Kalamazoo County officials unsuccessfully offered $6 million to purchase the Lakeside Academy property in Kalamazoo for emergency and affordable housing. Kalamazoo County officials unsuccessfully offered $6 million to purchase the Lakeside Academy property in Kalamazoo for emergency and affordable housing. PHOTO BY ANDY BALASKOVITZ

Kalamazoo County regroups after ‘golden opportunity’ for housing falls through

BY Sunday, March 28, 2021 06:40pm

KALAMAZOO — Kalamazoo County is determining how to allocate funding from a recently approved housing millage after a failed attempt to turn the vacant Lakeside Academy campus into a much-needed housing development.

The county has been gathering public comment and hired former county Treasurer Mary Balkema as its housing director to oversee funding from the new Homes for All millage that voters approved in November. The .75-mill property tax will be levied for eight years — from December 2021 to December 2028 — and is expected to raise about $6.4 million in its first calendar year. The millage replaces a .1-mill tax that has raised nearly $800,000 annually over the past six years, which has helped more than 500 families secure affordable housing.

“Many of us knew for a while that something bigger was needed,” said Kalamazoo County Board of Commissioners Chairperson Tracy Hall.

The new millage expands on the existing tax by increasing the number of people who can access funding. It will also go toward creating permanent affordable housing. Previously, the funding was only available to families with children enrolled in a local school district, but the qualifications have broadened to include rent subsidy programs, constructing permanent housing units and support services for cost-burdened households.

The county has spent the past few months gathering public comment on exactly how the funding should be spent. The county has a severe shortage of affordable housing units, which has caused many people to live in tents, hotels, doubling up or live out of their cars, Balkema said. 

“Since no county in Michigan has ever levied a millage like this, we are kind of building the boat while we are in the water,” Balkema said. 

Michigan State Housing Development Authority rent subsidy vouchers are also going unused because of the lack of available affordable housing, she said.

The county Board of Commissioners is planning a retreat on May 15 to determine a housing policy and vision for the new millage money. A request for proposals on affordable housing projects is expected in July. The goal is for funds to be released for approved projects in March 2022 from tax bills that are levied in December this year.

“The decisions will ultimately be made by the Board of Commissioners and so the projects will be picked by them and the policy will be set by them. I think there is a lot of wisdom in that because there will be continuity with the plan,” Balkema said. “This process will live on in perpetuity and additional feedback can be given every year as we learn what works and doesn’t work. Next year we’ll do this work all over again.”

The timeline is strategic because it aligns with MSHDA application deadlines for housing incentives, Balkema said.

“There are resources available to create affordable housing such as (Low-Income Housing Tax Credits), but those are limited resources and don’t always get you all the way there or make a project feasible,” said Jason Muniz, vice president of Portage-based Hollander Development Corp. “That’s where I think the millage could play a key role.”

Meanwhile, construction costs have “skyrocketed,” which was exacerbated during the COVID-19 pandemic in part because of supply availability and tariffs, Muniz said. Construction for housing is cost-prohibitive across the board for single and multi-family homes, making affordable projects that much harder, he added.

“Affordable housing” is defined by the U.S. Department of Housing and Urban Development as a household paying up to 30 percent of its income on housing expenses, which includes rent, utilities, taxes and insurance. Based on 2019 Census data, the median household income for Kalamazoo County is $56,511 for a family of four.

“We would like very much to be involved in adding more affordable housing through this process,” Muniz said. “Kalamazoo is our hometown, our backyard, even though we work all over the state. I am very optimistic about what the millage can do.”

‘Back to the drawing board’

The county planned to use funding from its recently approved housing tax to purchase the former Lakeside Academy property at 3921 Oakland Drive in Kalamazoo. Plans sought to create emergency housing for the large homeless community in the county, as well as turn part of the building into permanent affordable housing units. 

The Lakeside Academy Board of Directors declined the county’s $6 million bid and instead opted to sell the property for the same amount of money to Oakland Finance LLC. The company is registered to Jordan Schau, an attorney with Lake, Parfet & Schau PLC in Kalamazoo. Schau did not respond to requests for comment from MiBiz.

“This was like one of those golden opportunities that we thought we had and we couldn’t pass up,” Hall said. “This is our most challenging issue, housing in general.”

County commissioners and administrators took two tours of the facility and presented its plan to the Lakeside Academy Board of Directors in November 2020. A majority of the board members voted against the county’s proposal.

Losing out on purchasing the 55-acre property was disappointing, especially because there is not much available space in the county, Hall said.

“There were so many reasons why it was such a good project,” Hall said. “Now we’re back to the drawing board figuring out what’s next.”

Editor’s note: This story has been corrected to show the correct name of Lake, Parfet & Schau PLC. 

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