Council directs study of fee-in-lieu option, housing area expansion for downtown redevelopment
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Summary
After public comment supporting a proposed Howard redevelopment project, the council voted 4-1 to direct staff and the planning commission to study adding a fee-in-lieu option and expanding the geographic area covered by the city's diverse housing ordinance (Ordinance 13-84).
The East Lansing City Council on Tuesday asked staff and the Planning Commission to analyze and draft possible amendments to ordinance 13-84 that would allow a fee-in-lieu option and expand the geographic area where the city's diverse-housing requirement applies.
Why it matters: Residents and development proponents argued that the current ordinance has blocked downtown housing development for years and discouraged private investment. Supporters said a fee-in-lieu program and a broader boundary would enable market-rate projects near MSU while generating funds for affordable housing.
What prompted the vote: Multiple speakers told council they support the Howard redevelopment concept and urged a change to the ordinance. Carrie Freeman said she submitted a proposed amendment and urged council to “refer this to the city attorney to draft language to amend ordinance 13 84 to at least include a fee in lieu option.” Jonathan Smith and several other speakers framed the change as a way to add housing near campus, support downtown businesses and increase tax revenue.
Council action: The motion directed staff and the Planning Commission to investigate a fee-in-lieu program and consider expanding the ordinance's geographic scope for diverse housing. The motion also asked staff to include indemnification language to protect the city from legal costs if a fee-in-lieu program is challenged. The roll call was: Altman — no; Meadows — yes; Watson — yes; Mayor Pro Tem Singh — yes; Mayor Brookover — yes. The motion passed 4-1.
Details and debate: Speakers and some council members referenced models in other college towns (Chapel Hill, Evanston, Ann Arbor, Columbus) where fee-in-lieu funds support affordable-housing trusts, down-payment assistance or local matching funds for federal grants. Commenters and developers suggested a payment could be structured to seed a local housing trust and estimated potential tax and development benefits; one public commenter said a proposed project could generate an initial payment of $2 million and $23 million over 20 years in local economic benefit if it proceeds.
Next steps: Staff will develop draft ordinance language and analysis on possible fee calculations, geographic expansion and legal risk. The Planning Commission will be asked to review options and recommend specific language for council consideration. Any formal ordinance change will return to council after public hearing and Planning Commission recommendation.
Ending note: The council's direction stops short of adopting an ordinance change tonight, but it moves the city toward a drafting and review process that could enable downtown redevelopment while attempting to preserve the city's affordable-housing goals.
