ADUs: An Affordable Housing Option for Traverse City?

For homes in downtown Traverse City the median price for three-bedrooms is around $249,900.

By: Megan Olds 

 

Affordable housing is an issue that keeps making headlines. Traverse City Commissioner Matthew Schmidt was recently quoted in the Record-Eagle as stating, "Affordable housing in our city is lacking; and if we want to continue to have the elementary schools in our city and want thriving, diverse populations, we need more options, especially for people who are just starting out." According to the 2003 Housing Needs Assessment completed by the Community Research Group, 11,000 new middle- and lower-income households will need affordable homes in the Grand Traverse region by 2008.    

 

In Grand Traverse County, the average wage per job is $32,523.[1]  That's a pretty standard wage for starting teachers, nurses, and firefighters in our area. Assuming some rather standard mortgage considerations such as good credit, 3% down, and adequate funds for closing costs, a person making this wage could afford a house of around $95,000.  In Traverse City today, the median price for a three-bedroom house is $249,900, according to figures from www.realtor.com.  Housing prices are rising 3-7 times faster than incomes.[2]  Without an adequate supply of affordable homes for sale, renting is the only alternative. 

 

When my husband and I decided to moved here from Ohio, we knew we wanted to live near the downtown. This was partially due to a lifestyle preference and partially due to practicality. We definitely preferred the character, convenience and accessibility of downtown living and, as new members of the community, we felt it would be easier to meet people living in town than if we lived in a suburban area. We also faced a transportation barrier. With only one reliable vehicle between us, we knew that one of us would need to be able to walk to work.

 

When we sought a rental place in town, we were discouraged by the options in the $400-$600-a-month price range, which was what we could afford on our combined minimum wage incomes. To our dismay, we saw a one-bedroom place with barely enough room for a bed, a creepy basement apartment that smelled like mildew, a dingy duplex with stained carpet and cigarette-laden air, and a place that had obviously housed a lot of cats. The one rental where we felt comfortable came with an unsettling contingency: the woman that owned it said that she was considering moving soon and might need to live in the place temporarily herself.

 

Unwilling to resign ourselves to a tenuous transitory living space - and resigning ourselves to the fact that we'd probably end up living in Cleveland instead of Traverse City - we drove through Central Neighborhood on our way out of town. On West 10^th Street, we saw a "For Rent" sign for the bottom floor of a well-maintained house. The landlord was in the backyard mowing the lawn. After a short conversation with him and an agreement on the $600/month rental fee, we wrote a deposit check. We felt very lucky. A few years later, we had saved enough money to purchase a small home just two houses down from where we rented. A few years after that, we moved into a larger house in Old Town neighborhood.

Accessory Dwelling Units can be on top of garages, like this potential

Expanding Options for Families

When my husband and I bought our current house, it was being used, illegally, as a duplex. When we moved in, it had a kitchen upstairs and no real place for a kitchen downstairs - we had to knock out some walls in order to accommodate a stove, fridge, sink, and countertops in a workable space. However, one of the reasons we could afford to buy the house was because it was in this slightly disreputable condition. For us, this house is a labor of love. We're completely committed to raising our growing family in this home, and to Old Town neighborhood.

 

This summer, we decided to build a garage in our backyard. I'll be the first to admit that it's a pretty big garage, but our house is an old, Victorian-era two-story, so the new garage fits the character of the lot where it lives. In fact, it's the same size as an existing structure just across the alley. However, its presence is a change for the neighbors. Several have commented on its size.

 

Our family enjoys a host of outdoor activities that involve equipment (e.g. canoes, skis, etc.), and my husband likes to tinker (his dream is to build a wooden boat). We designed the garage with this in mind, as well as with considerable storage space above, which, we hope over the next few decades can be remodeled to serve as comfortable quarters for family guests who currently reside across the country in Wyoming, New York, and Ohio. We also know that one day, in the distant future, we may have one of our parents living with us. Having flexible space above the garage makes that proposition a little more palatable, creating a semi-private potential living place. We don't have any intention to rent the space, which would violate current zoning. But the entire process of the garage's development has led me to ponder the nature of garage apartments and Traverse City's affordable housing options. While it would certainly not be a huge money-maker, the ability to offer rental space above our garage would provide considerable benefits. For us, renting a loft apartment above our garage could help us pay off the garage more quickly and stabilize our home equity, while simultaneously enhancing the functionality of our property through our use of this asset.

 

So, What the Heck Are ADUs?

Planners typically refer to apartments above garages as "accessory dwellings units" or ADUs. These commonly-called "granny flats" can often house family members or serve as low-occupancy rentals. Some communities permit ADUs stipulate their design, and regulate parking, storage, and orientation, so that community character and the privacy considerations of neighbors are respected. Over the years in Traverse City, there has been considerable disagreement over the potential permitted use of ADUs. Countless work sessions, numerous neighborhood and committee meetings, and heated debate have centered on this topic.

 

ADUs are common in many parts of the country. A recent New York Times article highlighted the emergence of ADUs in urban and suburban areas as a way to increase housing options and encourage affordability. Here in northern Michigan, there are several communities that permit or have explored the potential for allowing ADUs, including Suttons Bay and Green Lake Township near Interlochen.

 

Depending on the design, ADUs could serve as traditional "granny flats" for older residents, as yuppie lofts for teachers, nurses, or other young professionals, or as housing for those who serve us every day in shops and restaurants. Certainly ADUs are not a "cure all" for an affordable housing shortage, but they would provide alternative housing choices, and could provide a tool to enhance affordability for those interested in owning a home in town. In this way, ADUs could serve as one selection in a menu of housing options in a community. More housing options in town can bring new life to urban areas by providing an opportunity for increased resident interaction and by helping to populate neighborhood schools. It can potentially lead to fewer cars and less congestion, since people are more likely to be able to walk to their jobs, to school, and to stores.

Nighborhood character, parking, and privacy are all protected at this location in Traverse City.

Addressing Concerns about ADUs

I recently attended a committee meeting of the Traverse City Commission where ADU's were discussed. Among the concerns about ADUs cited by citizens were neighborhood character, parking, privacy, and private-sector competition. Unless these concerns are artfully addressed or consistently enforced, it is unlikely that ADUs will be successful in Traverse City.

 

An ADU's design should respect a neighborhood's sense of place and aesthetic. Some communities have come up with creative ways to encourage these aspects. For example, in Santa Cruz, California, local officials created a coffee-table book that offers ADU designs that respect neighborhood architecture and urge landowners to respect their neighbor's privacy and parking concerns. Concerns about absentee landlords could be addressed and enforced through a residency requirement for property owners with ADUs. Certain types of screening or landscaping could be required to address other aesthetic and privacy considerations.

 

Even if ADUs were permitted in town, it's doubtful that many would be developed. Homeowners evaluating this as an option would certainly research the rental market prior to making such a huge investment. They would also assess whether they'd be willing to accept the demands of being a landlord.

 

The political will to make changes to zoning that would allow for the presence of ADUs rests with the neighborhoods. If residents truly value having strong neighborhood schools, diversity of age and income levels, and less-congested roadways, they should openly explore the development of ADUs and other options that increase the amount of diverse housing. However, in order for neighborhood residents to feel comfortable with ADUs and other options, there needs to be open, active dialogue between neighbors themselves, the associations and city officials. There needs to be more clarity about what ADUs might look like, who might live in them, and how they might impact the neighborhood's character. If they are permitted, there needs to be some guidance regarding design and parking considerations, and continued outreach to property owners developing an ADU. With the City's renewed interest and leadership, a community discussion about the real benefits and challenges of ADUs, and an agreement about the best way to address the preservation of place while enhancing housing options, is a necessity.

 

Megan Olds is the Regional Planning Director for the Northwest Michigan Council of Governments, the mom of a spirited toddler, and a resident of Traverse City's Old Town neighborhood.

 

[1] Source:STATS Indiana, a web service of the Indiana Business Research Center at the Indiana University Kelley School of Business. Retrieved November 28, 2006.

[2] Source: Housing Needs Study for the Grand Traverse Region.  Produced for HomeStretch.  2003.