Marquette County officials look for middle-income housing solutions

Affordable middle-income housing is a critical need to grow the workforce in U.P. communities.
Published: Apr. 4, 2022 at 3:46 PM EDT
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ISHPEMING, Mich. (WLUC) - Public officials in Marquette County are continuing to propose plans to provide more affordable middle-income housing.

It’s an increasingly critical need to sustain and grow the workforce in all communities, including Negaunee and Ishpeming.

“Unless they’re making a certain amount for household income, they may have trouble affording housing in our communities and being able to own versus rent,” said Ishpeming City Manager Craig Cugini.

Middle-income housing describes homes, generally for households with yearly incomes between $35,000 - $75,000. That is the U.P.’s primary population in need of housing.

Middle-income buyers don’t qualify for public housing options, but they cannot afford bigger market-rate properties, which private developers are most interested in building for a higher profit. Cugini says these developers are staying in lower Michigan, leaving the U.P. with few options for attainable middle-income homes. That leaves local governments looking for ways to build those houses. And Cugini says there’s an upfront cost.

Ishpeming plans to build and sell a new middle-income house this year. The city will fund the $199,000 construction cost and sell at a proposed $189,000.

“What you end up with is an appraisal gap,” Cugini explained. “It costs more to make the house than you can sell it for. No builder is going to come in and lose money on a build. And so, the appraisal gap is a huge concern for us.”

The Land Bank Authority will cover the $10,000 gap, which would otherwise be a loss for the city. In short, it is a game of building and selling houses to break even, so they can do it all again.

The CEO of the Lake Superior Community Partnership, Sarah Lucas, says finding ways to create this type of housing can boost the county economy.

“We hear regularly from businesses that one of the challenges they have in attracting workers to the community is the shortage of housing that is affordable to those workers,” Lucas said.

Last week, the cities of Ishpeming and Negaunee met jointly to learn more about solutions the Land Bank and Brownfield authorities can offer. These entities turn vacant properties into attainable ones and can finance gaps between a city’s budget and the cost to build a home.

“The Land Bank is looking at properties they own,” said Marquette County Finance manager Anne Giroux. “Properties that the company might get through taxable closure. Those kinds of spaces that are readily available to us at no cost that we could put these homes on.”

Negaunee’s City Manager, Nate Heffron, says that to get the problem under control, it takes collaboration and creativity.

“We can see what we’ve gotten with not working together,” Heffron said. “Now, we’re actually working together. We’re going to start seeing solutions come out of this.”

The hope: to start seeing solutions soon.

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