Homeward Bound: HomeStretch Offers an Affordable Housing Alternative

Just a few months ago, Sarah Lucas was a single mom renting a place on Eighth Street in Traverse City, trying to make ends meet while raising her two-year-old son Asher. When she saw the new multi-million Midtown Centre housing development going up just across the way, she thought of how nice it would be to have her own home there.
“I thought this was such a nice neighborhood, but there was nothing in the area I could afford,” she recalls, but then Sarah learned about HomeStretch, a regional developer of affordable housing. She applied to the program, and today she and her son are living in their new home in the Midtown project adjacent to the Boardman River.
“I think it’s great -- I wish we had more projects like this because we really need them,” says Lucas, a 27-year-old employee of Leelanau County’s planning department.
She’s especially pleased that
HomeStretch was able to place her in a development filled with people of every economic strata and background, rather than in a separate affordable housing development.
She’s also thankful to be able to afford a new condo on her single parent income. “I’ve worked in Leland for the past four years and haven’t seen anything that’s
a quality home for under $100,000,”
she says.

MAKING IT HAPPEN
HomeStretch was able to make the American Dream come true for Sarah and many others in Northern Michigan because it cuts costs through an innovative community land trust program. HomeStretch literally owns the land beneath its clients’ homes.
“Land prices are going through the ceiling, especially here,” notes HomeStretch Executive Director Bill Merry. “When we started studying the problem of providing affordable housing in the region, the high cost of land is what drove us to look seriously at another way of doing things.”
Merry notes that in the early ’90s, the social services community in the area noticed that more families were becoming homeless. “People were having a hard time finding affordable housing.”
Rotary Charities funded an affordable housing study which found that the cost of owing a home outstripped the incomes of many low income residents of the area.
With a clear crisis at hand, HomeStretch was launched in 1996 to serve the counties of Antrim, Benzie, Leelanau, Kalkaska and Grand Traverse. Merry hired on in 1998 and helped get the organization’s first project off the ground: a duplex apartment on Mission Peninsula.
He says that first home demonstrated the crying need for affordable housing.
“The lady and her son who moved there were about to be homeless -- the hotel they were staying in was about to be redeveloped. They were at their wits’ end and didn’t know where they were going to go. There was no room at the Goodwill Inn and they couldn’t get an apartment. Fortunately, we had just finished our
first duplex.”
After it was determined that the high price of land was a barrier to owning a new home, a task force examined a land trust concept which had been developed in Burlington, Vermont and used throughout the country over the past 40 years. In 2003, HomeStretch converted to the land trust concept. Today, qualified homebuyers purchase new homes from HomeStretch, signing a 99-year renewable lease for the
land beneath their home. Grants from MICHDA (Michigan State Housing Development Authority) subsidize each housing project while other sources, such as National City Bank, Fifth Third Bank and Bank One, have provided low-interest loans to make ownership possible.

A GOOD FIT
In a region where homes of $250,000 and more seem to becoming more the norm than the exception, hundreds -- perhaps thousands -- of people on low incomes are wondering how they’ll be able to afford the American Dream of a new home.
Even renting a home is often difficult for those on low incomes, considering that rents increased in Grand Traverse County by 65 percent in the ’90s. Many in the area are trying to pay rents of $700 or more per month on incomes that aren’t much above the minimum wage. “Having a low income is considered to be 80 percent or less of the area’s median income,” Merry notes. He adds that typically, a family spends about 30 percent of its gross income on housing.
For a family of four where the household income is $35,000 per year, that means an affordable mortgage must be $107,000 or less. It can be difficult to find homes in that range, however, and many families on low incomes also have credit issues which complicate matters.
Then too, “the cost of housing is rising much more rapidly than wages,”
Merry says.
“With the kind of population growth they’re projecting in this region, there’s going to be a lot more demand for affordable housing. We can’t meet that demand ourselves, so we’re trying to work with affordable housing groups in other counties to maximize what we can do.”
HomeStretch is also working with enlightened developers such as Tim Burden of the Midtown Centre, who are community-minded enough to include affordable housing units as part of their development plans.


BUILDING UP
Is there a typical client?
“Yeah, single moms with kids,” Merry says with a smile. “I was surprised. I thought we’d get more couples, but that turned out to be a smaller percentage -- probably 30 percent, with moms being about half of our customers.
“Some are coming out of a divorce or have been divorced and don’t want to live in an apartment anymore,” he adds.
The project has also helped a number of single men obtain low cost housing, including a disabled Vietnam vet who obtained his very first home.
Thus far, HomeStretch has completed 40 home projects since 1999, with another 16 underway to be completed by next year.
Initially, it was hard to find builders because many are busy constructing upscale homes as part of the region’s real estate bonanza.
One standout, however, has been Mark Salgat of S Contractors. “He’s been great,” Merry says. “He helped us when we were doing rehab houses and has built all of our Cross-Town Homes and Carlisle Road houses (a total of 15 single-family homes). He adds that Salgat has taken extra care to provide nice touches to the homes, such as custom oval cut-outs on their front doors and five-star energy efficiency ratings.
There’s no lack of interest in HomeStretch’s projects: More than 100 inquiries were received on 10 homes completed by the spring of 2003.
Nationwide, the problem of a lack of affordable housing is growing. HomeStretch notes that for the fourth year in a row there is now nowhere in the country where the minimum wage is enough to pay the rent on the average two-bedroom apartment. Renters make up one-third of U.S. households -- nearly 36 million in all. Many of them spend more than half their income on rent and utilities -- some right here in Northern Michigan.

For information on HomeStretch,
call 231-947-6001, or see
www.homestretchhousing.org.

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