More Michigan businesses are offering their employees housing solutions to prepare for peak tourism season this summer as hospitality and seasonal workers continue to be priced out of living near their employer.
The number of these businesses, especially in northern Michigan, is increasing because the housing market is “in crisis,” said Yarrow Brown, executive director of Housing North, a Traverse City-based nonprofit housing advocacy organization.
“It’s something each employer should think about carefully, and employees, too,” Brown said. “There are a lot of models out there, but it’s not one-size-fits-all. It’s a new space we’re navigating. Any shared equity model, if it’s done in the right way, is not a bad thing in my opinion.”
Employers stepping into a housing solutions role — not a core function of the business — speaks to the severe lack of housing, said Josh Lunger, director of government affairs at the Grand Rapids Area Chamber of Commerce.
Housing is a major focus of the Grand Rapids Chamber as member companies are increasingly concerned about the lack of affordable housing, Lunger said.
“The reason we first got into (advocating for more housing) was because employers saw it as a major challenge, as well as an impact on the community they call home,” Lunger said. “Working to solve our housing problem has a dual benefit for employers.”
Lunger also sees growing interest among Grand Rapids-area employers to develop their own housing solutions for their workers. The housing market is even tighter farther north where fewer housing projects are being built, he added.
“My hope is West Michigan can do enough by working with all of the stakeholders to put the puzzle together to create more housing at all price points to kind of reverse this trend so we don’t have to worry about employers doing that directly,” Lunger said. “The economics of developing housing are so challenging.”
‘Nothing to buy, nothing to rent’
When a new house comes on the market near Short’s Brewing Co.’s Bellaire location, multiple members of the brewery’s staff put in offers on the same house, company CEO Scott Newman-Bale told MiBiz. Newman-Bale has seen the housing market in northern Michigan become more of a problem in recent years for members of his staff. Employees have had to find different jobs because they could not afford to live in the area, he added.
“Last year (housing) was bad, and this year was looking even worse, so we were looking for housing and talked about converting an old hotel,” Newman-Bale said. “In the past few years, it’s becoming more and more problematic. There is no housing inventory right now. There is nothing to buy and nothing to rent.”
The brewery recently purchased the 26-unit Bellaire Inn at 728 E. Cayuga St. that it will use as transitional housing for its employees. Newman-Bale said late last month that he expected the former Bellaire Inn to be full within a week.
“We use the term ‘transitional’ because some will stay there longer than others,” Newman-Bale said. “It’s a hotel room, but it’s cheap, and it’s clean and for the summer it’s a good option for a lot of people. We are making this model sustainable, so it’s not designed to be subsidized, it’s designed to be a workable model that could be replicated. It’s designed to be able to at least pay for operations, and obviously housing employees keeps us open.”
The housing complex currently is operating as a partial hotel and partial transitional housing building that tenants rent for about $600 a month, which includes utilities. Short’s employees get a discount and can split the room if they choose to get a roommate, Newman-Bale said.
“We’re not taking any outside companies anymore,” Newman-Bale said. “We had some initially but then they filled up instantly and now we’re almost filling it up with our own staff.”
Glen Arbor-based Cherry Republic Inc. has been ramping up its housing program because of the increased need. The company is part of Resilient Homes Michigan, a group of businesses and housing advocates that recently called on the state to invest $1.65 billion in affordable, energy-efficient housing.
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Cherry Republic President Bob Sutherland during a May 5 press conference expressed frustration at how much time and energy his company spends on housing efforts when they would like to “get back to selling cherries,” he said.
In September 2020, Cherry Republic hired Leah Moskovitz as the company’s first workgroups and housing supervisor to oversee housing for seasonal workers as well as intern housing.
“We realized that the need for housing is extremely important for our staff because we swell up very big in the summertime,” Moskovitz said. “The need for housing is extremely important to bring in others to help support our core staff. People want to work up here but don’t have the opportunity to live here affordably because of how bad the housing crisis is.”
Cherry Republic offers temporary housing for seasonal workers and employees who need temporary housing while they look for other rental or home ownership options. When Moskovitz started in 2020, Cherry Republic had about 30 housing units, which has grown to more than 50. The housing units are “completely allocated” for the summer, Moskovitz added.
Most of Cherry Republic’s housing is based in Maple City in the Leelenau Peninsula. Units are $400 a month to rent a fully furnished room with a roommate, and all utilities are included. Most seasonal employees would not be able to work at Cherry Republic without the housing program, Moskovitz said.
“If we didn’t have this housing, I don’t think we would be in the good spot we are now,” Moskovitz said. “It has set us up for success. If we didn’t have the amount of housing or programs we do, I think we’d be in a very different position.”
Moskovitz and Newman-Bale both said they want to set an example for other companies and local governments on how to offer affordable, sustainable workforce housing.
“We really try to be an example,” Moskovitz said. “It’s really critical at this point to get creative and collaborate with other businesses and to share housing so our staff doesn’t have to close a day or two a week or have shorter hours.”