MML#3 -Local Leaders Learn Tools to Encourage More Housing
(Crystal A. Proxmire, April 9, 2025)
Lansing, MI -Sometimes it takes an issue impacting someone directly for them to realize it’s a problem.
For City of Frankfort Supervisor Jack Mills, the topic of Michigan’s housing shortage really hit home, he said, when “I struggled to find a home in the town I was raised in.”
Frankfort is a small Lake Michigan town, near Traverse City, with a population of 1,252 that booms to over 5,000 in the summertime with cottage residents and visitors.
Housing shortages are a concern in many communities as people live longer and live alone at lesser rates. The proliferation of short-term-rentals also means fewer homes on the market for residents. In many places job growth is out-pacing available housing. Statewide there is one new home being built for every 14 new jobs created.
And in tourist towns like Frankfort the competition doesn’t just impact residents, but the small businesses that need seasonal employees who cannot afford to live nearby. Mills said that some businesses were even buying housing so their employees had a place to stay during the busy season, but that certainly wasn’t a solution for everyone.
Mills was among presenters at the recent Michigan Municipal League Capital Conference. The session was packed with elected officials and administrators from cities large and small looking for housing solutions.
He outlined some of the challenges, including the cost of construction, the cost and availability of land, taxes, the cost of living increasing faster than wages, and of course NIMBYism. The challenge of people not wanting new construction to happen near them is so prevalent that it’s got it’s own acronym – Not In My Backyard.
Addressing housing in Frankfort meant getting residents on board and overcoming the resistance. The City worked with Great Lakes Housing Services to come up with solutions and have community conversations. Mills said that zoning ordinances were changed, but with context that nodded back to history. “Our inspiration for our zoning ordinance today was 1821 Frankfort – the mixed use, the carriage house.”
The City began allowing Accessory Dwelling Units (ADUs), and touting them as a pathway for residents to be more creative with their properties. Adding on small living quarters helps property owners bring in extra revenue while also being part of the housing solution for the whole community. ADUs can be rentals, or they can be places for elderly parents or adult children. “Families are taking care of families,” he said.
Community leaders also wanted to proactively attract investment. However because of the challenges, attracting investors is difficult. So they aimed to fund it themselves.
In 2019 the Frankfort Housing Commission was created, and in 2021 the Frankfort Area Community Land Trust was established.
Among their efforts is a CD program where people who want to help support housing efforts can deposit at least $10,000 and keep in the bank for a year to earn 3.75%. The Land Trust borrows against that fund. The trust can also accept donations.
So far they’ve added 100 units to the community.
Land banks and trusts can be a great way to fund projects, and in some cases there may already be a county land bank that one can work with.
Another solution was permitting campers and trailers for seasonal employees. They have even begun looking at purchasing a barge that could be converted into workforce housing.
Mills is also excited by new legislation that helps support housing investments. Trudy Galla, Senior Brownfield Specialist at the consulting firm Fishbeck was also on hand to talk about housing, focusing on legislative updates communities could explore.
The Brownfield Redevelopment Financing Act of 1996 was amended in 2023 to including housing. Eligible properties include those that have been contaminated, are functionally obsolete, blighted, or historic as well as those which are located at a transit hub, those which are housing, or those owned by a land bank.
Brownfield funding can be used for environmental cleanup costs, temporary relocation of residents for up to a year for construction work, acquiring blighted or obsolete rental units to rehabilitate, and attorney fees.
In order to use Brownfield funds for housing needs, the local community must have a documented housing plan. This can most easily be accomplished with a Master Plan that details housing needs.
The Brownfield Authority can make loans that are repaid with Tax Capture on the increase in property taxes of the improved property, and the incoming TIF money can use on future developments. The Tax Capture, known as a TIF, is the difference between the pre-development property tax and the post-development property tax.
For example if the pre-development tax is 1,000 and the post-development property tax is 9,000, then the local taxing bodies still get the $1,000 but the $9,000 goes to the TIF to be reinvested. The Tax Capture can last for up to 30 years. After that taxes go back to their normal distribution.
Another option is to offer incentives to developers such as Payment in Lieu of Taxes. PILOT defers taxes on the developer, essentially having local taxpayers subsidizing the development with the benefit of it happening in their community.
If PILOT is used, there are requirements that certain percentages of the housing are deemed affordable based on the income of residents. If this is done on a rental property, resident income and rents must be verified each year. If it is done for an owned house, the verification only happens at move in.
Galla suggested that local officials consult an expert to make sure that incentives are set up properly in line with the law.
More info:
Frankfort Community Land Trust
MSHDA TIF Housing Program Info
This story is part of a series of stories from the Michigan Municipal League Capital Conference which took place in Lansing on March 18-19. Learn more about MML at https://mml.org/. Read more Oakland County Times stories from MML trainings and conferences here.
