUs, do I have to have somebody occupying it to get the 50% or is an opportunity for me to get a 50% tax abatement on the square footage above my garage because the ADU is there? So,

that's just kind of one of those questions. And does it open somebody up for the ability to use like a housing voucher? And do I have to let someone use a housing voucher if it's there and it's getting the tax abatement? Thank you.

Thank you. All right. I'll do a last call for public comment since we bent the rules a little there. Anybody else want to make any public comment? And can it can be questions that we will add to the the list of the laundry list that we're sending to staff right now. Okay, seeing none, public comment is officially closed. Um, Heather added a great question there. We've got some other questions um especially towards um really quickly before I have our um housing authority answer that last question. Some questions about the uses of or the ADUs and how that qualifies. Are there other questions up here? Go ahead, Tim. Yeah, to add on to my earlier question for the city attorney based on the comments that Susan just made as far as the essentially the annual costs. So wondering under the city's pilot policy because we had discussions about this previously that I think in theory it could be applied to a single rental unit but the cost to administer it might be so prohibitive. So as you put together pros and cons, that's a huge thing to understand like what it what it is. So maybe how many units then

uh disperses that cost and it becomes less cost prohibitive. Thanks. Great. Any other questions or requests? I just want to know from staff, what do you need from us tonight?

Really have her answer the question. This is a good starting point is this discussion first. We wanted to inform you about these tools and make sure that both bodies were fully aware of that. But then just some direction. I know I'm hearing a lot of questions which is great. We know direction starts at a starting point and sometimes you need more information. That's fantastic. I think there are opportunities for both bodies to play a role in this. After all, the planning commission is the the body tasked by the state to examine land use issues and make recommendations. So three of these tools today do require a district which is related to land use and where you want to see more housing. That's an opportunity where the planning commission could use their expertise to make a recommendation of where these tools could be used once identified by the city commission which ones they would or could potentially support. As Amy said, no commitments are made today. We don't know until a final vote is there what direction things will go. But I have heard from planning commissioners too. There hasn't been a lot of direction except we want more housing. And so we all know that we need more housing, but how do we want to address that? And of course, we have to act within the rules of fair housing, within the tools enabled to us from the state, within the funding that our partners can provide and stuff. So, as we've heard today, it's it's complex, right? It takes a lot of layering. Um, one thing I would recommend, I mean, I will say, let me back up. Susan has hosted a couple ADU panel discussions in the community that I've been part of, and we've heard this a lot, that we have residents who want to be part of the solution. They would love to build an ADU. They could probably swing the ADU. it's the taxes for the rest of their life that's going to hurt them. So, if we can help soften that, we can help open the door. So, we're not just using public tax money all the time. We are allowing people to invest in their community and be part of their future. And there are concerns about, you know, what's that tax education going to be. I'm glad that we're asking that and we should think about that with pilots too as we hand them out long term. But I would say from what we're hearing as far as the attainable facilities, so that's a small scale for less, most of this would be materialized on new construction that people are wanting to build if they can get over that tax barrier. So it's not

really a reduction in taxes. It's just not as big of an increase as you might see. But that's that trade-off, right? At the same time, it's not taking us any public money to build that housing. You know, we're not having to invest in it. So those are some of the things that we're um looking for today. just kind of getting that direction so that we know what to start pulling together and we're not just spinning our wheels, but we want to be efficient with this. We know the community need is strong and we just appreciate the discussion. So, so Sean, just to clarify, you're looking for direction from the city commission on which of these tools the planning commission should explore further beyond what they've indicated regarding the attainable housing piece. Great.

Yep. Yep. So, you know, I I'd like to go to that question. I think Brian was discussing and Anna hit on a little bit too. There's different ways you can approach this, right? You can wait and ask for developers, I will tell you or wait for developers to ask you to implement the tools or you can take a different approach and be proactive and signal to the developers where you want that kind of stuff. From my experience, they respond better to the ladder because time is money and they like a predictable process. So, if they know that's already in place, they'll start to pursue that because they are looking for those tools. I'll be honest, there's really not much money to be made in building housing. That's why we're seeing it struggle so much as Susan mentioned and stuff like that. The cost of labor and lumber is just getting really really hard out there. So, um, every little bit helps. There is no magic panacea that'll fix it, but that's where we're kind of going.

Great. With that, does anybody now have something they want to explore? Do I have other? Yeah, I would start with the uh attainable housing district, residential housing, because it's it's um really made for people who already live here who may want to stay in their homes.

Um the NEZ is a great idea, but that seems like it's something that it either originates from a grand idea from the planning commission about like 14th Street or from a developer. So, I I kind of wait and see on that one, but I would get started at least answering these questions because the burden on the um tax department might be huge as uh Commissioner Warner pointed out all these individual individuals with these different tax statements coming out. So to clarify, we did already instruct and just because we've had big discussion now, we did already instruct Lauren to look in more into the attainable housing and residential housing and what that might um require and bring that back to us. So that is in process as of right now. So these other ones I think it's coming down to a philosophical discussion and and maybe this is one that we revisit or if people have want to weigh in right now with a quick take you know do we want to have the planning commission start looking at areas that maybe it is 14th street could be identified for some some of these and explore what might fit for them or is this some is it more kind of as it was discussed that the developers what's ava what's actually available and what's out there. So Brian, you've got your hand up though.

Yeah. So, you've got me thinking now and some what some of people have said is um and we may not be able to like pick an NEZ, you know, uh neighborhood enterprise zone, but you know, I guess for myself and the planning commission, I'd like to know if there's any of this stuff the, you know, the city commission is like we don't want to do that because part of it is also having the process in place for when people come to you so they know what to expect instead of trying to build a process around a project

and so they know that you know maybe somebody says yeah we've got an NEZ program process ordinance whatever we need and you could put it here we would like to put it here and then we can look and say it fits there or no it doesn't because it doesn't meet these most likely it's going to be half of one you know six of the other

I Just want to if I may jump in and just say I really support that comment and Mr. Winter said that it does it's more compelling for developers uh those that would build housing to know exactly what's available to them and for the city to have a package like an application package orformational materials that make it really clear on what to expect regarding the process. So um I would strongly encourage uh us being proactive in that regard if that's one way to put it. Um, you could develop like a messaging tool, like a simple one-pager that kind of

instructs people how and how they can build their ADUs or how they what what all is going to be involved if they decide they want to increase the housing need or the h housing supply because Sean mentioned that at some of the listening sessions they're getting those kinds of questions. So then we could have like a city sponsored messaging that kind of helps with that. Yeah.

I'm not hearing a request to really explore uh anything at this point beyond the attainable housing facilities act. Correct. That's go ahead.

I I will not be here after. And also I I guess I'm knowing that we've had a request for an NEZ come before the city commission and there is that reactivity to a developer coming and asking for a tax abatement. Uh what the harm would be in exploring what it could look like and where those could go so that to your point that they're being direct that developers are directed to if you want this incentive. This is where we envision them fitting our city as we are looking to develop these corridors and areas.

Yeah. Going off of that, when we had the NEZ discussion, it was a new tool for this body and it was a lot of staff time to figure out how well it could potentially work. If we can maybe not do a comprehensive search of the entire city but identify some areas where it is much more workable then that staff time is already done or both us and it is easier for the developer. This is where I would go though and say to Commissioner Stanley's point about her remaining time on the commission and a couple of others that what happened when the NEZ came back to us though I remember that conversation was also though NEZ at the time and maybe there's been changes wasn't limited to only attainable or to only affordable housing rates and so the issue also in the push back there was that it was seen as giving a development or a discount or a an abatement to how it was presented to market rate housing. And so I think that that is where we can say here's what here's where we'd love to see it, but the the seven people that will be up here in a couple of month in two months are going to ultimately decide if that's their finger to the wind of of what they want to instruct staff on. We could instruct staff for the next month. They could come back in six weeks, eight weeks and present to a different potentially different very different commission and get a very different response. That's my hesitation on the NEZ exploration or picking up property right now. Um, not that we shouldn't have a more clear I mean I appreciate that having all of this before us and so I guess I would ask Susan right now you know if that what the NEZ is for the the one that qualifies for us. Sorry I'm going back because there's the new in there but yeah can you can you approach the mic? Yeah, that is now limited then to within that range, right, of there there's a there's a cap and there's a

there's a requirement to to the tax abatement specifically. Correct. Truly, you can establish the district anywhere you'd like, but I think the best use uh or the uh where and where I've seen it used is if there's a property that's been vacant for a long time, it's because the developer can't make the numbers work to turn it into something productive. I think that's where you would want to look to to utilize the NEZ rehab in particular. And I guess NEZ new just it's new construction but it would go alongside like why has that property been vacant? It's because it the numbers don't work without for the depot neighborhood here in Trevor City.

Yes. So no I I Yes. Thank you for that clarifying point. I guess that's where

Go ahead Tim. Yeah. Well, it ties back, I think, or at least in my mind, to Commissioner Stanley's comment and how it there were too many concerns when the developer brought the NE to us before. So, at the same time that maybe somebody is identifying a vacant property, I like what Susan's saying, there should be thought put into it before there's a developer as to what will be asked of the developer to show that the benefit of the NE ne in dollars didn't just go in the developer's pocket. Like could they show without an NE this is how it pencils out and with the NEZ this is how it pencils out and just show yeah maybe they they've got some skin in the game too. It's not just the NEZ. Um you know if they say they make they like to make 25% on whatever they do. So they make 25% without the NE but now they can make 25% on this vacant property that's been sitting there because there's the NEZ. Mhm.

But maybe for us and the public, they need to be making I'll make up a number 20%. On this for a body to say, "Okay, we'll talk about it more." So that's the request you would have to bring back for a conversation that that broader, not those exact numbers. Yeah. for people to consider that aspect so that a future commission isn't in the same position where a developer comes forward even if the city's identified the property and then it's like oh no we don't want to be just giving money to a developer. So what can the developer say that convinces a body and the public that we're not just giving money to a developer?

Okay. So is that something Go ahead Jackie. Um, just a reminder that I think Commissioner Warernner had asked for a summary of each of the tools with pros, cons, and implications. That would be for me a very appropriate next step and would be helpful for the people who are sitting here now as well as people who will be sitting here in November. Um, so maybe that's a a good use of staff time to give us a a highle summary. That seems like a good request for across the board. Great. Go ahead, Sean.

Yeah, I just wanted to add one thing as we're kind of talking about that. You know, the attainable housing and the residential housing can be applied broadly to like an entire city and stuff like that. The NEZ has to be more targeted. It can't exceed 15%. But in today's first city commission study session, there was a lot of discussion about utilizing soft power to influence and things like that. NEZs are a great tool for that. put the incentives in place in the targeted properties where you don't want them to stay a dusty parking lot into the next generation. As Susan had pointed out, a lot of times they're there just because they can't make the numbers work and if the tools aren't there to for them to consider when they're running their proforma, they're probably not going to get to that solution. So just kind of keep that in mind that you can be very targeted with nes more so than some of these other tools that you talked about.

Great. Good point. So I think the next request that I think that seems to be fail meeting the consensus is a staff procon and numbers rough numbers to each of these tools to see what that would look like in application here. I think that can be shared both at the planning commission and city commission level for each body to have that information. Yes. Yeah. Any other requests at this time? Okay, seeing none, I'm going to now well I'll ask well we've we've asked twice now if staff what staff needs I think we've given it.

So I will now open for general public comment. This can be about anything. It does not have to be about housing or any of these tools.

Does anybody want to make any general public comment? So, I just wanted to say, you know, developers have reasons for developing, right? They want to make a profit. They want to they want 25 30%. That's why some of these don't work. You have a nonprofit here in Traverse City. It's called Homestretch. If you have a project, come to your local nonprofit. As long as we get our salaries paid and our office is in the building, we'll help you put a project together like Lotto and I just can't say enough. Come to us or, you know, use us the best that you can.

All right. Thanks. Thanks, John. Any other general public comment? Okay, I'll bring it back to the body then. And that's all she wrote for tonight with our joint session. So the meeting is adjourned and have a good night everybody.