If we build housing, economic development will come

What comes first – employees or homes? Government and business leaders in the Great Lakes Bay Region are working together to try to answer that riddle.

One thing all the experts agree on – we cannot grow in population or attract new businesses if we don’t increase the number of homes available in the area. Another point everyone agrees on is that the “missing middle” housing is key to growth.

The missing middle includes single-family homes, townhouses, and duplexes. Families who need the missing middle homes are those who earn between 60% and 120% of the median household income.

In Bay County, the median household income was $57,887 in 2022, according to Data USA. That means families earning between about $35,000 and $70,000 don’t have enough housing options in this area.

As the region considers what it needs to do to grow, the Great Lakes Bay Regional Alliance convened the Great Lakes Bay Regional Housing Summit at Saginaw Valley State University on Fri., Jan. 26 to talk about successes and where we go from here.
Amy Hovey is the executive director of MSHDA.
Amy Hovey, Executive Director of the Michigan State Housing Development Authority and the keynote speaker at the event, said housing is key to almost everything. Stable housing would do much to alleviate many of the issues people in the state face, including mental and physical health challenges, gaps in education, and a lack of childcare.

“We have to start with housing,” Hovey said. “We can’t achieve any of those goals if people don’t have a stable, safe place to live. You don’t need childcare if you don’t have a home. Research shows kids have a higher educational attainment when they stay in the same district, when they stay in the same home. 

One step toward addressing the problem is considering what’s working in the region. Matthew Felan, Great Lakes Bay Regional Alliance President and CEO, explained at the summit that lack of housing is one of the challenges inhibiting growth in the region.

SVSU President George Grant Jr., who also serves on the Alliance Board of Directors, expanded on what Felan said. “This is an important topic,” he told the audience of about 300 people from businesses, nonprofits, schools, government, and economic development organizations in Bay, Midland, Isabella, and Saginaw counties. “How do we attract businesses and people? We know it’s a great region, but how do we get others to know it’s a great region?

Ken Horn, Executive Vice President of the Alliance, greeted the audience and explained the genesis for the event. As Horn travels the region and discusses the Alliance’s goal of growing the regional population by 40,000 people by 2040, he sees obstacles to the goal. (Click here to read more about Operation 40K.)

The obstacles include availability of childcare, transportation, and housing.  “Housing, by far, stood out among all the issues,” Horn says. “If we’re going to attract any kind of new industries, new businesses, where are the workers going to live? How do we accommodate them? It’s an issue we have to address together.”

During the summit, regional representatives explained what’s working. Horn said he hopes the leaders in the room are able to take the best ideas and implement them in new areas. 

Jenifer Acosta, of Acosta Real Estate & Development, spoke to the importance of missing middle housing.  Acosta has practical experience in developing housing for people in that middle income bracket. Acosta Real Estate and Development is behind The Times Lofts, The Davidson Building, The Legacy, and Drift. 
Jenifer Acosta, owner of Jenifer Acosta Development at The Legacy in Downtown Bay City.
In addition to the company she founded, Acosta also serves as Vice President of Real Estate Development at Renovare Development. Renovar is a woman-owned social impact real estate development company. It incorporates environmental, social, and governance in each project. The focus is on transformational projects.

Renovare is working with Housing Forward, a Midland Business Alliance program that advocates a data driven approach to housing. At the summit, Acosta said Renovare is involved in 300 housing units across the state with a collective value of $90 million. The projects are mixed use, meaning they incorporate housing and commercial space.

“We think like women when we develop,” she said. “We eat, sleep, and breathing housing and community building.” She said the housing crunch comes from a variety of factors. Acosta said about 72% of homes in Michigan are designed for traditional families consisting of two parents and a couple children. But only 20% of the families in Michigan live in that type of home. 

Hovey also cited that change in family size. While Michigan’s population has stagnated in recent years, families have changed. In the past, the average household was a little over four people. Now, the average household size is two people. 

Another factor squeezing the housing market is people owning vacation homes, Hovey said. That means some families spend only part of the year in each home, reducing what’s available. The number of short-term rentals also is on the rise, further reducing available homes.

Acosta said another problem is that good, alternative living options don’t exist for older people. That results in us staying in our single-family homes longer, keeping affordable homes off the market and out of reach for young families. 

When first-time homebuyers do find something in their price range, it often needs significant repairs. The cost of those repairs often puts the home out of reach. 

For those who want to rent, the picture isn’t much better. Rent is steadily rising. In Midland, the average rental cost $746 a month in 2018. Last year, the average monthly rent had risen to $1,510. At the same time, Midland has lost 2,800 rental units in the last decade.

“How are we welcoming people who want to live here?” Acosta asked. Instead, when we attract new businesses here, the new employees have to look for homes in surrounding communities while commuting to work. That leads to them feeling disconnected to the community and more likely to leave the area, Acosta said.
Broadway Lofts in Mount Pleasant
Addressing the problem is complex. Renovare offers technical assistance to developers. “Our end goal is to get more housing and help you be as successful as possible,” Acosta said. “In the end, we want more local investment and local developers.”

Trevor Keyes, President and CEO of Bay Future, said the area has been successfully recruiting new businesses. He pointed to SK SIltron CSS and Mersen USA as examples. Keyes highlighted one local developer - MDL Companies - that is launching housing projects in Bay County. 

MDL is developing rental housing in Auburn, near Valley Center Technology Park, said MDL Companies President/CEO Mike Loomis. Auburn Meadows will be visible from US-10 and Garfield Road.

Loomis said one thing that’s helped developers is the improved aesthetic appeal of our communities. He pointed specifically to improvements in Downtown Bay City, Uptown Bay City, and Downtown Mt. Pleasant. He believes these downtowns will attract younger people to the area.

Jim McBryde, President and CEO of Middle Michigan Development Corporation, which represents Isabella, Clare, Gladwin, and Osceola counties, pointed to Broadway Lofts in Downtown Mt. Pleasant as a success story in his region.

Broadway Lofts includes 38 apartments on the upper levels and 13,000 square feet of retail and office space on the ground floor. The success of Broadway Lofts shows that people in the area are ready to pay for quality housing. During the development of Broadway Lofts, he heard from naysayers that the market-rate apartments wouldn’t move. People would only rent the low-income units. 

The Housing Summit was held on Fri, Jan. 26.
“The opposite was true,” McBryde said. “We actually sold out of the market-rate units before the low-income. It showed me that we were right from the very beginning about the missing middle.”

During his presentation, McBryde pointed out Michelle Sponseller, Downtown Development Director for the City of Mt. Pleasant in the audience. He praised the city and Sponseller for working with developers to bring Broadway Lofts to life.

Horn introduced Saginaw Future and explained that Saginaw is the population base for the region. “When Saginaw grows, the region will grow,” Horn said. “We need to root Saginaw on to make the region grow.”

Saginaw Future highlighted its Bancroft and Eddy buildings. In each case, the buildings had been foreclosed on before being turned into housing. Today, a combined $7 million investment in the two properties netted 150 new housing units. 

Hovey, Executive Director of the Michigan State Housing Development Authority, praised the projects already under way. But Hovey also estimated that if we realize the goal of growing our population by 40,000 people by 2040, we’ll need to add about 30,000 homes.

That’s not an unrealistic goal. Hovey said tools exist in the state to help developers. She talked about state money that can fund government initiatives and developer costs.

One piece of legislation in the works now comes from Sen. Kristen McDonald Rivet, who was at the summit. Hovey said McDonald Rivet introduced Senate Bill 293, which allows the state to allocate Housing and Community Development to more areas. The fund, which was created 20 years ago, is only for low-income housing being created in downtown areas. There’s no money for folks in the middle income levels.

“That’s $50 million a year that I could put in missing middle,” Hovey said. “But without that bill getting passed, I am completely restricted.” The bill passed the State Senate, but is waiting for House approval.

No matter what happens at the state level, Hovey said we’re doing the right things in this area to set us on course for solving the problem. “I agree with everything every speaker had to say, which isn’t always the case everywhere I go, but you all got it going on,” Hovey said. 

“You’re moving in the right direction. You have the data, you’re looking at the data, you’re looking at the conversations that need to be had and you should be applauded for that. People are talking about the housing crisis. They are realizing these are important conversations. We need to continue to work together. We need to innovate and we need to look for new ways to approach an old problem.