Traverse City grows as local workers search for a place to call home

The booming resort town of Traverse City has a difficult task in finding affordable housing for local workers.

Abbie Steffens’s floor is dotted with half-packed suitcases as she prepares for her June 1 move. After months of searching for housing in a market littered with charming bayside bungalows in Traverse City, she’d finally settled for a one-bedroom apartment.

It wasn’t in her budget. But then again, little was. “It hasn’t been easy,” she said. “It’s been kind of a nightmare, actually.”

Steffens was thrown into a tumultuous housing search a few months ago, when the owners of her apartment complex told her they would soon be converting the building’s units into condominiums.

Steffens manages the craft cocktail bar at The Franklin on Front Street in downtown Traverse City, a position she earned after a decade in the local service industry. She’d spent seven years sharing apartments with roommates. But at age 30, she was ready to live alone.

Related: In Charlevoix and Petoskey, pricey housing leaves businesses without workers

Abbie Steffens, bar manager at a downtown Traverse City restaurant, is finally going to move into her own apartment. She can’t really afford it, but it keeps her in town. (Bridge photo by Riley Beggin)

Despite making well above survival wages, that’s not easily accomplished. She makes $42,000 a year. After taxes, her budget for housing should top out at around $815 a month, according to the U.S. Department of Housing and Urban Development. But in Traverse City, median rent has risen to roughly $865, not including utilities, according to Networks Northwest, a regional economic development group.

After looking at 25 apartments, Steffens secured a place in town for $900. Her experience isn’t unique — many middle-income, often young, workers feel the squeeze of rising property values and housing demands that can be a barrier for local businesses trying to attract talent to fuel the rapidly growing economy.

Over the last five years, the lack of affordable housing for young professionals has entered a “crisis mode,” said Kent Wood, Director of Government Relations for the Traverse City Chamber of Commerce.

The city should be building between 1,200 and 1,500 units of housing per year for the next five years to keep up with demand, he said. “I can tell you right now we’re not even close to meeting that.”

Developers, though, have little incentive to build housing below market rate when high property values, zoning regulations, product material costs and difficulty in meeting requirements for federal grant programs all conspire to make building new housing more expensive, according to Wood.  

“The incentive is there to build and have it be higher dollar level because that’s where they can make their money back from,” he said. This leads to housing prices that are out of reach for many who fuel the area economy but who make too much to qualify for subsidized housing.

On average, single people in Grand Traverse County should make at least $33,400 to afford market-price housing, according to HUD data compiled by Networks Northwest.

That equates to just over $16 per hour for full time workers — well over the regional median hourly wage for the food service positions ($10.30), other tourism and service-related positions ($10.86), sales positions ($12.21) and maintenance positions ($12.14) that fuel the local tourism economy. Agriculture ($12.17) and manufacturing and production ($15.91) — two other pillars of the regional economy — also offer wages that can make affordable housing out of reach.

As the economy grows, there’s clearly “lost opportunity because of these housing needs,” Wood said.

It’s a challenge spread across Michigan’s northern resort areas, as Bridge Magazine has chronicled in recent years. The lack of affordable housing and job opportunities in the region are among the economic challenges Bridge is exploring as part of its Michigan Truth Tour this election season.

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Those who choose to live further from Traverse City and commute to their job deal with the added cost of relying on a car make it to work. Traffic is increased for the whole region and employers can’t rely as much on their workers to make it to work on time, said Marsha Smith, executive director of Traverse City Rotary Charities.

Restaurants can’t open because they don’t have enough workers, said Doug Luciani, CEO of TraverseCONNECT, a resource for area businesses. He said tourists sometimes must wait in restaurant lines despite plenty of empty tables because there’s not enough staff to serve them.

Luciani offered one place to start: “First, you have to admit you have a problem.”

Traverse City Mayor Jim Carruthers said the city has long been working on solutions and has made it a priority for the City Commission to build more subsidized housing and broaden workforce housing if possible. But young workers who have trouble finding housing in Traverse City are not the ones that most need local government’s help, he said.

“As mayor if I’m going to subsidize housing for anybody it’s going to be the homeless or people who are one paycheck away from being homeless,” Carruthers said.

“I’m really happy (young professionals) are coming to our area,” he said. “They have options. A lot of people — the homeless, single moms struggling to get by — they don’t have a lot of options.”

Wood, Luciani and Networks Northwest point to the area’s low-density zoning as a barrier to multi-unit development that could offer solutions for middle-income workers.

What’s more, voters recently amended a portion of the city’s charter to require all building projects over 60 feet tall be approved by public vote. Opponents argue that gets in the way of developing multi-unit buildings to house the growing workforce. Proponents of the measure argue it keeps the area’s trademark charm intact.

“Building tall buildings that will be able to provide affordable housing is a fallacy. The taller you build the more expensive the real estate,” Mayor Carruthers said, adding that most of the proposed tall buildings are luxury housing. “Small town character has been a core value and a core principle in our master planning for many years, that's the reason people come here.”

Shared housing development is still on the rise, said Luciani of TraverseCONNECT, but it is usually far from the region’s urban center where young talent flocks.

“So the solution is at some point, to us at least, the local governments are going to have to adopt local tax policies that incentivize the type of development that they want,” Luciani said.

Sarah Lucas, community development director at Networks Northwest, said housing has become less affordable over time, but she’s also seen the community come together to tackle the issue.

“We’ve had a lot of people step up to the plate,” she said. “I’m really encouraged.”

She pointed to Leelanau REACH, a non-profit affordable housing initiative, as an example of progress in neighboring Leelanau county. In Traverse City, Habitat for Humanity-Grand Traverse Region’s Depot Neighborhood provides a model for what’s next.

“It’s taken 8 years plus for that to come together but I think it’s a good example of what you can do in partnership with the government and housing organizations,” Lucas said.

In the meantime, Steffens’s community of service industry workers are watching their businesses flourish in an economy that leaves them searching for a place to stay.

“I don't know what would need to happen or what we can do to make a difference to make it be heard that we need to have some options for those people,” Steffens said. “Otherwise, this town’s going to bottom out.”

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Comments

Bob
Thu, 05/31/2018 - 8:47am

My 31 year old son who was born in Traverse City and has lived here his entire life has announced that he and his partner intend to move to Grand Rapids. He is a certified welder and she a graphic artist who works as a teacher's aid. While both have good jobs, they are unable to find decent housing within their budget. There is housing available, but what they can afford is grossly overpriced. The mayor needs to recognize that these are the types of people upon which one builds a community. Without solid middle class earners, our community will be populated only by the wealthy and the poor and become a husk.

Mark
Thu, 05/31/2018 - 6:41pm

I've always said that tc is a town of haves, and have nots,

Arjay
Thu, 05/31/2018 - 8:51am

You could change the name from Traverse City to any of the Gulf Coast cities in Florida or Alabama and you would have the same story. Demand has outstripped supply, prices are rising, and wages no longer support being able to afford a place to live. In Florida, people wanted to build lower priced houses and apartments, but local regulations prevented them from doing so and still make a reasonable profit. In my mind, that is government standing in the way of progress. To say that restaurants can not open because there are no workers is just saying that restaurant owners do not want to pay reasonable wages. Either give the workers a raise, or pool into some fund that builds affordable housing. Don't cry that "government" needs to do more when business owners have the ability solve the problem themselves. As a business owner, government will listen to you more than it will listen to a single employee, so demand that regulations are not standing in the way of building affordable housing.

Mark
Thu, 05/31/2018 - 6:44pm

That makes sense,, however if restaurants, hotels, and resorts keep rasing prices to compensate for higher wages, many tourist might just not come.

Te
Thu, 05/31/2018 - 9:30am

My son and his wife lived in Traverse City in an apartment that was about $900 a month and within a year it went up to $1,500. The girl in this story for that area found a buy in $900 in town for rent.

Mark
Thu, 05/31/2018 - 6:39pm

Small town charm??? Are you kidding me?
Traverse City lost that 25 years ago. I've always believed that tc is a tourist town, and unfortunately those jobs just don't pay enough to be able to afford housing

Steve
Thu, 05/31/2018 - 7:06pm

Just returned to my hometown, Petoskey, and it is just as bad. What is for rent is unaffordable and disgusting, delapatated, unsanitary, and most would not pass a health and comfort inspection. Now for the unsavory characters renting these s**t holes for some fast cash at the expense of people struggling to make ends meet... Like they say, "You can never go home," it's turned into a cesspool.

Maguire
Fri, 06/01/2018 - 10:05am

As someone who moved here for education and work purposes, it is immensely difficult to find affordable housing anywhere. Forcing people to look outside of Traverse City increase the vehicles on the road, and further deteriorates the already abysmal conditions of our roads. Combine that with how bad the roads are in the winter and increased costs associated with being a vehicle owner, this is not easy for anybody making under 35K a year, which I imagine is most in Traverse City. More needs to be done to help with housing. More and more young people are moving away to larger cities and other states for the simple fact of a lower cost of living. Though I will give credit to the growing BATA system, this helps a little bit, but unless we can sort out the high cost of renting in Traverse City, more and more talent is going to be lost to lower cost options elsewhere.

Matt
Mon, 06/04/2018 - 7:46am

Nothing new. This is repeated over and over across the country. A bunch of demand then the local do gooders clamp down on building so the supply dwindles. The Law of supply and demand always wins and gives choices but we may not like them.

JD
Thu, 06/07/2018 - 10:38am

I look forward to Mayor Carruthers's proposal for solving homelessness in Traverse City.

Jim Carruthers
Fri, 06/08/2018 - 11:33am

Thanks for asking. Here’s a project the Traverse City Housing Commission is working on now. Working to convert an old hotel into affordable units. Affordable Housing isn’t just localized in TC. Many cities all over this state an this country are working to offer options and TC is trying to be proactive.

https://www.google.com/amp/s/www.traverseticker.com/amp/news/city-housin...

Pat Kellogg
Thu, 06/07/2018 - 3:57pm

I had "affordable" housing in a TC mobile home park for the last 14yrs. It is a very nice mobile in a park convenient to everything. I paid cash for the mobile, and only had to worry about lot rent & utilities in my retirement. The airport expansion has left the park looking like a war zone, leaving nothing but tree stumps for many. No one will get much in resale. I'm selling mine this summer & relocating downstate. Can't afford to live here any more.