Closing the Housing Gap in Frankfort

The Frankfort Area Community Land Trust moves to phase two of its first development

By Anna Faller | June 1, 2024

It’s no secret that finding affordable housing is an increasing issue in northern Michigan. In fact, housing nonprofit Housing North estimates a regional gap of more than 30,000 units in the next five years. It’s a big gap, and the Frankfort Area Community Land Trust (FACLT) is determined to help close it.

Formed in 2021, FACLT is a nonprofit created by the City of Frankfort as a tool to promote housing accessibility for year-round tenants in Benzie County.

“Northern Michigan is such a beautiful place, but we feel so much constraint, especially in the summertime,” says FACLT Relationships Committee Co-Chair Tim Jones. “We wanted to [find a way] for more people to work and also be able to live here.”

A Community Land Trust (CLT) is a nonprofit organization that buys and owns land on behalf of a community to promote sustainable development and housing accessibility. When an individual or family buys a home that’s part of a CLT, you own the building, but the trust owns the land. This makes the purchase of that house more affordable, as buyers don’t have the additional cost of the parcel it sits on to consider. Instead, homeowners lease the land from the trust—usually on a long-term basis—which they or their family can choose to renew.

If a homeowner elects to sell their CLT space, they agree to do so at a restricted price. In the case of FACLT, owners must sell their home at 75 percent of its appraised value—a portion of which goes back to the trust—to a person or family making less than 120 percent of the county’s area median income (AMI). By adhering to this framework, says Jones, CLTs keep their properties accessible for future tenants.

“It’s really about ensuring that the [homes] remain affordable,” he adds.

Not-So-Affordable Housing

In northern Michigan’s tourist-driven communities, though, that’s a big ask.

According to Housing North’s 2023 Housing Needs Assessment (HNA), which studied housing demand trends in northern Michigan through 2027, Benzie County’s overall housing gap clocks in at a whopping 1,508 needed units, the overwhelming majority of which fall under the “for-sale” umbrella. Further, more than 60 percent of that shortage represents households earning at or below the county’s median income.

In other words, it’s never been harder to live in northern Michigan on a “middle-class” salary. But how did things get so dire?

Availability, for one, is an issue. As the same study revealed, just 64 percent of Benzie County homes are occupied (both by owners and renters, respectively). That sounds like a promising figure, right? Here’s the catch: of the estimated 36 percent of local vacancies, almost all are considered seasonal or recreational units. (Read: summer houses and Airbnbs.)

As Jones points out, this poses a serious challenge for maintaining year-round infrastructure like emergency services, shops, and schools, which are nearly impossible to operate when there’s not enough space to put everybody.

There’s also a clear disjoint between workers’ wages and home purchase prices. In Benzie County alone, three-quarters of homes for sale are listed at upwards of $300,000, while the AMI barely scratches the surface of $60,000. This pushes many homes out of reach for most of the local labor force—especially those in service sectors like hospitality, administration, and healthcare.

“When you look at those entry-level salaries in the $40,000 and $50,000 range, you can see how it would be difficult for those people to afford housing,” FACLT Executive Director Annette Knowles explains.

Meeting in the Middle

To address this issue, FACLT has set their sights on cultivating a home ownership model geared towards Benzie County’s ever-dwindling middle. “We’re looking at those folks who are moving beyond a rental situation and into entry-level homes that aren’t priced out of their range,” Knowles says.

Per Jones, the first step is land accrual, which FACLT has facilitated through a combo of public and private backing. Sources range from nonprofit groups, like The Dow Company and Father Lovett Foundation; to a handful of initial investors including FACLT president, Jay White; to collaboration with local businesses, as well as federally-funded aid and support from the state and City of Frankfort.

Knowles also stresses that community action has been instrumental to FACLT’s growth.

“We’re very localized at the moment. We’re not out there banging down doors, per se, asking for people to help our work,” she says. Instead, the bulk of the group’s outreach takes place through what she calls “quiet recruitment” through referrals from other board members, word of mouth, and outreach from passionate locals.

Still, developable land is a hot commodity. The challenge, says Knowles, is not only choosing properties that will appeal to potential buyers, but also doing so in a way that adheres to local income benchmarks.

“It’s a delicate balance, so we have to be very judicious about how we move forward with prospective projects,” she notes.

Grove Place

The first of these projects, a four-unit development called Grove Place, is already past the halfway point.

“The concept with these four houses was to see how affordable we could keep them, while still using high-quality materials and construction. [The hope] was that we could use them as models to see if they could be replicable in other parts of the city,” says Jones.

The build began in spring 2023, when the trust acquired a one-acre parcel on Grove Place along Frankfort’s eastern edge. The first two homes, which took about six months to build, were finished that August and had occupants in a matter of weeks. Fast-forward to today, and work on the second and final pair is now underway, with FACLT estimating a completion date of early September.

Each unit features a 1,176-square-foot layout, complete with a quarter-acre lot and panelized components, custom created by Amish outdoor company Weaver Barns of Ohio. Inside, there are three bedrooms and two bathrooms, plus a kitchen, living space, and full suite of appliances.

Knowles says the goal was to offer homes that would truly be move-in ready. “We thought that [fronting] the cost of those furnishings would be added value for our home-buyers,” she says.

The cherry on top is the price tag, which, at just over $200,000 per unit, is about half the cost of similar properties.

To be eligible for ownership, buyers must meet specific criteria, which the group has implemented through partnership with the Northwest Michigan Community Action Agency (NMCAA): 1. Applicants must live and work in Benzie County; 2. Their annual income must fall between 60 and 120 percent of the county’s 2023 AMI, and; 3. They must attend a Homebuyer Education Workshop and two pre- and post-purchase coaching sessions with the NMCAA Homeownership Center.

Jones says local demand is high. “There are people who would like to purchase already in the pipeline. We’d love it if we were Oprah and could just give everyone a house!” he says with a laugh.

Looking Forward

As for FACLT’s future endeavors? Nothing’s set in stone just yet, but Jones hints to Northern Express that several projects are already in the works.

One of those is a two-and-a-half-acre property donated from the city of Frankfort, which FACLT has earmarked for a 12 to 16-unit development. Reconfiguring larger houses is also on the docket, per Jones, which he envisions as a possible solution to much-needed senior living additions. There are even talks of building rental units with nonprofit HomeStretch Nonprofit Housing.

From a long-term lens, though, it’s all about securing the resources needed to make real change. “Satisfying needs in the community is a lengthy process. It’s seeking out funders, homebuyers, and appropriate space—all of these parts need attention,” Knowles says.

Of those resources, Jones underscores community support as paramount.

“As an organization, I think we’ve got the growth in place to achieve those things,” he adds. “We’ll always be fundraising, and we’re always happy to have more people that are interested in the mission.”

For more information on the Frankfort Area Community Land Trust, visit frankfortlandtrust.org. If you’re interested in Grove Place housing, pre-screening forms can be accessed on the FACLT website, or by contacting the Benzie County branch of NMCAA. (231) 947-3780. nmcaa.net