Zoning People In, Not Out
How local governments can encourage more affordable housing
August 16, 2006 | By Carolyn Kelly
Great Lakes Bulletin News Service
Local governments can facilitate more affordable housing by, among other things, allowing “granny flats” like this one in Traverse City.
TRAVERSE CITY—Sally Bornschein, former president of the Home Builders Association of the Grand Traverse Area Inc., has been watching home prices rise faster than middle-class incomes since the early 1990s. It might surprise some people to hear that, despite her industry affiliation and the larger profits higher home prices bring, Ms. Bornschein thinks that is bad news.
“Affordable housing is one of our biggest problems,” she told an audience of citizens and civic and business leaders at a May 18 community meeting previewing a new effort to better plan growth and transportation for the Grand Traverse region. Ms. Bornschein told audience members, who gathered at the Hagerty Center to find out more about the upcoming Land Use and Transportation Study, that the region must fully address its affordable housing problem as it continues its rapid growth.
So far, that hasn’t happened, despite efforts by local nonprofit groups and charities to build more housing that working families can afford. The problem, housing advocates say, is simply too large for such groups to handle on their own. According to the 2003 Housing Needs Assessment, by 2010 as many as 44,400 families here will be earning less than 80 percent of the area median income, making them textbook candidates for affordable housing. The study, which was conducted by the Community Research Group, called for 6,500 new affordable homes by 2010.
Such goals, affordable housing experts say, cannot be attained without government action. Those experts also point out that there are many tools available to local governments that significantly improve the housing situation but cost very little.
Most important, they say, is changing local zoning codes that currently require large homes or lot sizes, policies that severely limit the availability of much more affordable duplexes, townhouses, garage and basement apartments, and multifamily housing. What is needed to change such ordinances, they assert, is the political will to educate residents about the community benefits of supplying more in-town housing that working families can afford.
Garfield Township: Live and Let Live
Local affordable housing advocates point to Traverse City and surrounding Garfield Township, the region’s two largest municipalities and job centers, as two communities that have taken some steps to solve their affordable housing problems.
According to Garfield Township Planning Director Gerry Harsch, his community has a long history of attracting working families, along with developers who build housing those families can afford.
“The people who are our Garfield family have a history of being accommodating,” said Mr. Harsch. “If you look at development after 1950, we had a large developer whose focus was on small, affordable housing. So, because we were developing that way, there was an attitude that this was a place that could have a high level of affordability as the subdivisions began to creep out.”
Indeed, Mr. Harsch says that experienced developers know that they will have an easier time with the township’s planning commission and zoning board if they pitch their projects as “affordable.” The township recently persuaded developers to include affordable housing in new developments by the Cherryland Center, the region’s original full-scale shopping mall.
Mr. Harsch said the variety of housing types in Garfield Township—mobile and manufactured homes, multifamily apartment buildings, duplexes, townhouses, and single-family homes—greatly contributes to the township’s affordability. A proposal for a mobile home park or an apartment complex might spark a backlash in other communities—and sometimes does even in Garfield—but, he said, there is more acceptance for low-cost options here than in many other built-up communities.
Mr. Harsch said that Garfield Township is now paying attention to a New Urbanist principle that can contribute to affordability—mixed use zoning: Clustering housing, offices, and retail together. That makes for shorter commutes, which helps families save money on transportation. Mr. Harsch points to Copper Ridge, a relatively new development that both clusters and mixes residential, retail, and office space, and preserves 55 acres of open space with the design.
“In the new comprehensive plan, we’ll have some high-density areas, and we’ll try to get them close to things like the mall,” explained Mr. Harsch. “We’re a lot more conscious about establishing a jobs-housing balance in our areas.”
Traverse City: Juggling Character, Beauty, and Affordability
Here in Traverse City, leaders are trying to address the need for affordable housing while preserving the town’s visual character—Victorian houses, small ranch homes, detached garages, and contemporary condominiums. Approving a new mobile home park would be sure to cause uproar; after all, residents have long blocked attempts to allow homeowners to build and rent so-called “granny flats” apartments over their garages.
Traverse City Planning Director Russ Soyring has worked to pass an auxiliary dwelling ordinance for years. Small garage or basement apartment would help recent college graduates, single people, families’ adult children saving for a place of their own, and elderly relatives who want privacy, independence, and a little help. The extra income from renting the apartment would also help the homeowner pay off the mortgage. Traverse City’s older, traditional neighborhoods already have many granny flats, but most are vacant because the rental rules are so restrictive.
Marsha Smith, a would-be landlady and the executive director of Rotary Charities of Traverse City, thinks that fears of raucous tenants are misplaced. After all, she points out, “those people” would be living in their landlords’ backyards, providing a strong incentive for choosing quiet, reliable renters.
But Traverse City is making progress. Since 1999, it has reduced the minimum lot size from 7,500 sq. ft. to 5,000 sq. ft., and lot width from 50 to 35 feet, in older neighborhoods. Alleys behind the houses eliminate driveways, making it possible to build a classy-looking house on a smaller lot and opening up neighborhoods for slightly more construction.
Like Garfield Township, Traverse City welcomes affordable housing providers like HomeStretch, which has built single family and townhouse homes in central Traverse City, Garfield Township, Benzonia, and Mancelona. Most recently, Traverse City reached an agreement with Red Management to facilitate a project with HomeStretch that will bring mixed income, mixed-use development to what is now city-owned land near Traverse City’s old train station. Red Management will pay for the land in two installments: $500,000 up front and $193,000 when it sells properties to homebuyers, reducing the developers’ carrying costs and chipping away at housing prices.
By working with HomeStretch, which established a community land trust in 2003, Traverse City and Garfield Township ensure that the affordable homes remain that way. That is because land trusts retain ownership of the property under the affordable homes: Buyers sign 99-year land leases that curb a home’s price appreciation, which is largely based on land values.
But the bright yellow on Traverse City’s zoning map represents a major obstacle to further increasing the supply of affordable housing. The yellow areas, Mr. Soyring explained, designate single-family neighborhoods. Though Traverse City is home to some 2,600 rental properties and an abundance of condominiums, there is little space available for less expensive duplexes or townhouses.
“In the 1970s, you could have two families in a home by right,” he explained. “People worried about evil absentee landlords, which led to rezoning. There’s a real strong bias towards owning and single family homes, and rentals tend to be feared. I think the neighborhoods are more stable and look better now, but the negative part is that they’ve risen in price much higher than wages. We’re making it more and more difficult for young families and low income people to move into the neighborhoods, so the affordable housing crisis is going to get worse and worse.”
Mr. Soyring thinks that allowing a greater diversity of housing types, like duplexes, townhouses, and “granny flats,” in a greater number of neighborhoods could greatly increase the supply of affordable housing in walkable neighborhoods near jobs, shops, and schools. That would boost Traverse City’s population while preserving neighborhood beauty and character. In fact, greater diversity in housing types would draw on the city’s architectural heritage.
“Older neighborhoods were really rich in diversity, with mansions, modest homes, and auxiliary dwellings for maids, with all kinds of buildings integrated well, and a place for everyone,” said Mr. Soyring.
There are a few tools that neither community is using. The most powerful is “inclusionary zoning,” which over 100 American communities employ to provide affordable housing and integrate it into neighborhoods.
Communities can use inclusionary zoning ordinances to require or encourage developers to sell a certain percentage of homes at a price working families can afford in each new development. Typically, prices are targeted at families earning 50 to 80 percent of the area median income. In exchange for providing affordable homeownership and rental opportunities, developers may be allowed to build more units per acre and protect their profits. Expedited permitting can also save time and money for developers, making it easier to include affordable units in their projects.
Unlike conventional codes that rigidly segregate people by income by controlling the size of homes, inclusionary zoning allows people of many different income levels to choose where they want to live. It also ensures equal access to good schools, shopping, parks, and community services. As communities grow, it also supplies enough housing for the cashiers, food servers, office cleaners, daycare providers, nursing aides, emergency medical technicians and other service-industry workers that serve a community’s businesses, customers, professionals, and patients. Mr. Soyring, for one, believes that is crucial to any town’s continued success.
“If the working class—teachers, someone to fix your car, clean your house, or process your medical reports—can’t live in your community, there’s some instability built into that,” he said. “If you have a monoculture of people earning upwards of $70,000 a year, we can’t survive. It won’t be good for downtown businesses if they can’t hire people, if entry level workers can’t live in town. And besides, wouldn’t it be boring to live where people earned the same salary, drove the same cars, and did the same things?”
Inclusionary zoning has increased the supply of affordable housing and protected the profits of developers in communities across the country. It is also illegal in Michigan, at least so far.
Democratic Representative Tupac Hunter would like to change that. House Bill 4180 would enable Michigan communities to require or encourage developers to sell a percentage of the homes in each new development at price that working families earning 80 percent or less of the area median income can afford and to rent homes that affordable to families earning 60 percent or less of the area median income. In exchange, developers would be allowed to build more housing units per acre. No action has been taken since the bill was referred to the Committee on Commerce on February 3, 2005.
Click here for a comprehensive list of zoning, policy, and financial tools available to local governments interested in promoting affordable housing.
This is the last of six articles about affordable housing in the Grand Traverse region, produced in cooperation with Rotary Charities of Traverse City. Click here to read the fifth article in the series. Carolyn Kelly is the Michigan Land Use Institute’s associate editor. Reach her at firstname.lastname@example.org.