HOLLAND — Faced with a shortage of housing for people at various income levels, community leaders in Michigan’s fastest-growing county are exploring new ways to develop residential units.
The Housing Next Leadership Council aims to address fundamental issues such as zoning and land-use policies and bring in $100,000 annually in grant money for each of the next five years to address the chronic housing shortages. The move comes at a critical time for Ottawa County, where statistics show that more than 35 percent of residents are “over-burdened” by housing costs.
The number of families in Ottawa County paying more than 35 percent of their income for housing has more than doubled in the last two years, according to Mike Goorhouse, president of the Community Foundation of the Holland/Zeeland Area and the co-chair of the Housing Next Leadership Council.
Representatives from groups including Lakeshore Advantage, Greater Ottawa County United Way and the Michigan West Coast Chamber of Commerce are involved in the council.
Together, the stakeholders hope to take a “yes in my backyard” approach when it comes to the development of new housing in growing areas such as Holland, Zeeland, Grand Haven and Spring Lake and surrounding townships.
“We want more units in our community,” Goorhouse said, adding that current projections peg the region at about 15,000 units short of the current housing demand. “If we can increase supply of all these types of housing units, that will inherently lower the cost for people. It’s a much bigger-picture goal than what your typical affordable housing conversation is. We’re really trying to work on system-level stuff.”
Goorhouse noted that even adding just 2,000 housing units near employment centers over the next five years could significantly relieve housing pressures in the area.
Ultimately, Goorhouse says it’s important to remember that the issue of affordable housing affects a wide group of people throughout Ottawa County.
“The average family is spending too much of their income on housing. When that starts happening, other things start to get lost,” Goorhouse said. “Financial stability is the crux of this and we don’t want more people being unstable financially purely because of housing prices. That leads to other problems.”
A BUSINESS ISSUE
The housing shortages and rising prices in Ottawa County mirror the current situation in other parts of West Michigan, but they also show the lakeshore area has in many ways become a victim of its own success, according to Goorhouse and others contacted for this report.
A September Business Intelligence Report by Lakeshore Advantage found that 75 percent of the region’s companies plan to expand in the next three years, compared to 50 percent throughout the broader Midwest.
Given those growth projections, lakeshore companies remain skeptical of their ability to find enough skilled workers to meet the demand, particularly given the region’s housing market, said Jennifer Owens, president of Lakeshore Advantage.
“Access to talent is kind of the one thing that’s holding back the economy from continuing to boom,” Owens said. “Many employers are looking to relocate individuals from outside the region or having employees move closer to them. Currently, they’re finding there’s little to no available housing options.”
In the short term, the Housing Next group plans to hire a full-time director to begin engaging various municipalities around the idea of tweaking zoning and land-use policies. The group also wants to explore how new policies might better encourage more dense, mixed-use development and housing types such as rowhouses and townhomes.
THE RIGHT MIX
With a median income of about $59,000 per year for its residents, Ottawa County could struggle to attract enough housing at a range of price points, according to Goorhouse.
Federal Low Income Housing Tax Credits (LIHTC) are only available for those earning between 30 percent and 60 percent of Area Median Income (AMI), meaning that many in the region make too much to qualify for those units.
While acknowledging the need for more subsidized units, Goorhouse said the council will also seek to target options for those making between 60 percent and 120 percent of AMI, a type of housing commonly known as “workforce housing.”
Those units often tend to be in scarce supply for middle class wage earners.
It’s a challenge that many growing municipalities around Michigan are facing, according to Earl Poleski, executive director of the Michigan State Housing Development Authority (MSHDA), the state agency tasked with housing issues as well as administering the federal LIHTC program.
“We’ve actually been charged by the governor to see that more (workforce housing) occurs because in many parts of the state, you’ve got businesses coming in where employees make decent income, but not huge incomes,” Poleski said. “(Municipalities) have to get the basics of it and then we can come in along with (partners such as the Michigan Economic Development Corp.) and figure out how to make it practical.”
AN ‘INSURMOUNTABLE’ PROBLEM
Aside from working with municipalities around land-use and zoning policies to encourage developers to build more residences, the Housing Next council aims to maximize density and launch incentives to help mitigate costs for private-sector developers and general contractors, Goorhouse said.
Much of the impetus for the Housing Next initiative came from the Community Foundation’s recently completed “Today. Tomorrow. Forever.” campaign, which finished a year ahead of schedule and generated an immediate $5 million in unrestricted funds and a pipeline of $30 million.
The foundation identified housing as a key community priority after it analyzed data that showed how many Ottawa County residents were dedicating a substantial portion of their income to their residences.
Max Benedict, a principal with Grand Rapids-based Third Coast Development LLC, welcomes the Housing Next council’s multi-faceted approach to housing development. Benedict’s firm has numerous LIHTC projects currently in its development pipeline. Additionally, the executive sits on a committee assembled by Grand Rapids Mayor Rosalynn Bliss that’s tasked with establishing an affordable housing trust fund.
“I like the ‘build, baby’ approach,” Benedict said of the Housing Next initiative. “That’s free market 101. In Grand Rapids, we’ve had that approach for the last five years and we’re only now seeing a leveling off in regards to market-rate residential (development).”
Nonetheless, Benedict and others in the real estate industry note that addressing the housing shortage will require a full-on blitz by myriad community partners using a wide variety of tools.
“It’s ultimately using all the tools at your disposal to solve this almost insurmountable problem,” Benedict said. “It’s such a massive problem, it’s hard to understand the gravity until you start trying to pull all the levers and realizing the small effects that each one ultimately has.”