Michigan Renter’s Bill of Rights Proposed in Michigan State House, PILOTs Happening to Allow More Housing Develop in Communities Across Michigan, Can TC Be Next?, and Planning Commission for Village of Suttons Bay Recommends Increasing Units per Building for Multi-Family Housing
Some concerning proposals for housing providers in a proposed Michigan Renter’s Bill of Rights, A look at payment-in-lieu-of-taxes (PILOT) ordinances for workforce housing occurring across the state that could be considered in Traverse City, and the Village of Suttons Bay increases their maximum number of units per multi-family structure.
1. Michigan Renter’s Bill of Rights Proposed in Michigan State House
Michigan REALTORS recently received draft information, proposed by Michigan State Representative Emily E. Dievendorf a first-term representative of Michigan’s 77th House District, which encompasses north Lansing, DeWitt, and Watertown Township and serves as the Vice-Chair on the Economic Development and Small Busines subcommittee on Housing, on a proposed Michigan Renter’s Bill of Rights. There are some concerning proposals in this Michigan Renter’s Bill of Rights that although may be proposed with good intentions, they would appear to have the effect of disincentivizing housing providers/landlords providing housing options. Here are the main concerning items:
- Removal of the Michigan state ban on local restrictions on rent control policies. Grant autonomy to local governments toward enacting rent control
- Research has shown that Rent Control policies reduce home values by as much as 10%, reduce the supply of housing, and increase rental prices.
- Right of first refusal gives tenants the power to band together and put up the money to purchase a building up for sale first. In some cases, tenants may also assign this right to a local nonprofit like a community land trust.
- Allows tenants to take care of repairs themselves and charge the landlord accordingly
Other proposed clauses could also cause concerns for housing providers, including eliminating credit history to consider a tenant’s ability to afford a rental residence. In fact, a bill (House Bill 4818) has already been introduced by Representative Brenda Carter to disallow credit scores from being used to determine tenant eligibility. Michigan REALTORS will be closely monitoring any movement on HB 4818 and any other bills that may be proposed to advance this Michigan Renter’s Bill of Rights in the Economic Development and Small Business subcommittee on Housing or other committees.
2. PILOTs Happening to Allow More Housing Develop in Communities Across Michigan, Can TC Be Next?
As the conversation on establishing a payment-in-lieu-of-taxes (PILOT) for workforce housing (allowed for all local governments under Michigan State Senate Bill 432, signwed into law the end of 2022) in Traverse City appears to still be at a standstill since conversations on it began in February of this year. Two local governments in Michigan have put together PILOT Ordinances for workforce housing that could be a model for Traverse City’s consideration of a PILOT program as Traverse City expressed intent to complete an updated PILOT Ordinance by the end of 2023. One of them was adopted on June 6th, 2023 in White Cloud, while a similar PILOT Ordinance for workforce housing is currently under consideration in the City of Jackson. Both Ordinances are very similar. Below, I highlight some of the key provisions in the ordinances of the City of White Cloud and the City of Jackson:
- Tax exemption (PILOT instead of ad valorem property taxes) applies to housing projects being developed for rehabilitated workforce housing (defined as housing reasonably affordable to household incomes no greater than 120% of the area median income)
- Construction must start within one year for exemption
- For new construction, the payment amount would be the greater of either the tax on the property on which the project is located for the tax year proceeding the date on which the construction is commenced or 10% of the annual Shelter Rents obtained from the project.
- For a rehabilitation project, the payment amount would be the lesser of either the tax on the property on which the project is located for the tax year proceeding the date on which rehabilitation is commenced or 10% of the annual Shelter Rents obtained from the project.
- Only workforce housing is eligible for tax exemption, however, a project can take a tax exemption for the portion of their project that is workforce housing, if not all housing units of a project are workforce housing.
- A covenant runs with the land for any tax exemption for workforce housing that restricts the use of the housing project to workforce housing for a period not to exceed 15 years but may be less than 15 years.
To be effective for housing developers' use for the tax year 2024, housing developers must be eligible to file a notification of exemption with the City Assessor by November 1st, so time is of the essence. If you would like to see the Traverse City Commission and Traverse City staff a priority prior to this November 1st deadline, contact the City Manager’s Office and/or the Traverse City Mayor and Commissioners.
3. Planning Commission for Village of Suttons Bay Recommends Increasing Units per Building for Multi-Family Housing
At the August 9th Village of Suttons Bay Planning Commission Meeting (pages 1 and 2) a motion was passed to increase the number of units per multi-family building from 8 to 18, as it meets the criteria of Section 18-3 (c) of the Zoning Ordinance. Commissioners stated the amendment does not increase density, but instead keeps the gross units in a single building per acre. For more detailed information on this unit per building amendment view the August 9th Village of Suttons Bay Planning Commission Meeting agenda (pages 6 to 8)
