Leelanau’s housing shortage—a symptom of low wages and larger societal problems

By Mae Stier 

Sun contributor

When Timothy Young built his home in Benzie County in the mid-1990s, he was a young man with the ability to be flexible while he slowly worked on his house. He lived out of a camper on his property as he gathered reclaimed lumber to build the beautiful home he has now lived in for more than 20 years with his wife, Kathy, and two children, Stella and Connor.

Young started Food for Thought, a line of organic jams and preserves, in the kitchen of their house, before purchasing the property next door to build a production facility that would house their business for the next two decades. Food for Thought has recently moved to Traverse City and the old production facility has been converted into long-term rental apartments. Timothy and Kathy currently have two livable apartments, with plans to add one more in the near future. 

The property that the Youngs own is a beautiful, wooded 10 acres that now has three livable homes on it––their own, the converted production facility, and a small cottage that they rent short-term on Airbnb. The Youngs also have two airstream trailers on the property available to rent in the summer. They have been rethinking the usage of the property over the last few years and are considering ways that they will be able to generate a living on the land with the rental properties while Timothy transitions out of his career after selling Food for Thought. 

While currently offering both long and short-term rentals, Timothy admits that he is unsure of how the usage of their buildings will evolve overtime, and he is keeping in mind that there is currently a shortage of long-term rentals in the area.

The Youngs entered into the landlord realm nearly 15 years ago, when they began renting a small cottage they had relocated to the property. Initially intended to be a guest house for friends and family, they began renting the cottage online when they realized it could be getting more use. Timothy and Kathy have seen the short-term rental market change drastically within that time, and think that now the “market is getting saturated,” which will likely lead to a shift in the way that people use and rent their properties in the future. 

While the short-term market has changed and caused some downward pressure on pricing––Timothy has noticed about a 20 percent drop per night on their cottage compared to when they started renting it—he believes the short-term rental market “will always serve a purpose for people on the beginning and edge of their life cycle.” He believes it is a great benefit both for young couples trying to get into the market, as well as for older retired people who want to stay in their homes.

In his mind, websites like Airbnb and Vacation Rentals By Owner (VRBO) have leveled the playing field and “lowered the entry level for young couples to buy their first house.” It has opened up a whole new market that previously did not exist, empowering people “to rent assets that weren’t their own,” he said. Timothy first learned of Airbnb from friends who were renting a couch in their rented Chicago apartment for $40 a night. “It turned everybody into an entrepreneur,” he said. 

Because of this ability to enable everyone and anyone to make money off property they already own, or merely rent, Timothy is skeptical of heightened regulations directed toward short-term rentals. Now that the market has opened up to more people, the regulations seem to address potential fears rather than existing nuisances. “We’ve given this right (to rent) to lakefront property owners forever, but now that working-class people are trying to get into this market, people are reacting to fear, thinking ‘what’s the worst-case scenario if this happens?’”

Timothy has yet to have a negative experience with either short- or long-term rentals. He credits this on the short-term rental side to the fact that sites like Airbnb and VRBO have a peer-reviewing component where guests and hosts can leave public comments regarding their interaction with the other. With prospective long-term tenants, he uses word-of-mouth to find those looking for housing, starting by asking friends who own businesses for referrals of employees they may have in need of housing. 

When Timothy first began renting their long-term apartments, he advertised the openings more widely, but found that he received responses from those not qualified to rent due to lack of income. The response was a “glaring example of the housing problem that we do have,” which he says is a symptom of a much larger societal problem. “The ever-widening gap between the wealthy and the working class is exacerbating the problem and, I think, probably the greatest cause of it. We are never going to solve the housing crisis until we solve the labor pay scale.” 

The gap he mentions is clearly seen in northern Michigan, where working-class laborers are unable to compete with many of the people moving to the area. “We are in a community that caters to the ‘1 percent’,” Timothy states, with an economy “that is dependent on the wealthy coming here and spending money and staying on the lakes and enjoying our natural resources.” 

Northern Michigan has seen an increase in property values over the last decade, with the median property value in Leelanau County during 2018 estimated to be around $268,902, according to the National Association of Realtors. 

In order for housing to be considered affordable, a family should spend no more than 30 percent of their monthly income on housing. For an individual or family to afford the median property values in Leelanau County currently, they would need to be making over $50,000, which breaks down to nearly $1,000 per week, or $25 an hour. According to the U.S. Bureau of Labor Statistics, the average weekly wage in Leelanau County for the fourth quarter of 2018 was $778, or just $19.45 an hour—78 percent of what one would need to make in order to find affordable housing. This disparity is indicative of the problem we have in our county and is evidence of how the gap Timothy discusses is manifesting itself in our community: laborers are not making enough to afford the cost of homes. 

He states that “the economy just isn’t set up so that people at that low-skilled working-class level are going to be ever able to even dream about owning a home, saving money to send their kids to college, or having health care. All of these things are out of reach to anyone who isn’t making $50,000 a year.”

The affordable housing dilemma, in northern Michigan and throughout the country, is “just a little sliver of a symptom” of a much larger-scale problem within our society, according to Timothy, and he doubts that zoning out short-term rentals would do much long-term to solve the housing problem. “We can do all the jiggering we want with zoning and discouraging certain types of housing, but none of it is going to come close to solving (the problem) unless we look at it as a comprehensive societal issue.” 

“What we are addressing right now has been happening forever, and it’s really a matter of (finding out) how we can bring a little bit more balance to it.” For the time being, the Youngs are working to add a third long-term rental unit to their property, offering a solution that will positively impact at least one more individual looking for housing in northern Michigan.