Jun. 8—ELK RAPIDS — HomeStretch Nonprofit Housing could pay no property taxes for apartments it plans in Elk Rapids.

Village council members unanimously agreed to a zero-percent payment-in-lieu-of-taxes agreement for the 24-unit, two-building project at a recent meeting. While the housing developer had originally requested a tax break allowing it to pay 4 percent of net shelter rents — rental income minus the cost of certain utilities — instead of property taxes, council members agreed to drop that to zero.

The difference in cost would lead to about a 10-percent reduction in rents for tenants, Homestretch Nonprofit Housing Executive Director Jon Stimson said.

Critically for the Elk Rapids village council, it could be the difference between the Michigan State Housing Development Authority approving Low-Income Housing Tax Credits for the project, or not, Stimson said. Each application round nets requests that far outstrip the amount of tax credits available, and the project in Elk Rapids would be jostling with others from Charlevoix, Traverse City and so forth.

That advantage with MSDHA was a compelling argument for village council members Charlie Pryde and Melissa West. Both agreed that for the cost to the city — an estimated $8,385 per year, documents show — the project was well worth it in other ways. West referenced the benefits of an apartment project aimed at everyone from single tenants of various ages to families with kids, including more kids in classroom seats.

“I just feel like this is such a priority that it’s not a huge hit for us to take if it would mean getting the project,” West said.

The village council also agreed to sell the property slated for the apartments on the 400 block of South Bridge Street to the developer for $1.

And Elk Rapids Township joined in, selling the village an adjacent empty lot for $100, said Elk Rapids Village Manager {span}John Matthews. That allowed for the addition of more parking without needing a setback variance.{/span}

{span}”So it really shows you that the village of Elk Rapids, Elk Rapids Township, the developer and the council and the township board are really all working together for the betterment of this region,” he said.

The developer would pay other usual costs, like water and sewer bills totaling about $15,000 per year, Stimson said. But where other local governments seek a municipal services agreement to offset a tax-abated project’s impacts on police, fire and other government agencies, Elk Rapids officials didn’t bring one up.

Elk Rapids joins Frankfort as the second in the state to adopt a zero-percent PILOT, Stimson said. He told Elk Rapids officials that helped a HomeStretch project there get the nod from MSDHA for tax credits.

It’s a major step in a process that started in 2022 when Elk Rapids leaders issued a request for proposals to develop some empty, village-owned property. The stated intent was to develop the property primarily as “workforce” housing, defined by the village as intended for people earning 50-80 percent of Antrim County’s Area Median Income.

For the project being planned, rents would fall into three categories for those earning up to 30, 50 or 80 percent of Area Median Income, documents show. One- and two-bedroom apartments would be available at each rent tier, with estimated monthly rents ranging from $382 to $1,426 — Stimson said the plan is to accept tenants with Housing Choice vouchers.

Stimson agreed that Elk Rapids faces the same pressures as many small lakeshore communities: a high demand for service jobs, yet a pricey housing market making it difficult for those employees to live nearby.

Not only would the apartments rent to people earning a range from $18,150 to $48,400 for one person, according to 2024 numbers, but the deed restriction gives priority to Antrim County residents, then Elk Rapids village residents, then Elk Rapids village or schools employees, in that order, Stimson said.

HomeStretch Nonprofit Housing’s experience in Honor has already shown how much cutting tenants’ commutes can save them, Stimson said. For all eight units in the Benzie County project, residents are commuting an average of 200 miles less per day. That means savings on gas that can be put to other uses.

Preliminary plans are to break ground on the Elk Rapids apartments by May 2025, and have them ready for residents by October 2026, documents show.