Affordable Housing Premiums and Premium Evaluation in Ann Arbor

In discussions about affordable housing in Ann Arbor [which typically means housing affordable to ppl making less than 60% Area Median Income or AMI], I fairly often see folks lamenting that we do not make/ incentivize developers to create affordable housing units.

Some of these folks argue that what works is allowing developers to build additional height if they make a percentage of the development affordable to ppl making less than 60% AMI or they donate a certain amount of dollars to our “Affordable Housing Fund.”

Some are citing recent developments like the Garnet, and the one at Glen/Ann as examples of how this affordable housing height premium policy has been a success.

Unfortunately, when we look at the empirical data of the last 20 years of development history, we see very few instances of affordable housing premiums being used by developers.

Here is a link to the city page with lots of data about premiums in general. I had no idea before looking at this page that we had so many more “residential premiums” than affordable housing premiums.

https://www.a2gov.org/departments/planning/Pages/UDC-Premiums-Evaluation.aspx?

Here is a link to the full report from which I screenshot the slide you see below:

https://www.a2gov.org/departments/planning/Documents/Initiatives/Premium%20Evaluation%202023-02-07%20Report%20Review%20and%20Analysis.pdf?

What do we do to get more affordable housing built in our community? Direct investment in affordable housing construction is one way. We already have an affordable housing millage passed in 2020, which has a few projects in the pipeline. But as good as those projects are, it is not enough.

We have a housing shortage in our city due in part to the expansive growth of student enrollment at UM as well as a large increase in the number of workers the university employs. UM has plans to build more student housing and are also considering building “workforce housing.” We could mount a pressure campaign to push UM to start a “payment in lieu of taxes” [PILOT] program on all the properties they have acquired [think the old Pfizer compound which not only employed a lot of people, also paid a large amount of property taxes to the city].

We also have a housing shortage in our city due to a decades long history of restrictive zoning policies. 70% of our residential areas are zoned for exclusively single-family homes, which is one way our housing supply is restricted. More on that in future posts.

Thanks for reading. We wouldn’t be here if you hadn’t been there