The topic of housing will dominate the Traverse City commission agenda tonight (Monday), with commissioners set to vote on a package of long-debated housing zoning changes, two payment-in-lieu-of-taxes (PILOT) agreements with development group Innovo to provide workforce housing in the Breakwater complex on Garland Street and a new project on Hall Street, and a potential RFP for housing proposals for city-owned property on Woodmere Avenue and Beitner Street.

Housing Zoning Amendments
After months of debate and significant public input at both the planning and city commission levels, city commissioners will vote tonight on approving a package of zoning amendments designed to increase housing density and diversity in the city.

Commissioners agreed in September to move ahead with scheduling a vote on several proposed zoning changes, though some amendments initially up for consideration were rejected. Commissioners will vote tonight on approving the following amendments:

> Increase Density in the R-1a/b District: Allow duplexes by right.
> Cluster Housing Modifications: Reduce minimum lot size from five acres to one acre; switch from a city commission special land use permit to an administrative SLUP.
> Two Principle Dwellings in R-1a/b: Allow two principle homes on lots that are twice the minimum area without a lot split.
> Dimension Standard Modifications: Reduce minimum lot width in R-1a from 90 feet to 70 feet; reduce minimum lot width in R-1b from 45 feet to 35 feet; reduce minimum lot area in R-1a from 9,000 square feet to 7,000 square feet; reduce minimum lot area in R-1b from 5,000 square feet to 4,000 square feet; increase maximum impervious area in R-1a from 30 percent to 35 percent; increase maximum impervious area in R-1b from 45 percent to 50 percent; increase maximum impervious area in R-1a from 45 percent to 50 percent.
> Accessory Dwelling Unit (ADU) Modifications: Remove the annual cap of 15 permitted ADUs; allow ADUs with duplexes in R-2.

Other changes that had been previously discussed but ultimately didn’t have enough support to be put to a vote included increasing density in the R-2 district by allowing triplexes and quadplexes, as well as ADU changes that would have allowed ADUs with duplexes in R-1a/b, allowed ADUs with triplexes and quadplexes in R-2, and removed the owner-occupancy requirement for permitting an ADU.

The amendments have generated community debate, with a group called Alliance of Citizens for Traverse City launching a website opposing the amendments, calling them “blanket zoning changes to increase population density.” Housing advocates and a group of interfaith leaders called the SALT Coalition support the amendments, however, with the latter collecting over 100 signatures on a letter to city commissioners encouraging them to approve the changes.

“The history of zoning in our country is rooted in exclusion and intentionally keeping people out of our neighborhoods. We want to build a community that makes room for people of all class identities,” the letter states. “Though our faiths may have different rituals and teachings, we all share a common value: All people deserve safety and dignity. Housing is a human right, and it is our collective responsibility to ensure we are building communities that meet all our basic needs.” While “zoning is only one piece of the puzzle,” the SALT Coalition wrote, “it is an important step on the path toward building more attainable housing in our city.”

PILOT Agreements
Commissioners will consider approving two payment-in-lieu-of-taxes (PILOT) agreements with development group Innovo to provide workforce housing on Garland and Hall streets – the first agreements to come forward under the city’s newly approved PILOT ordinance. The ordinance states that an affirmative vote from at least five commissioners can pass a PILOT agreement, in which developers pay a percentage of rental income to the city instead of traditional taxes to offset the costs associated with offering below-market housing. The ordinance applies to “workforce housing for persons and families whose household income is not greater than 120 percent of area median income (AMI).”

According to a memo from Interim City Manager Nate Geinzer, Innovo will dedicate at least 80 percent of its 78 units in the Breakwater apartment complex on Garland Street (pictured) to households earning between 80 percent and 120 percent AMI. Breakwater’s unit mix includes 24 studio units (450 square feet), 35 one-bedroom units (670 square feet), 16 two-bedroom units (1,047 square feet) and 3 three-bedroom units (2,115 square feet). Leases will be 12 months long, with sub-leasing explicitly prohibited. Innovo is seeking a 10 percent PILOT agreement for 15 years. Annual PILOT payments based on 96 percent occupancy are estimated at $183,651.

Innovo is also seeking a 10 percent PILOT for 15 years for a new workforce housing project planned on Hall Street next to BATA. The Godfrey, as the project is being called, “will provide up to 127 workforce units with a range of unit sizes, including mostly studio apartments and one-bedroom units with a few two-bedroom units,” according to Innovo. All of the units will be dedicated to tenants with income levels between 80 and 120 percent AMI. Annual PILOT payments based on 96 percent occupancy are estimated at $291,092.

As with Breakwater, leases in the Godfrey will be 12 months long, with sub-leasing prohibited. Construction is expected to begin in summer or fall of 2024, with the building ready for full occupancy by fall 2026. Geinzer noted that if the PILOT is approved for the project, it will be “the largest long-term rental housing development in downtown Traverse City.”

Woodmere/Beitner RFP
Finally, commissioners tonight will revisit a debate on issuing a request-for-proposals (RFP) for housing projects on city-owned property at 715 Beitner Street, 723 Beitner Street, and 535 Woodmere Avenue. Staff are strongly opposed to issuing an RFP, with both Geinzer and former City Manager Marty Colburn flagging concerns about the suitability of the sites for housing and the need to retain the properties for future city growth.

However, Commissioners Tim Werner and Mark Wilson requested the RFP be put on the commission agenda for possible action. “This city commission has had addressing the housing crisis as a top priority since we were seated together two years ago,” they wrote. “Before us is an opportunity for this body to move the RFP forward and add needed workforce housing in Traverse City.” The recommended motion for issuing an RFP includes a caveat that redeveloping 723 Beitner be contingent on finding an agreeable alternate site for FishPass construction staging, which is currently planned for the Beitner property.