Forest Way Town-Homes: A workforce housing project on Mackinac Island
In May 2020 Housing North hosted a webinar titled “Local Housing Funds in Michigan”. One of the featured speakers was Stephanie McGreevy from the Mackinac Island Community Foundation “MICF”. She presented on a creative and first of its kind project on the island providing workforce housing on Mackinac Island. To access this presentation click here.
The process began in 2018 with the first step including an updated survey to identify the need and help focus the project. The study showed that the average household size on the island was two, the average age was 35 years old and the average income per year about $38,958.
After working with a developer and other project partners it was suggested to build 12-24 units of town-homes with the average size 1,000 square feet. The targeted income was $32,000 and above with the suggested rent of $650-800 per month. After running the number there was a $2. Million shortfall -subtracting the proposed rental income.
The next step was to find a location and raise the funding. Knowing over 80% of the Island is a State Park presented a challenge as there were very few 2-acre parcels available in close proximity to water and sewer.
Once a site was found and purchased, MICF and the City of Mackinac Island worked on pulling together the funding for the project and identifying resident selection criteria which included the following:
· Housing for people who work on the Island for at least 1,500 hours a year and live there for at least 11 months.
· Emergency responders and essential workers getting top priority for space.
· Applicants/residents shall not own any other developed residential property on Mackinac Island.
· Residents will be re-qualified every two (2) years.
How was this project financed?
The Mackinac Island Community Foundation donated nearly $435,000 to the project, including a $250,000 donation to help purchase the land in 2018. The initial funds came from the Richard and Jane Manoogian Historic Preservation and Open Spaces Fund administered by the foundation. The foundation also granted unrestricted and field of interest funds for true community impact. Without the Community Foundation’s help, the project may have struggled for funding, because workforce housing does not qualify for as much government assistance as low-income housing.
The City contributed $270,000 from general funds in 2020 and used a Capital Improvement Bond, $2,070,000. The terms for the Capital Improvement Bond were 15 years @ 2.700% through Huntington Public Capital Corporation. Partners for the project included Cinnaire, Oakwood Construction and the City of Mackinac Island.
The finished project
Forest Way Town-homes are now available for rent -A two-bedroom apartment will cost $850 a month and a three-bedroom will cost $1,050 a month. The security deposit is one month’s rent. Tenants sign a one-year contract, and when that expires, they will rent by the month without an eviction date. They are hoping for a June 2020 move in date.
The units were thoughtfully designed for the particular challenges of living on Mackinac Island with two mudrooms, one at each entrance for extra space to store winter gear. Other unique features include snowmobile-sized garages, and large pantries. There is a community manager, who works for KMG, the firm that manages the property. The project received approximately 20 applications, accepting 10. New applications are under consideration for the remaining two units.
The application process was created by the city to include a background check, credit screening, landlord verification, and employment verification. In May, the city approved a pet policy for Forest Way. It allows each unit to house either a dog or a cat, and Forest Way tenants must pay a refundable deposit of $400, along with $40 a month rent, in order to keep a pet.
Besides the additional 12 units that will be built in the future, the community foundation remain interested in affordable workforce housing and are planning for future projects.
Resources used by the Mackinac Island Community Foundation include the Aspen-Pritkin County Housing Authority, Chaplain Housing Trust and KMG Prestige.