Traverse City officials this week will discuss a planned reconstruction of Randolph Street and a potential compromise on a proposal to ban short-term rentals in certain commercial districts, instead possibly allowing a percentage of units to be designated as vacation rentals.

Randolph Street is set to be completely reconstructed this year in the 500 and 600 blocks between Division and Bay streets (pictured). The project was originally scheduled to take place in 2019, but was delayed a year to ensure enough street funds were available for the Eighth Street reconstruction. According to City Engineer Tim Lodge, Randolph Street is in “very poor condition” and has been identified as a “high priority for reconstruction,” both because of the bad shape of the road and the need to replace utility infrastructure.

City planning commissioners Wednesday will be asked to sign off on the planned construction design, which includes elements that are part of the city’s complete streets policy as well as a street design manual currently being drafted by staff. Randolph Street will be slightly narrowed – from 36 to 34 feet – and tree lawns widened on the north side from 7.7 feet to 9.5 feet. Special crosswalk pavement markings with sidewalk ramps meeting Americans with Disabilities Act (ADA) guidelines will also be installed. According to Lodge, people currently “meander along and across the street to access the businesses, housing, and the bay and do not tend to follow formalized crossing locations.” Sidewalks in some sections of the corridor will be replaced as part of the utility upgrades.

The project also calls for retaining the existing on-street parking and Bay Street bumpouts. Staff considered adding bumpouts on Maple Street’s north-south crossing, but had space restrictions with the street’s drainage system and couldn’t make the design work. Driveways along Randolph will be reconstructed to maintain the sidewalk grade and cross-slope, per ADA guidelines. Lodge notes the city has had conversations about converting parking on Randolph Street to timed spaces to promote turnover for the businesses along the corridor, but will hold off for now, continuing to monitor the road. “Recent and current development projects have increased the use of street parking in the surrounding area, but it is temporary,” he says. “When conflicts occur, they are addressed on a case-by-case basis.” There are no designated bike lanes on Randolph Street, as the corridor has “low traffic volumes and appropriate speeds,” according to Lodge.

Should planning commissioners approve the design Wednesday, it will next head to city commissioners for final approval and then eventually go out to bid. An exact timeline for construction has not yet been set, though the project is slated to take place in the 2020 construction season. “We are working with the adjacent businesses and residents to minimize the disruption of sidewalk users during construction by using temporary sidewalks and alternate routes,” Lodge says. “However, the site will not be accessible at all times.”

Planning commissioners will also be asked to share their thoughts this week on a proposed compromise to a ban they previously supported on short-term rentals in the city’s C-1 (office service) and C-2 (neighborhood center) districts. The planning commission has been looking for ways to encourage more long-term, affordable housing in the city, and thought a ban in certain commercial districts would disincentivize property owners from converting long-term rentals into more profitable vacation rentals.

But city commissioners had a lukewarm reception to the planning commission’s proposal, questioning – given the cost of city real estate – if a ban would truly create long-term rental housing or just encourage developers to pursue other profitable options, like luxury condos. Several commissioners expressed interest in a potential compromise: allowing developers to designate a certain percentage of their units as short-term rentals, as long as the remainder were used for long-term rentals. Numerous other cities have embraced such a compromise, according to a memo from City Planning Director Russ Soyring, including Austin, New Orleans, Seattle, and Richmond, Virginia. Many of those communities allow between 10 to 25 percent of a building’s units to serve as vacation rentals.

Commissioner Christie Minervini says that if the city is going to change its ordinances – affecting the rights of property owners – it needs to be clear on the anticipated outcomes. “I’m always look at, what’s the city getting out of this? Where is the carrot? How are we incentivizing property owners to build more housing for us?” she says. “Instead of a ban, why not look at…the fact that this is some leverage that we can use with developers. Let’s see what we can do to get something that we want out of the deal.”

City commissioners will talk about the compromise in more detail at their 7pm meeting Tuesday, scheduled a day later than usual due to the Presidents’ Day holiday. Traverse City Downtown Development Authority (DDA) CEO Jean Derenzy has also weighed in on the proposal, saying she supports a percentage compromise. In a memo to Soyring, Derenzy suggested creating a rule that stipulates 60 percent of units in C-1 and C-2 districts be used for long-term housing, with 40 percent available for vacation rentals. Derenzy noted she would support eliminating short-term rentals in one area – on Eighth Street, which could soon be part of the DDA as part of a proposed district expansion. “I believe the elimination of vacation rental homes (in this corridor) would better complement the neighboring Boardman Neighborhood as well as the multi-family developments in the Depot neighborhood,” she wrote.

In the rest of C-1 and C-2, however, Derenzy believes an outright ban would be detrimental, saying the districts are more suited to such rentals than residential neighborhoods. “(Enacting a ban) would likely push the vacation rentals debate further into the neighborhoods, which continues to cause much community debate and consternation,” she wrote.