Paying the Rent in Paradise

What it costs to live, work, and rent in northern Michigan.

By Todd VanSickle | July 27, 2019

Faith Mulholland is a single mother who is an assistant manager at Wendy’s in Interlochen. Her commute to work is about 10 minutes from Grawn, where she pays $650 a month for a two-bedroom manufactured home, but she hasn’t always been so fortunate.
 
“The trailer is about as old as I am,” Mulholland said. “But it’s worth it to be closer to work. … If I was to move back to Mancelona or Kalkaska, what I would be saving on rent, I’d be spending on gas getting to work.”
 
Almost all of her coworkers commute a long distance to get to work. For the most part, they can’t find affordable housing in Traverse City.
 
Prior to working at Wendy’s, Mulholland worked at McDonalds in Acme, and still found it financially difficult.
 
“The situation was ridiculous,” she said. “I wasn’t even making enough money to make the drive from Grawn to Acme to support myself. I decided enough is enough, and I got a job at Wendy’s making more money, and I’m closer to work.”
 
Mulholland’s situation isn’t unique. According to the Housing and Transportation Index, Grand Traverse County residents spend 28 percent on housing and 27 percent on transportation for a total of 55 percent of their income. Boyne City residents spend a total of 54 percent of their income for housing (26 percent) and transportation (28 percent), while Kalkaska residents spend 18 percent on housing and 25 percent on transportation for a total of 43 percent of their income.
 
Mulholland’s situation was even worse four years ago, when she was living at home with her ailing parents in Mancelona. At the time, she decided to work in Traverse City because the pay was better. But when it came time to move, she struggled for years to find affordable housing close to her job. She considered low-income housing but found herself on a long wait list.
 
“That list is like a couple years long,” Mulholland said. “And they really aren’t places you want to live. They are drug pits. God knows what is going in those places.”
 
Mulholland is like many others in northern Michigan who have struggled to find affordable housing as wages remain stagnant, and rent and home prices continue to rise. And Traverse City is not the only community that is grappling with the situation.
 
IT’S THE ECONOMY, STUPID
Traverse City Housing Commission Executive Director Tony Lentych said the shortage and cost of housing all over the region is a “significant problem.”
 
He said it is a “structural problem with how our economy works.” Traverse City and other northern Michigan communities rely on two economic engines: tourism and agriculture. Most often, these areas of the economy set costs and prices for things like food and lodging based on other markets and how the area is perceived.
 
“What people will pay is largely based on a function of a market elsewhere,” Lentych said. “This often translates to the inability to pay a wage that fits our local housing market.”
 
To compound the situation, the housing market is often set by people who are not necessarily participating in those two areas of the economy.
 
“They are often attracted here by those two parts of the economy, but they are usually retirees or investors,” Lentych said.
 
He added that a large portion of these properties are used exclusively as vacation homes or rented on a short-term basis through services like Airbnb, which raises the cost of rent for short- and longer-term stays and the price of real estate.
 
“That is what you call a market failure in economics,” he said. “The supply and demand is not meeting the needs of the local economy.”
 
So what’s keeping builders and investors from capitalizing on the market’s need by building more affordable housing?
 
Lentych said it’s a complicated question.
 
“Builders are building high-end homes and condos — that’s where the market is at,” Lentych said. “I don’t blame them — that is what is natural for them.”
 
Obviously, he said, high-end homes and condos are not solving the housing problem.
 
GROWING PAINS
According to the 2010–2016 American Community Survey, seasonal housing growth outpaced all housing in the region, with the exception of Emmet County, which experienced only 1 percent growth for all housing and -3 percent for seasonal housing. In Grand Traverse County, seasonal housing growth was the largest in the region, with 16 percent growth but only 3percent growth for all housing.
 
In 2016, the estimated median value of a Traverse City house or condo was about $241,722. In 2000, it was $123,800. The average for the state is about $147,100.
 
In Traverse City, there are about 7,645 houses. Of those homes, 6,867 are occupied: 4,298 owner-occupied and 2,573 renter-occupied, according to City Data.
 
Lentych has served as the Traverse City Housing Commission Executive Director for the past four years. Since taking the job, there has been a conscious decision to do something about the current housing situation, he said.
 
One of the projects that the commission has taken on: East Bay Flats, a 67-unit workforce housing project about two miles east of Traverse City’s downtown.
 
“It has a target market of people who make about $17 bucks an hour,” Lentych said. “There are just not enough of those [types of] units.”
 
He said there is a “huge market” for people who want to rent for about $600 to $700 a month.
 
“That is what they can afford; that is what they are comfortable with,” Lentych said. “And they are indifferent to what it’s like. We had a few units at East Bay flats just over 300 square feet for $695 a month — and we have a wait list for them.”
 
According to Networks Northwest, the median rent in Grand Traverse County is $872. Leelanau County is $865 per month; Emmet County is $774; Manistee is $619; Kalkaska is $692; Antrim is $699 and Wexford is $718.
 
In Kings Court, a manufactured home community near South Airport Road, about 4 miles southwest of downtown Traverse City, a 1,600-square-foot manufactured home rents for $1,449 a month. There is also a $500 move-in fee that covers the security deposit and a closing fee.
 
As expected, apartment complexes in the area have waiting lists.
 
Lake Pointe Village Apartments in Traverse City receives requests for rentals daily, but hopeful renters experience an average three-month waiting period. In fact, the only Lake Pointe apartment available when Northern Express enquired was a two-bedroom unit; it won’t be ready until September.

According to the property manager, Susan Tompkins, when a unit does become available at the 260-unit apartment complex, it will be offered to the next person on the complex’s wait list. The cost of rent ranges from $860 to more than $1,300 per month, depending on the apartment’s size and what updates have been done. Waiting out the waiting list is only the first hurdle. Renters are approved if they pass a credit check, and they must earn three times the amount of the rent in a month.
 
“The workforce people are the ones having the issues. They are the ones coming to us the most,” Tompkins said.
 
The median household income for Grand Traverse County is $55,597; Leelanau is $59,018; Emmet County is $51,096; Antrim is $50,803, Charlevoix is $48,694, Kalkaska is $42,612 and Manistee is $42,530, according to Networks Northwest.
 
Lentcyh said officials must actively pursue ways to create more affordable housing in their communities if they are going to solve the problem.

BOYNE CITY FOCUS
In Boyne City, Michelle Cortright sits on the Boyne Area Chamber of Commerce board and is part of the Boyne Housing Solutions group.
 
“[The chamber] did some strategic planning, and we came up with areas that we were going to focus on,” she said. “One of the areas was a community forum and the No. 1 goal was to find housing. Out of that initiative came the Boyne Housing Solutions.”
 
The group meets about every two to three weeks to “keep moving the needle ahead” on housing issues, according Cortright, who added that there have been five to six forums held so far. The educational topics have featured speakers from the local land bank, as well as area developers.
 
“We are making progress,” Cortright said. “Word is out about what we are doing here. Check back with us in five months.”
 
In the fall, a new project, Lofts on Lake Street, will break ground in Boyne City. Cortright is optimistic that the project, which will offer 46 income-adjusted units, will make a difference in the community.
 
“It’s downtown, and people will be able to walk to work. It is not subsidized; it’s based upon income,” Cortright said. “All of us middle-class people are struggling. We are a resort community, and the housing is taken up by Airbnb and VRBO. The owners can get a lot more money doing that than renting to the middle class.”
 
Cortright. also the owner of Harbor House Publishers, has experienced firsthand how the shortage of affordable housing challenges not only working-class employees but also employers.
 
“I no longer interview people from outside of the area, because I would make a job offer, and they wouldn’t be able to find a place to live,” Cortright said. “I no longer can bring people in. I know of an employer in town who has 89 positions available — they can’t find the workforce; the workforce can’t find the housing. It’s a horrible situation.”
 
Charlevoix County ranks fourth in the region’s employment rates, with 731 employers and 8,652 jobs. Grand Traverse County is by far the leader when it comes to employment, with 45,408 jobs and 3,244 employers, while Emmet County is second in the region, with 15,220 jobs and 1,344 employers, according to Networks Northwest.
 
VICTORIAN MANISTEE’S STRUGGLE
Even areas with less developed downtowns and waterfronts, like Manistee, aren’t exempt from the affordable housing crisis.
 
There are 2,758 occupied housing units in the city of Manistee. Of those, 1,727, or 62.6 percent, are owner-occupied, while 1,031, or 38.4 percent, are renter-occupied. The average home value in the city is $146,592, compared with $175,084 in Manistee County. Unlike many of the waterside towns on northern Michigan’s West Coast, there isn’t a significant amount of even high-end residences being built; 77 percent of the houses in the city were built before 1980, while nearly 41 percent were built before 1940, according to the Census Bureau.
 
Recently, Manistee officials held a public meeting to inform residents and officials about housing facts and issues there. The Housing Matters presentation attracted about 50 people from the community and was conducted by Sarah Lucas from Housing North.
 
“We definitely need more housing options for everyone,” said Manistee Area Chamber of Commerce President Stacie Bytwork, who attended the meeting. “We are currently working with developers trying to bring more housing opportunities here. That is something we are currently actively working on and looking at a bunch of potential state programs to help increase that.”
 
According to the 2014 report Framework for Our Future: A Regional Prosperity Plan for Northwest Michigan, rentals in Manistee County are unaffordable for the average renter; and extremely low-income households — those earning $20,000 or less per year — confront shortages of rentals that they can afford, forcing them to rent more expensive homes and in turn reduce the availability of affordable housing for other income groups. With about 900 rental households in this income range, only about 550 of the county’s rentals are affordable to those households. Housing agencies report long waiting lists and wait times for those seeking housing assistance from rental voucher programs.

BOOMER HOUSING A BUST, TOO
Lentych said it’s not only the working force and low-income renters that are finding housing markets around the North challenging but also retirees.

“The Baby Boomer generation is retiring at massive amounts,” said the Traverse City Housing Commission Executive Director.

He added that retirement has changed dramatically in the last 30 years, with less people receiving pensions and not as many saving as much money for their Golden Years.

“If we want to address something, we should address senior housing,” Lentych said. “If we can help get seniors out of their current homes that are too large for them and too much of a burden. And give them a really great place to live, those homes would be open to young families.” 

But he acknowledges the price of those homes would most likely still be out of reach of many homebuyers or renters. 

“You have to ask yourself, is that because of scarcity or is that the way it is here,” Lentych said. “I am sure it is a combination of both, but we don’t really know for sure. One of those two things is very fragile. That is what everyone is always afraid of: ‘How is it going to affect my price point?’ They don’t want to lose their investment.”

Overall, he said the Traverse City area is in a good position.

“We have problems, but they are good problems,” Lentych said. “There are communities out there that don’t know what to do to even start. … We could have it all here. We have a desirable place to live, plenty of nature and beauty. And, we have a potential workforce that can do all kinds of diverse work. It wouldn’t be hard to make room for everything.”