Raising the Stakes

Income limits for Grandview Marquette increase

Grandview Marquette is pictured. JThe housing complex is now accepting tenants with notably higher incomes as eligibility limits for the 56-unit complex have increased. (Journal photo by Corey Kelly)

MARQUETTE — Grandview Marquette is now accepting tenants with notably higher incomes as eligibility limits for the 56-unit complex have increased.

But that increase, considering the project was adopted to support housing for individuals with lower-level incomes, is raising questions over whether it will actually make it harder for those people to gain residency at the complex, located at the intersection of Fisher and Altamont streets.

Community Action Alger-Marquette, or CAAM, in February announced the change, which officials said is a result of the Tax Cuts and Jobs Act of 2018.

According to CAAM, the maximum eligible income at Grandview was increased from 60 percent of the area median income to 80 percent, as long as the average of the units available are affordable at below 60 percent of the AMI.

CAAM Executive Director Michelle LaJoie said the federal requirement will enable CAAM to serve more families seeking affordable housing options in Marquette.

“We’re now able to help more of the population that is just above that former income limit. We had so many that were so close but couldn’t rent to because they were just over the line,” she said. “Now we can revisit some of those applicants and see if they qualify and would be interested.”

State Rep. Sara Cambensy said she’ll never forget Grandview Marquette’s grand opening, which took place in November 2017 and was well-attended.

“We were unified behind a common goal to support low-income housing to those who need a little help the most,” she said.

But citing an affordable housing crisis in the Marquette area, Cambensy — who supported the Grandview project when she served on the Marquette City Commission — said the income increase at Grandview Marquette will only make it harder for young professionals, single-parent households and those living slightly above the poverty level to find affordable housing.

“While it is good that Marquette’s housing market remains competitive and healthy, we know that salaries and household income levels across the region are stagnant. Salaries have not been increasing at the same rate as housing prices,” she said in an email. “We also have a large population of retirees living on fixed incomes. This has created a gap. With Grandview raising their income requirements, it will create less housing opportunities available for lower-income and fixed-income residents. Some residents in a higher income bracket may benefit, but it will ultimately hurt those in which the Grandview project was created for.”

Cambensy said she supported the project because area residents felt an attachment to the building.

“Previously being an orphanage for many children and families in the area, the building had a tremendously rich history that residents wanted us to preserve and give new life to if we could,” she said. “When the Grandview project was proposed, it was a near-perfect solution where local residents benefited from the federal and state tax incentives to not only preserve the building, but give low-income residents an affordable place to live.”

Marquette Commissioner Dave Campana was acting mayor when the Grandview project came to fruition.

“It’s hard to get a home in Marquette because it’s more expensive here than surrounding areas. I know people are very happy to get into Grandview and I’m glad more people will become eligible to move in there,” he said, adding that the change also raises a question. “Are the higher-wage earners going to snap up the existing rooms or not? There might be more competition to secure a place at the Grandview. I suppose that’s the real question.”

But LaJoie said applications for Grandview Marquette are dated and time-stamped as they come in.

“We date and time stamp applications for the different income criteria we work with,” she said. “There are no market units, all are affordable units and will be targeted to those who fit the criteria.”

LaJoie said there are currently some units available.

Grandview Marquette offers one-, two- and three-bedroom apartments that are income-based. Now, CAAM can rent an apartment to a household of three with an income of up to $45,360. Previously, the income limit for a three-person household was $34,020.

Income limits for other family sizes have also been adjusted. Maximum eligible incomes, based on household size, are as follows: $35,280 for one person; $40,320 for two people; $45,360 for three; $50,320 for four; and $54,400 for five.

Fourteen units are reserved as permanent supportive housing for the formerly homeless, disabled or those with special needs, who pay 30 percent of their income in rent, with the rest made up by vouchers through the U.S. Department of Housing and Urban Development. Vouchers are awarded to qualifying individuals on the condition they are linked with supportive services, to be coordinated by CAAM.

The U.S. Census Bureau website states the median household income in Marquette County ranged around $48,000 between 2013 and 2017.

Formerly the historic Holy Family Orphanage, Grandview Marquette was developed through a partnership between Home Renewal Systems and CAAM, which leads the marketing and leasing efforts for the property, as well as the day-to-day operations.

The $16 million project received $13 million in low-income housing tax credits through the Michigan State Housing Development Authority, as well as $2.4 million in federal historic tax credits, $750,000 in permanent mortgage and deferred fees, and assistance through the city of Marquette Brownfield Redevelopment Authority for environmental assessments.

Andy Martin, director of rental development at MSHDA, said the concept of “income averaging” allows developments to have some higher-income tenants if they also provide for more lower-income residents.

“We find that being able to provide affordable housing at all income levels is more and more difficult, so this flexibility is helpful,” he said in an email.

Martin said the developers of Grandview Marquette applied for low-income housing tax credits in April 2015 to redevelop the building into affordable housing.

“The LIHTC is claimed by owners of an affordable housing project over a 10-year period and includes a 15-year compliance period in which the credit can be recaptured if the project fails to maintain compliance,” he said. “The tax code requires a minimum of 30 years of affordability, but typically, in order to receive the LIHTC award under MSHDA’s competitive process, the development commits to a much longer period of affordability — in this case 45 years.”

For that entire period, MSHDA is responsible for monitoring the compliance of the property to ensure it is both physically maintained and the units are rented to income-qualified tenants, he said.

“If a project fails to maintain compliance, the LIHTC equity investors could lose the credits that were awarded, which would be a disastrous outcome after the investors have fronted funds in reliance on receiving the credits,” he said.

Jaymie Depew can be reached at 906-228-2500, ext. 206. Her email address is jdepew@miningjournal.net.