County Commissioners Approve Housing Initiatives

Grand Traverse County commissioners approved several housing initiatives this week, including a new checklist for developers seeking tax breaks for workforce housing. Housing projects seeking a payment-in-lieu-of-taxes (PILOT) agreement must now be geared toward residents earning no more than 100 percent of the area median income (AMI), down from a previous 120 percent AMI level. The board also agreed to have a consultant complete a housing study for the county.

The recommended changes came from a commission ad hoc committee that met several times to review PILOT, tax increment financing (TIF), and brownfield incentives. Those incentives, meant to encourage developers to build workforce and affordable housing, require approval from several boards. Those typically include the local city or township, the Brownfield Redevelopment Authority, the state, and the county.

According to Commissioner TJ Andrews, who chaired the ad hoc, county commissioners often get the applications last and have little input other than an expectation to sign off. “The reason (these recommendations) came out is…we see projects after they’re approved by everyone except us,” she said. “That gives us no real ability to have any influence one way or another in terms of policy direction and things we want to see.”

The goal is for the county to be “involved earlier” in the process when developers seek tax breaks and give “guidance” on what commissioners are looking for, Andrews said. “We think our community is better off if they have a clear, straightforward, simple idea as to what this board wants to see for these projects,” she said.

Commissioners approved a new checklist for developers seeking TIF and PILOT deals for rental housing projects. It states that commissioners will approve applications when all the criteria are met. Among the standards, at least 20 percent of the total units must be rented to tenants whose household income is less than 100 percent AMI. Projects must ban short-term rentals, comply with local zoning requirements, and keep rent and income restrictions in place for at least a decade. By law, developers can only receive tax breaks on the units within a development that are income-restricted – and only for the length of time below-market rents are in place.

The checklist also has a “concurrent review” requirement. To ensure county commissioners have ample time to review projects, applicants must notify the county at the start of their application process before they go to a local township or city for approval. Commissioners adopted the new checklist 7-1, with Commissioner Ashlea Walter opposed and Darryl Nelson absent. Walter was opposed because she wanted to see more than 20 percent of units in a project be designated for income-restricted tenants. Other commissioners, however, worried that setting the level too high would simply discourage developers from including any below-market units at all. A lower threshold could ensure a wider variety of projects have at least some affordable units included, Andrews said.

Commissioners also unanimously approved updating an existing resolution that outlines their conditions for approving PILOT agreements. Changes to state law offer more flexibility to communities to use PILOT agreements with developers as an incentive to build workforce housing. Instead of normal property taxes, a developer under a PILOT agreement pays a defined percentage of net shelter rents to the local municipality. The PILOT agreement remains in place for a certain number of years – typically 15, though agreements can be renewed.

The county’s updated resolution says PILOTs must now be geared toward residents earning no more than 100 percent of the area median income (AMI), down from a previous 120 percent AMI level. 

Finally, commissioners unanimously agreed to put out a request-for-proposals (RFP) to hire a consultant to complete a housing market assessment specific to Grand Traverse County. The report would provide updated information since the last time Housing North and the Bowen National Research put out a Housing Needs Assessment in 2023, plus evaluate the range of tax abatement housing projects county commissioners have approved in the meantime.

Commissioners said they also wanted to look at everything from short-term rentals to market-rate housing to get an accurate picture of the local housing supply and shortage. “We want a big picture specific to this community,” Andrews said. Staff will prepare the RFP language and bring it back to commissioners for approval at an upcoming meeting before putting it out to bid.