Houses stand next to each other beside the road.
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Brian Chambers, a Ward 3 resident and U-M alumni, has a long history of housing advocacy in the city. This year, his 39-page volunteer project, titled “Ann Arbor’s Middle-Income Needs Analysis: Introducing the Neighborhood Assistance Corporation of America (NACA),” motivated a May 5 City Council resolution to collect and communicate home mortgage information. In an interview with The Michigan Daily, Chambers gave his first-hand account of the wealth-building power of homeownership.

“I bought my first house when I was in graduate school (at the University) in 1984, with a joint investment from my in-laws,” Chambers said. “…since then, the housing price has increased a lot but we’ve been able to keep our housing cost at 1984 levels, as the mortgage payments are fixed.”

According to the U.S. Census Bureau, if Chambers was not a homeowner, the rent he would be paying today would have increased by 75% from the level it was at in 2000.The average housing price in Ann Arbor, on the other hand, is now five times the level it was in 1984. 

Prospective home buyers must have enough savings to cover the downpayment and closing cost before buying a house. The post-pandemic housing boom has made reaching this saving threshold increasingly difficult. According to the Ann Arbor Area Board of Realtors, for-sale home inventory in Ann Arbor has shrunk by almost 60% in the past year, while the median price of single family homes increased by 11.4%. In an interview with TheDaily, Lauren Corneliussen, a buyer’s agent based in Ann Arbor, explained how these trends cause frustration for first-time home buyers.

“It could take as many as three deals to get your final accepted offer,” Corneliussen said. “(For homebuyers), it takes longer to buy, it’s harder to buy and it’s more stressful, and you pay for stress in money by losing work or making snap decisions.”

Chambers said he wants to unlock homeownership opportunities for more people and that the story of Veronica Brandon, who was able to own a house thanks to mortgages from NACA, is especially compelling for him. He examined the U.S. Census (between 2010 and 2019) and Bureau of Labor Statistics to further understand recent home ownership patterns. He found that the lower-tier of middle-income households (annual income between $50,000 to $100,000) has seen sharp declines in homeownership, and the low-income (annual income below $50,000) households are disappearing even from the rental market. Chambers presumed these renters were priced out by middle-income households forced into the rental market. 

In competitive housing markets like Ann Arbor, a larger range of potential homeowners would need help affording a house. Chambers said he believes NACA could help.

“Local housing agencies provide homeownership vouchers for low-income households, who earn below 50% of Area Median Income,” Chambers said. “But NACA also provides zero-downpayment, below-market-rate mortgages for people earning beyond that. Their financing covers more income tiers.”

NACA is not the only company who made endeavors to introduce inclusive mortgage plans in the area. National Faith Home Buyers, a homeownership counseling agency, partnered with The University Bank to provide loans and homeownership assistance for historically marginalized groups in Ypsilanti before moving to Detroit. City staff also raised concerns at the May 5 City Council meeting about favoring one specific company and adjusted the agenda to avoid exclusivity.

Chambers said he believes NACA proposes unique advantages for Ann Arbor, given its zero-downpayment and low-default-rate, but he would welcome broader efforts to search for other inclusive mortgage plans to be included in the resolution.

“My understanding is they didn’t want (the resolution) to be exclusive to one organization,” Chambers said. “Veterans Administration issues some low income mortgages, so does the Federal Housing Administration. There are other options as well … and I would support the overall effort.”

Boosting the supply of housing

While Chambers works to introduce more inclusive mortgage products, another non-profit group, Equitable Ann Arbor Landtrust (EA2), is working to create more affordable owner-occupied housing. EA2 was founded by Peter Allen, a real estate titan and former U-M lecturer, and Sarah Lorenz, Allen’s former student who currently serves as one of the board members for EA2. One of EA2’s efforts centers around alleviating homeownership challenges for middle-income residents.

“We feel that the homeownership aspect is important,” Lorenz said. “And as the only local group that works on homeownership…we’re exploring ways we could support the development of homeownership for middle-income people.”

While borrowing some concepts from community land trusts (CLTs), nonprofit community-based organizations established to steward the land and enforce long-term affordability properties over it, Lorenz said EA2 is different because they do not act as developers.

“We’re trying to represent local interests and that’s going to take shape in different ways,” Lorenz said. “That might be helping the developer find an off-market property that really suits what they want to do. We are also finding developers who share our visions, who are building sustainable developments or using innovative ways to build housing that has affordable elements in it.”

Allen and Lorenz said parking lots in the city are ideal locations for building sustainable housing developments. As remote work increases from pre-pandemic levels, Allen said EA2 has been negotiating with the University to enable development on its underused parking sites to facilitate place-making and meet the city’s walkable neighborhood goals. 

Ann Arbor’s 20-minute neighborhood plan encourages higher-density housing and amenities to ensure residents could reach most of their daily needs, such as grocery stores, within a 20-minute walk of their home. The plan would also reduce residents’ need for driving, thus reducing their carbon footprints in line with the city’s A2Zero initiative. According to a report presented to the city in June 2021, most of the University’s North Campus and surrounding area doesn’t meet this vision. 

We’re reaching out to the University to talk to them about some other sites they’ve got on Plymouth Road, on the north edge of North Campus and along Fuller Road,” Allen said. “The University has been creating jobs, they should also have some responsibility to help housing the people with the minimum commute and maximum amount of nearby walkable amenities.”

Lorenz said EA2 is familiar with Chambers’ work and believes in his mission. Both groups stay in close contact and are mutually supportive of each other.

“We’ve always been aware of Brian Chambers’ work,” Lorenz said. “We’re very supportive of that, and we’re hoping that if (we could bring in) new developments in the city, people could buy those units using NACA loans.”

Challenges and Debates

Despite their aspirations, Allen and Chambers’ initiatives still face steep challenges. For NACA, Chambers acknowledges that the heated real estate market is a wildcard. Currently, the mortgage amount NACA offers is still capped in Washtenaw, which means the amount could secure a smaller range of housing transactions when housing prices rise in the area. It is still unclear whether NACA could ramp up its funding capacity to catch up with the housing price.

“Last year, (the eligible Ann Arbor homesale for NACA mortgage) was more than 50%,” Chambers said. “This year it will be dramatically reduced because of the increasing home prices. Countywide, I’d say it’s still 50% or more.”

But mortgage competitiveness is more nuanced than a few quantifiable metrics. Corneliussen said since mortgage holders also have to compete with cash bidders over home seller’s preference, favorable lending terms don’t always lead to good results.

“Real estate is very deeply individualized, and it just really depends on the individual seller’s preference,” Corneliussen said. “Sellers sometimes believe that a higher down payment amount leads to a better bet. When I do have (buyers making) low down payments, like 0% down, I do sometimes get calls from sellers’ agents and say, ‘Why don’t they have any money?’”

In an email to The Daily, University spokesman Rick Fitzgerald said that the University currently prioritizes student housing.

“The main focus for the future development of U-M housing will be student housing that supports the (University’s) primary educational mission,” Fitzgerald wrote.

Rising development costs also undermine the possibility of incorporating affordable elements in new development. Tom Fitzsimmons, an Ann Arbor local developer who is Allen’s former student, explained in an interview with The Daily why developing entry-level owner-occupied housing in Ann Arbor is difficult for for-profit developers. 

“Where things have really blown off over the last couple of years are the cost of raw materials,” Fitzsimmons said. “All builders are facing those challenges not being able to get what they want for multifamily and mid-rise projects. There are also other factors that amplify that, like the labor shortage and how the lands in our city get bid up. These all make it harder to build housing at any level possible.”

Multiple community activists, including Chambers, have spearheaded efforts to rezone the city to free up land and make development easier for developers like Fitzsimmons and Avalon Housing. Nevertheless, they disagree over homeownership promotion..  

Jessica A.S. Letaw is the founder of Building Matters, a cultural non-profit to cultivate community awareness of building environment and city planning. Letaw said she respected efforts to promote homeownership, but didn’t think homeownership could solve the housing access issue. Letaw said Minnneapolis exemplifies how increases in housing development makes communities more affordable without promoting homeownership.

“When we talk about ownership, it’s just moving person A from house B(rent) into house D(owned), creating this dynamic without increasing the housing, ” Letaw said. “That doesn’t expand the access at all. What we need is more housing which will increase access to this community. More access is also going to affect our affordability levels in a positive way, much faster than how we’re affecting home ownership types.” 

As Ann Arbor’s population continues to grow, Chambers said he wants new housing to benefit new residents more equitably but fears this would not be accomplished without homeownership assistance for the middle-income population. 

“The City Council has done much to foster more housing development in the city, ” Chambers said. “My understanding is that short of the affordable housing developments, these will be predominantly rentals exposed to market rates. As we know rents will continue to increase and therefore homeownership itself should be an additional priority for the city housing policy.

Daily Staff Reporter Chen Lyu can be reached at