During their fourth and final decision on the “Y lot” repurchase, Ann Arbor City Council voted 11-0 to purchase the lot for $4.2 million at 350 South Fifth Avenue.
The special session on Tuesday comes after postponing the decision in previous meetings. The city had sold the lot to local real estate developer Dennis Dahlmann in 2014 for $5.25 million with a promise to create affordable housing and commercial developments on the lot. The lot is still vacant, and Dahlmann has sued the city in order to extend his ownership of the lot for another four years.
Many residents called for the affordable housing prices to be based on median income instead of a fair-market value. The fair-market rent is determined by the market value of a unit, but many residents voiced their preference for rent to be based off Ann Arbor’s median income to make the units more affordable. According to the 2016 census, Ann Arbor’s median income is $57,697 and the city’s poverty rate is at 23.4 percent.
In the city’s decision, rent will be based on a fair-market rent of 110 percent of fair market range. The city has not yet determined the number of units to be built on the property.
Ann Arbor resident Sharon Ongaro called upon City Council to repurchase the lot to help those who work in the downtown area have affordable housing.
“There’s opportunity for the city of Ann Arbor to step in, take control of that lot and hand it to a developer with the requirement that some number of the units be affordable housing,” Ongaro said. “We all know that it’s needed. We all know that gentrification has taken place and shoved people out of their homes through the years and we need to have affordable housing so the people that are making our downtown tick have a place to stay.”
Ann Arbor resident Sandi Smith, a local realtor and president of the Washtenaw Housing Alliance, was also in favor of City Council repurchasing the lot as a way to address housing affordability issues in the city.
“You (City Council) need to take some action,” Smith said. “This won’t solve everything, but you need to take some action to make sure that you get some money into the affordable housing trust fund. A good way to find affordable units is to use government-owned land. It’s smart.”
Councilmember Zachary Ackerman, D-Ward 3, sponsored the resolution as a means of improving Ann Arbor’s affordability and quality of life for citizens.
“I think as we build a community with a high quality of life and a sustainable economy, we need to look to that same premise that intentionally promoting affordability is critical to sustain quality of life and a healthy economy,” Ackerman said.
Councilmember Sumi Kailasapathy, D-Ward 1, also supported the resolution, expressing a desire to see the city stick to its project plans and not turn the property into a luxury facility.
“We have seen way too many projects that are being built that are being called affordable units but are really not affordable at all,” Kailasapathy said. “I don’t want to get into a situation of voting on this and then later on saying ‘it’s not financially (liable). We are going to put luxury units for affordable units which are $1600 for a two-bedroom apartment.’ Affordable for who? That’s more than the mortgage I used to pay.”
Despite voting for the resolution, Councilmember Jane Lumm, I-Ward 2, supported the city’s attempt to repurchase the property but did not support the specified resolution proposed at the meeting because of the project’s expenses.
“Building affordable housing units on the city’s most expensive real estate does not make economic or financial sense,” Lumm said. “It is also not the most cost-effective way to leverage taxpayers’ dollars in adding affordable housing units.”
Protesters from organizations such as Ann Arbor Ozone House were present at the meeting calling for the city to repurchase the lot and construct affordable housing units.