Low-income housing plan pitched to Bedford Township

HDC Construction built 48 apartments for low-income residents in Hillsdale. More units are being built there.

TEMPERANCE - A Novi, Mich., developer has approached Bedford Township officials to ask for help in building as many as 90 homes and 240 apartments for lower-income residents on 90 acres across from the township's industrial park.

The proposal by HDC Construction Co. hinges on the township granting a tax break and rezoning the land to accommodate the development, options that didn't find many supporters last week among members of the township board.

Mike Jacobson, chief executive officer of HDC Construction Co., told board members that his firm has an option on the parcel along West Sterns Road, just west of the Ann Arbor Railroad tracks.

The company wants to build approximately 240 apartments on 20 acres and use an additional 10 acres for light industrial development. Most of the remaining land would be developed into approximately 90 single-family homes. One large section of wetlands on the north side of the property would be preserved, with construction staying clear of a major gas pipeline that traverses the land.

The key difference between what Mr. Jacobson is proposing and almost any other development in the township is that HDC intends to develop the land under rules set out by the 1986 Federal Low Income Housing Tax Credit Program.

Under the program, private developers provide the capital necessary to build housing affordable to those living on less than 60 percent of the community's median income. The median income in the county is $66,500; therefore, to qualify for the low-income units, a family of four would have to make less than $39,900.

The rents for the housing can be as much as half of what other market-rate rents in the township might be, Mr. Jacobson said, because his company would benefit from a combination of federal, state, and local tax credits and other incentives that make the project attractive. In order to qualify for the tax credits, at least 40 percent of the units must be occupied by those who qualify as low income.

Mr. Jacobson said a 1999 housing study of Bedford Township conducted by Michigan Gas identified a strong housing need for township residents earning between $25,000 and $45,000 per year.

A similar Michigan Gas study was conducted for Hillsdale County in 1998 and identified a similar deficiency in so called “affordable housing.” With tax abatements approved by the Hillsdale city council, Mr. Jacobson's firm built 48 apartments for low-income residents with rents about $150 per month less than similar market-rate units. The company recently started construction on another 48 units in Hillsdale and has a waiting list, Mr. Jacobson said.

The Michigan Gas study is what attracted HDC to Bedford Township, Mr. Jacobson said.

“As communities are learning about these programs, it takes some education. For the community, it's going to be a decision of whether it wants to address a need that was pretty clearly identified,” Mr. Jacobson said.

But while township board members listened intently to Mr. Jacobson's proposal, nearly all expressed reservations about whether it is needed and whether the township should pursue it.

Township treasurer Sherri Meyer said the same state rules that would allow Mr. Jacobson's firm to develop the land for use as “affordable” housing could apply to developers with which the township is more familiar.

“I'm concerned that we can't offer our developers anything like this,” Ms. Meyer said.

Trustees Joyce Hagen and Dennis Steinman said they have problems with the requirement that any occupant of the 90 homes that would be built would have to rent the home for at least 15 years before they had the option to purchase them. The renters, therefore, would build up no equity, even as the value of the home continued to rise.

“I'm not opposed to affordable housing, but I don't see this as a need in our community. I don't see it as an affordable home,” Mrs. Hagen said. “I'm not really happy with the [proposed] program.”

By far the biggest concern among board members, though, is the requested “payment in lieu of taxes” that Mr. Jacobson had proposed. Mr. Steinman, fellow Trustee Arnold Jennings, and clerk Bob Schockman chafed at the notion of establishing a special class of township residents that wouldn't pay their fair share of taxes to either the township or the local school system.

“The renters [in Mr. Jacobson's proposed project] would pay less than 30 percent of what anybody else would pay anywhere else in the township,” Mr. Jennings said. “My main concern is that we're asking the majority of our township residents to prop this up.”

Mr. Steinman said the proposal would put a further strain on what is now the busiest volunteer fire department countywide without “contributing to the community.”

Despite stating objections to some of its basic tenets, township board members didn't dismiss the proposal, however. Instead they said they want more time to study what was being put forward.

“I think we need more facts to make a calculated decision on whether this is a reasonable investment for our community,” Supervisor LaMar Frederick said. “There are many factors that need to be analyzed, including the payment in lieu of taxation. We have to look and see if that makes any sense.”