Breaking New Ground in Affordable Housing

PORTAGE, Mich. — The American Dream of homeownership is becoming increasingly elusive for middle-class families across Michigan, but the city of Portage is taking a bold step forward with Stanwood Crossings, Michigan's first community land trust development.

Forty-two new affordable homes are currently under construction at the site, and unlike traditional housing developments, residents who live in these homes will also own them through a unique ownership structure that has shown promise in addressing the state's housing crisis.

"This community land-trust concept that we're putting to work here, is the first one in Kalamazoo County," Patrick McGinnis, city manager of Portage, said. "There's only a handful of them in Michigan, so we hope to be able to grow this concept to deliver more affordable housing throughout the state of Michigan."

How the Community Land Trust Works

The development represents a significant innovation in affordable housing, using a model that separates land ownership from home ownership. The City of Portage purchased the land using American Rescue Plan Act (ARPA) funds and is leveraging Tax Increment Financing (TIF), a state development tool that allows the city to use future tax revenue from the project to fund the development itself.

This structure means that while homeowners own their individual homes, the land itself remains owned by the community trust, which helps keep costs down and ensures long-term affordability.

"When my realtor described what the program was, I thought we should be doing this all over the place," said Drew Forsyth, a prospective buyer who toured one of the new homes being built at Stanwood Crossings.

The Housing Crisis Deepens

Real estate professionals in Kalamazoo County say the current housing affordability crisis is a direct result of conditions that began during the Great Recession of 2008 and have worsened over nearly two decades.

"All of the builders got out of the business right there. They stopped speculating homes, and you have a mass exodus of all the trades. And we just under-built for 10 plus years," said Dan Jaqua, owner of Jaqua Realtors based in Kalamazoo.

Jaqua explained that the shortage of available homes has created a perfect storm for affordability problems. While home values have surged for existing homeowners, first-time buyers face an impossible challenge finding available inventory.

"I often correct people, because people say we have an affordability problem and I feel like we probably have an availability problem," Jaqua said.

The city's approach with Stanwood Crossings aims to address both issues by creating homes that are genuinely affordable for middle-income families while providing actual ownership opportunities.

Building for the Future

The development is being constructed using a mix of funding strategies that include federal dollars from the American Rescue Plan and state development tools. This combination allows Portage to move forward with a project that addresses one of the most pressing needs in Southwest Michigan.

City officials say the model has been tested in other states and has shown lasting results. By keeping the land in trust, the community ensures that homes remain affordable even as market conditions change and interest rates fluctuate.

The city has expressed plans to expand the concept to other locations throughout Michigan if the Stanwood Crossings model proves successful. With housing costs continuing to outpace wage growth across the state, this innovative approach could serve as a blueprint for other communities struggling with affordability.

What Residents Will Own

At Stanwood Crossings, prospective homeowners will purchase their individual homes while the land itself remains part of the community land trust. This structure provides several key benefits:

  • Homeowners maintain full ownership of their homes and can build equity
  • The land trust prevents speculative price increases that could drive out middle-income buyers
  • Future sales of homes are typically subject to affordability covenants that keep them accessible to similar-income buyers
  • Residents benefit from stable housing costs even as broader market conditions change

The development represents more than just construction of 42 new homes. It is a test of a new approach to affordable housing that could transform how communities address one of America's most persistent challenges.

Sources

  • https://wwmt.com/news/local/michigan-affordable-housing-solutions-stanwood-crossings-portage-city-jaqua-realtors-money-economy-infrastructure-kalamazoo-county
  • https://arcwestmichigan.com/news/local/michigan-affordable-housing-solutions-stanwood-crossings-portage-city-jaqua-realtors-money-economy-infrastructure-kalamazoo-county