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West Michigan cities weigh policy changes to bolster affordable housing

BY Sunday, October 25, 2020 06:20pm

West Michigan cities are examining new policies to expand affordable housing and create a supportive environment for developers as studies show an ongoing need for more units.

The renewed discussions this year among city officials in Grand Rapids, Holland, Kalamazoo and Grand Haven come as the COVID-19 pandemic has driven high unemployment and financial strain, raising concern among officials who say it could exacerbate the need for affordable housing.

Cities are attacking the problem in a variety of ways, including revamping outdated zoning codes to make it easier for developers to include affordability in housing developments, as well as prioritizing affordable or mixed-use housing for incentive tools such as brownfield credits. 

Despite the effort being made to add more housing stock at varying price points, housing advocates and local planners are still confronting a stigma associated with — and community opposition to — such housing, including high-density rentals.

The Lansing-based Michigan Municipal League has stepped in to help local governments solve their housing puzzle. The MML plans to issue guidance in early 2021 on code reform that can help increase affordable housing units.

That includes incentivizing affordable housing developers through tools like brownfield credits, streamlining zoning codes and a refined application process. 

“What happens is you have developers sinking a lot of money into the process and it makes it harder for them to build housing developments affordably,” said MML Policy Research Director Shanna Draheim. 

Meanwhile, studies continue to show a need for affordable housing throughout the region. A recent Housing Next study shows at least 5,340 more rental units and 3,548 more owner-occupied units are needed in the next five years in Grand Rapids to meet housing demand. Housing North, a nonprofit that spans 10 counties in the northwestern Lower Peninsula, showed last year the region would need about 15,000 housing units in the next five years, mostly in rental units. 

Incremental zoning changes 

The Grand Haven City Council will hold a Nov. 2 public hearing on proposed ordinance changes that would support affordable housing.

“We’re trying to do small, incremental changes,” said Jennifer Howland, Grand Haven community development manager and director of zoning and planning. 

The proposed changes would allow for accessory dwelling units, reducing minimum square footage for dwellings and more multi-family homes.

While community concerns include the potential effect on historic homes, Howland said the zoning changes are geared toward increasing units in existing homes as opposed to new construction.

“We definitely have a need for a variety of housing options at all price points,” Howland said. “We’ve got a higher demand than we’ve got supply. We’re hoping this will offer more housing for young professionals and people who went to school here and want to come back and settle down.”

Policy changes Grand Rapids made this year include permitting duplexes on corner lots by right, said Grand Rapids Planning Director Kristin Turkelson. 

Future affordable housing policy changes are expected as part of the city’s updated master plan. The city plans to issue an RFP for the master plan process this winter and start the public feedback process in the summer, Turkelson said. 

That process will likely include questions about whether affordable housing should be concentrated around transit lines or dispersed among neighborhoods, Turkelson said, adding that minimum lot size requirements are a recurring barrier for housing developers.

“Developers are having to acquire multiple parcels to get a parcel big enough to do a multi-family development,” she said. “When we look at construction and land costs, the simple math doesn’t make sense for the new units to be affordable.”

The city is also considering allowing ground floor residential in traditional business districts, which isn’t currently allowed. The change will be considered at a Nov. 12 public hearing.

Asking voters, scoring projects

The Kalamazoo area is taking yet another approach to its affordable housing shortage. On Nov. 3, Kalamazoo County voters will be asked to extend and expand a millage that would provide rental subsidies and permanent housing.

The proposed eight-year millage extension would increase from .1 mills to .75 mills, raising an estimated $6.4 million in the first calendar year. Since the original millage passed in 2015, more than 500 families have reportedly found housing assistance, while city officials say the housing need has grown significantly over the past five years.

The Kalamazoo Community Foundation also recently launched a loan program to support a range of projects including those that focus on housing equity. The foundation hopes to issue a minimum of $2 million in loans a year. 

In Holland, the city is considering incentives for affordable housing developments as well as a complete overhaul of its form based code. 

The Holland City Council voted Oct. 21 to approve a Housing Development Support Policy designed to facilitate the strategic use of local economic and community development tools and incentivize housing projects at all price points. 

The policy includes a “housing scorecard” that clearly lays out development characteristics the city seeks for projects. The city would then award incentives including brownfield financing, creating a neighborhood enterprise zone, and community development block grants. Offering a percentage of affordable units, incorporating amenities for residents and proximity to public transportation are included in the assessment tool. 

In addition to the new housing policy, Holland has been going through a years-long effort to put all of its developmental laws into one unified development ordinance, which could lead to more affordable housing, said Holland Senior Planner Jenna Elswick. 

The ordinance — which includes proposed changes involving duplexes in residential zones and lot size requirements — is expected to be voted on in March.

Overcoming stigma

Amid these planning efforts, cities continue to face local opposition to affordable housing development.

“Some communities don’t know how impactful some of these changes could be,” Draheim said. “There are also certainly places in Michigan where there is a resistance to building more housing, more multifamily housing, and affordable projects. There are all sorts of historic stigma around that.”

Draheim added that Michigan in general hasn’t moved fast enough to bolster its affordable housing stock, noting that policy changes don’t have to be a multi-year process.

“A big wholesale revamping of your entire zoning code can be a long process,” she said. “But some of the smaller steps that link incentives or zoning changes to reduce lot size requirements or parking can be completed in a few meetings.”

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