More affordable housing could be on the way in Traverse City.
Commissioners passed a resolution for a Payment in Lieu of Tax (PILOT) agreement for a new affordable housing complex Monday.
The new development is called Annika Place II, and thanks to the PILOT agreement, it will feature 33 apartments set aside for individuals earning 40 to 80% of the Area Median Income, plus 19-units set aside for the homeless.
Under the current PILOT program rules, the development still has to get approval from the Michigan State Housing Development Authority before the developer can receive a tax break.
Traverse City’s Mayor Pro-Tem Amy Shamroe says the city commission has noticed the issues people have had trying to find affordable housing and is taking action to solve the shortage.
“We know how expensive housing has gotten. The five county area around us has gotten so expensive,” Shamroe acknowledges.
The Traverse City Housing Commissions Executive Director, Tony Lentych, says the new four story 52-unit development should help make a dent in the housing shortage in Northern Michigan.
“It’s a good thing for the City of Traverse City. This particular property is going to have significantly more support for housing opportunities for people,” Lentych predicts.
If approved by the state, the PILOT agreement will give the developer, Woda Cooper Companies, a tax break for 16 years in order to keep the apartments affordable.
“We don’t charge them full tax on it. We agree to a 6% tax,” Shamroe admits. “So, there will still be tax collected, but it’s not what a condo in the city might cost, and we do that so the rent can stay low.”
The new legislation on PILOT agreements passed late last year takes effect this fall. It would cut out the state completely and allow local boards to approve the tax breaks on affordable housing developments themselves. That will make it easier for future projects.
“It would still have the same restrictions, it will still have the same checking in on it. It wouldn’t be that they get to build luxury condos for a year, get a tax break and then kick everyone out and still get that tax rate. It’s still going to be monitored there will just be more local control over it,” Shamroe explains.
They say allowing the local boards to approve affordable housing developments themselves will have a great impact at solving the affordable housing crisis in Northern Michigan.
“Not only do we hope to have more applicants for people who want to build new housing and have a mix. We’re also hoping that some of the currently existing apartment complexes will be applying for some of those PILOTs,” Shamroe says.
Shamroe says they’re still hashing out everything in the new PILOT program, but says she’s looking forward to even more new projects coming when it goes into place in November.
