Traverse City commissioners will discuss strategies tonight (Monday) for encouraging more workforce housing in the city, including using city-owned surface parking lots to build mixed-used or housing developments and offering incentives to developers to partner on public-private projects.

Commissioners Tim Werner and Ashlea Walter asked for the topic to be put on the agenda for tonight’s 7pm virtual meeting. The request follows a January strategy session in which commissioners identified housing as a top focus area for the next two years, as well as more recent discussions in which commissioners agreed to acquire property for a future parking deck on West Front Street. Staff reminded commissioners during those talks that it was a city goal to consolidate parking into decks downtown so that surface parking lots could be freed up for development. Werner says those discussions prompted some commissioners to “question the whole premise” of the strategy, with some asking why the city couldn’t immediately start looking to develop surface lots instead of waiting for decks to be built. Werner says he wants leaders to take concrete action to bring more housing to the city after years of discussing the issue.

“How do we get this thing going?” he says. “(The demand) has been pent up. I compare it to the renewable energy discussions that the city and Traverse City Light and Power had. There was a pent-up interest in the community and on the board for renewable energy, but without an outlet.” Just as city leaders took action to set renewable energy goals and begin implementing green and energy-efficient programs in recent years, Werner hopes to see the city start moving the needle on housing in a tangible way.

A memo from Werner and Walter outlines seven surface parking lots and another six city-owned parcels that could potentially be turned into housing in the city (see map, pictured). Parking lots include Lot G (100 block of East State Street), Lot O (northwest corner of State and Cass), Lot X (property behind Hall Street substation), Lot E (parkland behind U.S. Post Office), Lot C (east of Traverse Connect building), Lot N (200 block of Washington Street), and Lot T (southeast corner of Union and Grandview Parkway). Additional city-owned parcels could be used at Woodmere and Beitner, Lake and Eighth, Railroad and Eighth, Railroad and Front, Bay and Second, and Fifteenth at Boardman Lake.

Rather than picking one particular property and trying to shoehorn a development on the site, Werner and Walter are proposing using an RFP (request-for-proposals) process to seek mixed-use development offers for any or all of the parcels. “Maybe for reasons we don’t appreciate or understand, (one particular site) doesn’t pencil out,” says Werner. “By having a variety, we can let people who know more about this – city staff and developers – hone in on what makes sense.”

The high cost and limited availability of land in the city’s core poses a significant challenge in developing workforce or affordable housing by private developers, Werner acknowledges. But the city could leverage its assets – such as offering a parcel at reduced or no cost to a developer – in exchange for building workforce housing on the site. Other options could include pitching in additional investment by the city or Downtown Development Authority (DDA) toward projects, awarding tax incentives to developers, and offering additional height allowances for buildings that contain workforce housing. “There are very few tools we have (to encourage housing), but let's make sure we bring them all to the table,” Werner says.

According to Walter, the coronavirus pandemic has “increased the sense of urgency” regarding city discussions about housing. “I think we’ve reached that tipping point, knowing this pandemic has been shining a light on inequity across this community,” she says. “More people are seeing it and understanding it, and it helps make the case for (housing) even more than in a normal time.” Walter says the pandemic could also provide opportunistic timing for development, with potential lower construction costs and bond rates available going forward. “It’s a congruence of economic possibilities that would allow us to really move on this in a way that might be harder to do in booming times,” she says.

Werner says he knows some residents may have concerns about losing more parking in town, but notes that the West Front Street parking deck is planned to be built – with the total amount of available parking potentially fluctuating short-term but evening out long-term. More people living downtown will also mean fewer people having to drive and park downtown, Werner says. He calls it a “reasonable tradeoff” to lose some parking in exchange for building housing – particularly housing for residents in the “missing middle” who may have a steady income and work in town, but can’t afford to live there.  “I think providing housing is more valuable than providing parking,” Werner says. “This won’t be a silver bullet, but we need more housing options.”