TRAVERSE CITY — Changes coming for an apartment building in Traverse City mean some tenants will eventually have to move.
East Bay Flats will become permanent supportive housing as part of Goodwill Northern Michigan’s efforts to create homes for the chronically homeless. Dan Buron, the nonprofit’s executive director, said the Low Income Housing Tax Credits required to make the project work financially will come with lower income limits.
Apartment listings show existing tenants couldn’t earn more than a limit ranging from $62,000 for one person, to $79,700 for a household of three. That’s about 89 percent of what Michigan State Housing Development Authority defined as the county’s Area Median Income for 2024.
Once the tax credits are in place in mid-2025 — the exact date is not yet certain — those limits will drop to 60 percent of Area Median Income, said Nora Dunlop, Goodwill Northern Michigan’s housing development director.
That’s $41,520 for one person in 2024, and $53,400 for three, according to MSHDA.
One tenant is trying to figure out his next move. Jayson Knapp said his latest attempt to renew his lease in late February resulted in a six-month extension because his income at the time was too high for the upcoming change.
That gave him more time in the one-bedroom apartment he’s lived in for a few years, one that’s within walking distance of his job. He worked at a second job at a warehouse until losing it recently.
East Bay Flats’ location is important to Knapp, since he can’t afford a vehicle at the moment, he said. He mostly walks or uses Bay Area Transportation Authority buses when he needs to go further.
Now, Knapp is weighing his options, including renegotiating his lease, he said — his lower income might fall below the approaching threshold. Moving away from Traverse City altogether is also on the table as he considers finding a new second job.
“It’s mostly the area itself,” he said. “Traverse City’s a little bit expensive. I’m thinking of moving to a different city.”
Knapp isn’t alone.
Traverse City-area resident Deborah Beason said her son is trying to move into a new apartment after being told he couldn’t renew his lease at East Bay Flats. Beason’s son moved there in 2023 from several states away, and now not only faces the cost of another move, but likely will pay a few hundred dollars more per month in rent afterward. Her son, who declined to be named, added that his search has been a long and frustrating one, filled with rejections or no response.
Beason said she’s all for helping people who are chronically homeless in any way possible.
“Somehow it doesn’t sit well to think, ‘OK, you’re yanking some people out when they’ve had a budget fixed around where they’re living, then putting people in?’ It’s just like robbing Peter to pay Paul,” she said.
Dunlop said no East Bay Flats tenant has been evicted – and all leases have been honored since the nonprofit took ownership of the apartments. Those seeking renewals would have to confirm their incomes fall below the lower threshold. If not, tenants can get a shorter extension or rent month-to-month.
The building had about 20 vacancies out of 67 units, Dunlop said. Plans to transition the property include using attrition as much as possible, and working with other tenants directly to help them find other options.
“We understand and hear that housing and navigating the rental market, especially in Traverse City, can be extraordinarily stressful,” Dunlop said. “It’s why we want to talk to people and talk it through, because we don’t want to displace anyone.”
Buron said that’ll include hiring someone who will be on-site to work with tenants for 40 hours a week, probably within the next 30 days.
Finding people housing is one of Goodwill Northern Michigan’s specialties, so the nonprofit can tap its experience in matching tenants with landlords, Buron said.
Finding an apartment in Traverse City can take a while, he acknowledged, adding that he thought it possible that a tenant struggling to find a new home could stay at East Bay Flats once the tax credits are in place. That “wouldn’t be ideal,” but Buron thought it would be unlikely as well.
“I think we’ll be able to find an option, a viable option for everyone who’s there,” he said.
Originally converted in 2019 by Traverse City Housing Commission and investor Michigan Community Capital, the former hotel aimed to fill in a gap between market rates and typical affordable housing for which people earning more than 60 percent of area median income usually don’t qualify.
Goodwill Northern Michigan bought the property in November 2023, securing a payment-in-lieu-of-taxes agreement from Traverse City.
Then, on May 6, city commissioners unanimously agreed to pay $360,000 for a service agreement so the nonprofit could jumpstart its plans to house people who are chronically homeless and have disabilities.
That will bridge a gap between now and when MSDHA puts the property’s Low Income Housing Tax Credits into place in mid-2025. While the agreement runs through June 2025, Dunlop said the exact date is to be determined.
One possibility for East Bay Flats tenants is a short hop from Munson Avenue to Garfield Avenue in a complex Woda Cooper Companies is building there. Goodwill Northern Michigan is partnering on the second phase, including by helping fill a cash gap, said Craig Patterson, Woda Cooper Companies’ senior vice president.
To reciprocate, the affordable housing developer agreed to hold about 10 units for tenants whose income exceeded the new limit, Patterson said.
“They weren’t set aside in the sense that we were going to wait, wait, wait,” he said. “They were still first-come, first-served, but we told (Goodwill Northern Michigan) we wanted to help place at least 10 of their families.”
The affordable housing developer partners with Goodwill Northern Michigan already at Brookside Commons in Garfield Township, Patterson said. Of the development’s 72 units, 26 are set aside for permanent supportive housing, with Goodwill Northern Michigan providing services to those tenants as well as arranging help for residents within the whole property.
Patterson sang Goodwill Northern Michigan’s praises, and said the nonprofit shows care for its tenants. That’s a big reason why the developer finds the nonprofit such a worthy partner.
Ultimately, the nonprofit’s goal is to create more housing for people who direly need it, while doing right by East Bay Flats tenants, Buron said.
“We want this to be a good project for everyone,” he said, “and we are committed to ensure that’s going to be the case for current residents and incoming folks.”