Ferndale Adopts Requirement for Affordable Housing in New Developments

Ferndale, MI – The City of Ferndale adopted an inclusive housing policy Monday night that requires developers building with 25 or more units to reserve 25% of the units for affordable housing.  The requirement applies to future projects, not ones currently under construction.  It also applies only to those that involve city-owned land or tax incentives.

“The history of Ferndale is the story of working class people putting down roots and being successful. In a time of rapidly rising real estate values, it’s important that people of all income levels still have that opportunity. There continues to be great interest in creating new housing in Ferndale, and this policy is our attempt to make sure it reflects that diversity,” said Mayor Dave Coulter.

A memo to council from City Planner Justin Lyons explains the history and details.  “Over the past year, City Council requested staff explore an inclusive housing policy to help ensure future housing developments incorporate units that are affordable to a variety of  residents and  income levels in  the City,” Lyons wrote.

“The idea behind inclusive housing  is that a typical household should not spend more than 30% of  its  income  on  housing  (rent  or  mortgage),  because  it  limits  resources  for  other  needs,  such  as  food,   clothing,  transportation, etc. Planning for future and existing housing was a key portion of the City’s recent Master Plan update and creating a plan for inclusive housing was a specific action item in the plan.”

The city held a workshop in May to discuss possibilities for this ordinance and came up with a recommended policy that “For  any  City -owned   or  City -acquired  land   proposed  for  multiple  family   housing  that   would  be  25  units  or  larger,  25 %  of  the  units  be  set  aside  for  inclusive  housing.

The  25%   would  be  made  up  of  the  current   area  median  income  (AMI  $56,142  gross )  at  the  percentages   listed  below.

-10% of units equal to or less than 80% AMI ($44,914)

-10% of units equal to or less than 60% AMI ($33,685)

-5% of units  equal to or  less than 50% AMI ($28,071)

Also included are stipulations to maintain the inclusive housing for 30 years.

“If a housing project fails to perform as agreed -upon, the applicant would be subject to  a fee of  $500.00 per unit per day for each day that the owner is in noncompliance.  The penalty would be deposited in the payment in lieu of inclusive housing fund,” and “The sale of any rental inclusive housing unit that would be converted to an owner-occupied condo minimum unit prior to 30 years would be subject to a $50,000 recapture fee.

AMI and penalties would be adjusted annually based on the Detroit -Warren -Dearborn  Metropolitan Statistical Area (MSA) median income in the most recent United States Census.

Mayor Pro Tem Melanie Piana stated “This policy is making sure the people who take care of us can stay in the community they love I personally had a sense of urgency to get the policy because of the new developments being proposed. A community where all income levels can afford to live is an inclusive community.”

Coulter said this is likely the first time a city of Ferndale’s size has adopted an inclusive housing policy in Michigan.