A place called home: Leelanau’s need for affordable housing

By F. Josephine Arrowood
Sun contributor

Affordable housing in Leelanau County is in short supply. That isn’t actually burning news. It wasn’t even news in 1995, when I became an Americorps worker whose mission was to help start a five-county housing nonprofit organization called HomeStretch. What makes it relevant, even urgent, today is that housing in the county—for workers with college degrees, skills and good jobs, families, people with low incomes, seniors, young adults—is evaporating more quickly than the water levels on Lake Michigan. When the basic needs of a community aren’t met—whether through a confluence of circumstances, lack of initiative, an adverse business climate, or refusal by its members to take action—then the whole community suffers.

Over the past year or two, I’ve been hearing anecdotes about how hard it is to find a place to call home. We HomeStretch organizers had used a study co-authored by Robert Foulkes, one of Empire’s New Neighborhood developers, which projected acute, long-term housing shortages. Due to the complexity of the issues involved, this story series examines factors in rental housing and home ownership. Part one takes a look at the rental picture in Leelanau County.

The devil’s advocate

Leelanau County Sheriff Mike Borkovich was recently asked about a new deputy, a temporary three-month hire who was having difficulty finding a place to rent. That young man’s problem was solved, in a way, when he was permanently hired by a neighboring county, but Borkovich wanted to share his own thoughts on the housing situation in Leelanau.

“There’s a sense of entitlement by some,” who, he said, demand to live in homes with lake views and other amenities. “All housing should be simple supply and demand, [it’s] a desirable place to live. They say, ‘Well, I should be able to live here.’ It’s like going to Boone’s or Ruth’s Cris Steak House and paying McDonald’s or Burger King prices. We have a free society and free enterprise.” He regards affordable housing advocacy (it’s common to regard the term “affordable housing” as a byword for welfare) as “artificial. You put a band-aid on a six-inch cut.”

He agreed that the issue is a complex one. “It’s all about jobs, education, buckling down. A good education doesn’t need to be just college, it can be the military, the trades,” and the like. The message is that it’s all down to the individual to pull him or herself up by the bootstraps: get educated, get a good job, work hard. The reward will be a good place to live.

Renters speak

Mary Beth Mitchael of Lake Leelanau knows hard work. The divorced mother cleans houses and rooms at a local inn and takes on other seasonal jobs, such as selling cherries from a small roadside stand. With a young child attending school and daycare, and her mother in a nearby assisted living facility, she needs to stay on the east side of the county. The onetime summer resident moved here four years ago to take care of her retired parents during their worsening health crises (her father passed away last year). “That’s the reason we stay here: we go to see Mom almost every day, we can walk to the grocery store. I need my son to stay [in school] here,” to keep a stable element in his young life.

She feels fortunate to have found a modest two-bedroom apartment in the village. “The only reason I found this place was my neighbor knew about it at my previous apartment,” a couple of blocks away, where she’d endured huge monthly utility bills. “There was no sign, no advertisement. As soon as I looked at it, I put down a deposit.”

Mitchael has a year lease on the unfurnished space, and her monthly rent of $695 includes utilities. Her unit is far from luxurious, having been carved from the former home’s basement, which limits sunlight and views. The rooms are tiny and dark, but it’s a warm, safe place to live, and she offers nothing but praise for her landlord, Loren Schaub. “He’s so nice—anything I need fixed. I love this place, I have good neighbors, too.”

Kayla Kellogg grew up in Maple City. When her mother’s home was foreclosed a couple of years ago, the 21-year-old moved in with her dad in neighboring Benzie County, while still commuting to her retail jobs in Cedar and Maple City. For several months this spring, she has been looking for a rental for herself, her son and boyfriend that’s closer to daycare and her work, but without success. “The only things I found were shared rooms in houses,” she explained. “They cost too much—$800 or $900, and I couldn’t afford it. For now, I have to save up my money again,” to have the necessary security deposit and rent, if a place becomes available this fall.

Meanwhile, her alternative housing, as with many young people in the county, is in a parent’s home—an age-old model that does offer some advantages, both financial and social, for the extended family group. But part of the adult experience includes living on one’s own, with the accompanying autonomy and responsibilities that entails. While living multi-generationally offers much, it’s a less common practice in American households than in other cultures. And it’s perceived as a temporary, if necessary, solution to the problem of affordable housing. Societally, it’s one thing to say, “My parent lives with me,” and another to say, “I still live with my parent.”

“Allie” is co-owner of a long-standing, seasonal business in Glen Arbor, who prefers that her name not be used. (She explains that she feels “stupid” in not being able to find year-round housing near her work.) She also is very active with an area nonprofit, volunteering thousands of hours over many years, and has deep family ties to the community. An empty-nester who has raised her children here, Allie’s housing needs are comparatively modest: a one-bedroom or studio-efficiency would suit her minimalist lifestyle well. “But it’s impossible to find anything year-round around here.”

She notes the growing trend of local homeowners—who don’t live on the water or even in the picturesque village—renting out their own homes, as well as guest quarters, garage “granny units,” or even single rooms during the peak tourist season of June, July and August. She gets it: if you can make a good part of your yearly mortgage in a few weeks, in a beautiful area that lacks many year-round, permanent jobs with a living wage, you too might consider renting out your rancher while you camp out down the road.

“When there’s money to be made, it’s like you can’t help but go for it. With the taxes, and people wanting to come here and vacation—it’s about desirability.” She knows what she’s talking about: she inherited a partial share in a waterfront cabin, which the clan rents out to vacationers in order to pay the taxes and upkeep on the property. Like other family members, Allie feels strong connections to the cabin, which is moderately sized and unsophisticated in its amenities, and in any case, the decision to keep or sell isn’t solely hers to make. Thus, ironically, she too has joined the pool of anxious renters seeking a place to call home.

She was lucky to find a rental in a tiny house in Traverse City through the owner, a friend. But the commute is long, 45 minutes each way on a good day. “I spend my time in Glen Arbor working from May through October, daily. With [work] events, summer things, I’m normally not back home ‘til 10:30 or 11 p.m.”

“Alllie” continues, “I don’t know what happens next; I don’t feel this is the best fit for me—but it’s what I can do. I thought a lot about getting a van, camper, Winnebago-thing on wheels to take around. If you want to have housing, rentals are tenuous. But if I did have a house on wheels, I can see lots of problems with that: wonder what it costs to park [for instance]?” Beyond costs, the county’s townships typically do not allow campers to be used as permanent housing. For example, centrally located Solon Township’s definition of a dwelling unit states, in part, “In no cases shall a travel trailer … or other such portable structures be considered a dwelling unit.” The yearly limit to park it outside, even on one’s own property, is 60 days.

A realtor’s view

Glen Arbor-based realtor Rob Serbin is very familiar with the issues and costs associated with housing in the county. While calculating some sort of generic price-per-acre formula is difficult, he says, certain truths hold, such as the old saw about “location, location, location.”

“The closer you are to the National Park, Glen Arbor and Empire, the price goes up,” Serbin says. “With water or shared frontage—a lake, creek or pond, or just water views—it’s value added. And size matters: the smaller the parcel, one to five acres, the more its cost.” He provides a snapshot view of vacant land prices: “For 20 acres or larger in the county, right now on a per acre basis—skewed for views and so forth—the average per acre asking price is $7,551/acre. The actual sale price is about $4,507/acre, or 86.7% of the asking price. And it’s going up. Vacant land as a commodity has been a slower part of the market, but is picking up.”

In Glen Arbor Township, as with other township zoning, land parcel size is directly connected to the allowable size of the building structure(s) and the number of dwelling units. Apartment buildings could typically be located within or near village amenities and infrastructures such as sidewalks, schools and transportation; again, the smaller parcels in these locations drive up prices for would-be developers of multi-unit homes. Serbin notes, “With multifamily units in most townships, the significant number is four [in terms of zoned allowable units]; less is easier to deal with. There are a number of multi-unit fourplexes in the county; they were pretty inexpensive to build in the ’90s.”

But, he adds, “Year-round rentals are tough. We have a little realtor pipeline,” where requests for information or listings are traded. “For months on a daily basis, I’ve seen two or three pleas [from] a professional person moving to the area, looking for a two-bedroom or small house, willing to pay $800-$1,200 or more a month.”

Landlords as advocates?

Area landlords agree that there’s a problem, and that it’s getting worse. While the supply-demand equation delights their bottom line, every landlord I spoke with had full occupancy of their rentals, and waiting lists.

Dave (who did not want to give his last name) owns a nine-unit apartment building outside Maple City; all but one are efficiencies, and fully occupied for the foreseeable future. Dave says, “There’s no affordable housing in Leelanau County at all. Mine’s probably the cheapest and cleanest you’ll find,” at $500, including utilities.

Corey Flaska comes from a Cedar family with 40 years of experience in the housing rental business. The 34-year-old Glen Lake graduate is the third generation to invest in the rental housing market. After college, he lived for 10 years in New York and California, returning in 2011 to buy his first rental investment. Last year, he bought and remodeled the brick Cedar schoolhouse apartment building, and just three months ago took on a rundown eight-unit dwelling in Maple City on a large parcel.

“There’s a heck of a market here,” he says, “and lots and lots of commercial property. My research shows rentals are in demand and will probably double in the next six years.”

“When I first got into it, my goal was to provide affordable or low-income housing to the Leelanau County community,” he says. “Mine are not as affordable as they could be … with mortgages, taxes, insurance, liability, I just can’t do it without some compensation. For a one-bedroom, $550-$700 is a fair price. But I can’t charge $650 or $700 a month for a two-bedroom in a new building.

“There’s a ton of programs in new building, but the application process is very complex. It’s about a $5,000 process to get designs, builder plans, paperwork, engineer expertise, and no guarantee, and a three-year waiting list. To build a 7,000 square foot apartment building at $110/square foot for affordable housing, it’s so high risk to do that.”

“My Maple Unit building is already full, and I’m putting in seven more next door,” Flaska continues. “There’s definitely a shortage; there’s no middle-class apartments anymore. Either it’s really crappy and cheap or really expensive.” He believes the solution should start at the local level.

“Leelanau County has an issue; why can’t the county housing commission do something? They say, ‘Absolutely no development. No multi-units [facilitated or funded through county government].’ My solution is simple. Find a guy like me who has experience in running rentals and wants to expand. The county could give me a 20-year tax abatement [similar to the Village at Grand Traverse Commons] or tax break, and also provide, say, a $3 million loan at a very low interest rate, I could build 100 units, with maybe half of them rent-controlled at affordable prices. I have the resources to build these units, but at the current cost, when I do build them, they will not be in the affordable housing price range.”

Flaska’s experience tallies with the trend throughout the county, not just resort areas. “Summer visitors are pricing out locals,” he explains. “I get so many calls when I have an available unit. They all say the same thing: it’s so hard to find a rental, especially in summer when all the houses triple in price. At least I only offer long-term rentals, and my prices do not jack up during summer. This provides security to the tenant and the landlord.”

Nonprofits and low-income renters

If housing is proving tough to find for renters with some resources—business owners such as “Allie”, service providers like Mary Beth, police officers with solid job prospects, households with two or more income sources—consider the added difficulties faced by low-income workers and families. A recent ad for the federally funded Section 8 voucher program (a rent subsidy based on annual income, with a two-person household under $23,857) announced that, on July 7, the wait list would open until the available 350 applications had been filled. Keep in mind that this is only a wait list, and a long one. Meanwhile, the hot rental market dictates that, like Mary Beth, you throw down your deposit money immediately if you are lucky enough to find anything at all—if you can afford it without that distant, tantalizing promise of rent assistance. If your income drops in January or your aging car’s transmission dies, you cannot later use that voucher (should you finally get to the top of the wait list) with your established landlord. And that assumes the landlord accepts vouchers; many don’t—and why would they need to?

By July 11, the Section 8 wait list had been filled and closed, and a worker at the Traverse City Housing Commission, administering the list for six counties including Leelanau, lamented, “It’s terrible, we have to turn people away all the time.” Her words echoed those of regional nonprofit HomeStretch’s accounting manager Melissa Begley, who added, “We have no [rental] vacancies, and a long waiting list.”

HomeStretch was formed in 1996 as a response to the growing need for affordable housing that was identified by the Leelanau County Family Coordinating Council, along with similar social services agencies in Benzie and Grand Traverse counties, and Habitat for Humanity. Kris Brady of Northwest Michigan Community Action Agency was deeply involved at HomeStretch’s inception, along with the late Judith Lindenau, and she still serves 18 years later as its board president.

“We’ve built rental housing, duplexes, some rehabbing, home ownership through a land trust model. We’re able to be flexible as funding has changed, but it’s really hard to get a lot of traction. For reporting requirements, demonstrating impact—there’s often a cookie-cutter approach,” with state grantors who compare large urban areas like Detroit with small rural models.

“Five homes built in a township with 500 people—that’s a huge impact for us. That’s why we need local support to help shore up the capacity of a nonprofit organization so they’re ready. The Benzie Housing Council, Leelanau REACH—they’ve folded. There’s a lot of footwork and no money for a lot of it; we do get Americorps grants to stretch dollars. In the end, ‘shovel ready’ projects get the funding.”

About tourism and related service industries promoted by marketers such as Pure Michigan, the social services veteran of 22 years comments, “It doesn’t support natives and provide adequate jobs. ‘Come and kayak our rivers.’ I live here in this beautiful place, and I get that. But service industries can’t be the only thing.” She notes that with many families she sees at NMCAA and HomeStretch, “each is working one full-time and a part-time job to pay the rent.”

“Another thing we do as a CCA—we’ve really grown our services for homeless and precariously housed. We help get vouchers, rent assistance, find appropriate housing. We see them all: families’ numbers are rising, as are seniors, not just chronically homeless.”

“My time on the HomeStretch board—my work will never be done. I’ve felt there’s more I could contribute; still work to do, and I can help. I’ve been doing this for so long—one nonprofit across five counties can’t meet the need. But we’ll keep trying.”

One small beacon of hope, and a potential model for other communities, shines in the village of Empire. Tucked away on a quiet side street, the Empire Townhouses offer 12 one-bedroom and six two-bedroom apartments, with rent controlled at 30 percent of an applicant’s income. UPCAP, a regional nonprofit based in Escanaba, administers the complex, which is human scaled, clean, and well maintained. An UPCAP housing management worker reached by phone gave clear and easy directions on how to join the waiting list for one of these units.

“Currently we don’t have any openings, and 13 people on a waiting list.” She says that’s not as bad as it sounds: “Every six months we clean up the list. We send letters to the people to see if they want to remain on. They have 10 days to get back to me.” So an applicant could get near the top of the list sooner rather than later. They’d still have to wait for an actual apartment to become available, but at least they would be in the queue.

Empire Township Supervisor Bill Bolton doesn’t recall the exact details of the Townhouses’ history, but he recalled it has been there for about 20-25 years. “A private corporation started it, and the only controversy was what their taxes would be. My wife’s aunt had lived there for a long time on just a railroad pension. Once in a while younger persons lived there. I know a couple of people whose widowed mothers lived there ‘til they died. They really liked it there.”

Truth and consequences

The Leelanau County Commission has adamantly affirmed its opposition to promote, facilitate or mediate affordable housing. Part two of this series will delve more into the county’s limited and reluctant involvement with home ownership programs, but as far as affordable rentals, Housing Manager Diane Kiessel confirms the county’s policy that, “No, the county doesn’t assist with rental housing.” The governmental website provides some links to housing services, which are all located outside of Leelanau County: most are regional or state agencies that are stretched tight to address the unmet need of emergency housing for homeless, nearly homeless, or mentally ill people, while others are nationwide businesses that lead the searcher on a dog’s-tail chase.

Before saying, like Sheriff Borkovich, that Leelanau’s “affordable housing should be a simple supply and demand [equation] for a desirable place to live”—which by definition is a short-term, volatile formula—consider the long-term and unintended implications. Take young families as one example. When your children and grandchildren cannot afford to live here (where many grew up) even as renters, some economic impacts include: less per-pupil funding by the state to operate and maintain area schools, fewer teachers, substitutes, and staff hired, and at lower wages; fewer daycare, medical, dental, social and emergency providers. Other obvious effects include fewer contributors to area businesses (seasonal and year-round) and services, both as consumers and as a workforce. A laissez-faire attitude toward affordable housing also suppresses the opportunities for new businesses. When they look at the demographics for this county versus, say, Grand Traverse, many entrepreneurs and even “big box” companies will choose to be in a community that has more potential and diverse customers, infrastructure, and at least some commitment to developing and maintaining a stock of affordable housing.

Over time, a lower population will potentially affect Leelanau County’s overall ability to access federal or state funds that are tied to census data. And according to the latest census figures, the population remains virtually stagnant overall between 2000 and 2010, while the average number of residents under age 60 (think of them as the active workforce) has shrunk by about 12.4 percent. Bottom line: with a reduced population, an older demographic, and a less economically diverse one, we choke off a wealth of resources in the long-term. Entropy—a closed system—must eventually falter and fail.

In the August 14 edition of the Glen Arbor Sun, we’ll explore how home ownership fits into scenic Leelanau’s big picture.