Expert Looking at How to Attract Developers of Non-Student Housing to East Lansing

The housing expert hired by the City of East Lansing has now met with the City’s Housing Commission and Planning Commission, and she’s made clear what she sees as her task: figuring out how to attract developers to build for markets other than students – including building to attract more residential diversity in terms of income levels, household type, age, race and ethnicity.

At the Planning Commission, there was plenty of talk about what (not) to do about student housing. 

Sharon Woods of LandUseUSA — the consultant hired to undertake a housing study for the City — had a long discussion of her findings with the Planning Commission on May 12, after having already provided City Council a cursory methodological overview and then a deeper explanation.

With approximately 7,300 student households according to Woods’ data, the student demographic (unsurprisingly) dominates East Lansing’s housing market. But, in response to a question from Planning Commissioner Jack Cahill about the supply and demand of rental houses, Woods explained that the market potential figures in her study exclude student households.

“Absolutely all of the market potential numbers in the main report exclude students,” Woods said. 

Woods went on to explain that that is because she had been asked by the City Director of Planning, Building and Development, Tom Fehrenbach, to consider what groups besides students the City could seek to attract.

 “The real question I was asked by Tom Fehrenbach and his team was, ‘If we were to diversify, what other lifestyle cluster could we diversify with?’”

Woods thinks that, as developers build newer, more modern apartments on and near Grand River Ave., students may begin vacating rental houses, leaving those houses available to less-wealthy non-students to either rent or buy. 

Whether the market might take that turn in terms of rental houses — local people remain skeptical students will ever give up the desire to rent houses near campus — Woods also spoke to the desire to attract developers who will build new housing units for someone other than students.

“We want to build a relationship where developers will build units that are not for students, because we want to diversify,” Woods said.

The Housing Commission was particularly interested in housing for older persons.

When Woods presented her work to East Lansing’s Housing Commission on May 6, Commissioner Janeile Cannon asked Woods if one of her objectives was to help the City plan for the needs of older people.

“I’m sure you know that the fastest demographic that’s growing is people 80, and 85 and older — and they [meaning developers] are building resort assisted living developments around here like crazy,” Cannon said. “Are they represented in your findings?”

Cannon also shared her personal opinion: That these facilities are being built because they make the developers and partnering entities a lot of money. 

For “buy-in” communities where a large down payment is required, Cannon said, the initial payment can range from $165,000 to $500,000 or more. On top of that, then, there’s monthly fees, Cannon said. 

“We’d like to pass some [money] on to our families, not developers,” Cannon said.

In response to Cannon’s “tough question,” Woods said she has recently completed some senior assisted-living housing studies in Michigan and “found that if a city’s policies enable development of senior assisted living type housing formats, that the developers — you are absolutely correct, it can be a very lucrative business.”

Woods said she saw developers migrating to the communities with lenient policies allowing that sort of development. 

In West Bloomfield Township, Michigan, the government had not realized they had inadvertently incentivized that type of development in their community, Woods said, and the developers flocked there. (Woods didn’t explain the policy or machinations incentivizing developers there, and didn’t say whether East Lansing is inadvertently doing something similar.)

But the message – and the answer to Cannon’s question – seems to be that the City can exercise some power to shape senior-focused developments. 

After the presentation finished, a question posed at City Council came up again: Why doesn’t the data in Woods’ study get broken down by race, and is it possible to incorporate that variable into the demographics?

“It’s important to us to understand what our intended consequences are for our policies but also unintended consequences,” Commissioner Kacie Kefgen said. “And without race data, I don’t know if that will allow us the tools we need to hold ourselves accountable – to make sure that when we’re setting policy about and the availability of that, does that have a disproportionate impact on people of different race groups? I don’t know how we answer those kinds of questions without race data.” 

Woods said that City Council had brought this up, and that it is on a list of things to address in the future.

“I will clarify though: I tend to avoid doing a market analysis on residential — or retail either — that has race or ethnicity as a variable. Because I tend to not want to imply, in any way, that we would recommend housing or build housing that would be race-defined,” Woods said. “We wouldn’t build housing for Hispanics, or build housing just for whites, or build housing just for Blacks. So, that’s why I tend to avoid it because it tends to be kind of a — it can be misinterpreted too easily by media, for example. So, it’s dangerous.” 

Woods continued by saying that there is correlation between ethnicity and wealth: areas with more ethnic diversity tend to be less wealthy and incomes are lower. 

While this is “not fair,” Woods said, the best thing to encourage more diversity in the City of East Lansing is to ensure new housing comes at an attainable price point.

What can we expect going forward from here?

“We don’t have anything set in stone yet, about where this will go from here,” Peter Menser, the City’s new Planning and Zoning Administrator, said. (Menser has taken the position vacated by David Haywood.) He referred to the presentations to Council and both the Housing and Planning Commissions as “phase one” of a longer process.

As ELi reported, Woods told Council she has hired Justin Sprague of Community Image Builders/CIB Planning to present “a housing strategic plan” for East Lansing, including ideas of what the City can do to change its policies and practices to diversify the housing stock and residential population. So it is likely we will be hearing from Sprague sometime soon.

According to City Staff, there will also be efforts to engage the residents of East Lansing to get feedback and questions. Residents can visit this site to provide feedback.

You can watch Woods’ first Council presentation here and read about it here; watch the second Council presentation here and read about it here; Housing Commission presentation here; and Planning Commission Presentation here.