Arbor Update

Ann Arbor Area Community News

A2 Council to hear two affordable housing cash-outs

21. November 2004 • Murph
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Earlier this Fall, the City Council approved a measure to reduce the requirement that developments in PUD zones (Planned Unit Development) make 20% of housing units “affordable”. The new requirement allows developers to pay into the city’s affordable housing trust fund instead of providing the units, with the city to use the money to subsidize affordable housing construction.

On Monday, 22 November, the City Council will hear two petitions from PUD developments hoping to modify their already-approved projects, and will hold public hearings on those petitions. The developers would like to add the new cash-out option to their existing approvals. The change would eliminate up to seven affordable units, 2 in the 1310 S. Main condo development and up to 5 in the Kingsley Lane development, and add up to $270,000 to the city’s housing fund.

Mayor Hieftje told urban planning students, before the election, that he supported the buy-out option as a way to provide the most affordable housing at the lowest cost, noting that the trust fund was more flexible, and could be applied towards the most cost-effective housing possible, rather than requiring developers to include the affordable housing—and possibly scaring off the developers with the cost of those units. Both of the petitioners to be heard on Monday have cited unexpected financial difficulties as the reason they are seeking the buy-out option.

More info on the proposals is available in the minutes from the Planning Commission meetings at which the proposals were first heard. The minutes can be read in the Council packet for Monday’s meeting (warning: a 234-page pdf). The proposals are items D-4 and D-5 on the agenda.

  1. My schedule is cloistered today, but I’m seriously considering getting down there tonight and speaking at the public hearings. It would be best if I was not the only one doing so.

    This situation reinforces the fact that the city housing fund idea is nothing more than an ‘easy out’ for developers. Both cite ‘financial difficulties’ for their request. If the contribution to the fund was in any way equitable to the value of the construction and the housing itself, they wouldn’t be so willing to do it. But it’s just like the insurance payout business: Why do manufacturers continue to produce defective auto parts? Because it’s cheaper to pay the lawsuits than to refit the assembly lines and do a recall. This is the same situation.
       —Marc R.    Nov. 22 '04 - 04:29PM    #
  2. To play devil’s advocate, Marc, couldn’t it be argued that if a developer “cashed-out” of providing the affordable housing in a luxury downtown condo building, it could result in more affordable units built on cheaper land in other parts of the city, thus creating a greater net social benefit? On the other hand, as far as equity goes living on the city’s edges is not equal to living in its central area in terms of accessibility.
       —Brandon    Nov. 22 '04 - 06:02PM    #
  3. And this, of course, is why we need good, comprehensive transit and satellite activity centers at points around town so that living away from downtown is not a negative in terms of access to jobs/basic goods…
       —Murph    Nov. 22 '04 - 07:31PM    #
  4. Agreed again. Though the center being the center, it will probably always be preferable in terms of nonbasic goods, culture, and architecture, for better or worse.
       —Brandon    Nov. 22 '04 - 08:38PM    #