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Berkeley council approves first reading of workforce housing PILOT ordinance
Summary
Council approved first reading of an ordinance adding a workforce housing pilot (payment in lieu of taxes) to the municipal code, enabling negotiated tax-exemptions for development or rehabilitation of housing targeted to households at up to 120% of area median income.
BERKELEY, Mich. — The Berkeley City Council on May 5 approved the first reading of O-6-25, an ordinance to add an article to Chapter 114 of the city code creating a workforce housing pilot that uses Payment In Lieu Of Taxes (PILOT) agreements to incentivize housing for households earning up to 120% of area median income.
Community Development Director Kaplansky told council the state enacted the underlying authority decades ago and expanded, in recent years, the tool to allow use for workforce housing in addition to low-income housing. She described the program as a negotiated agreement in which a developer pays a set, negotiated percentage in lieu of standard property taxes for up to 15 years; other public benefits can be required as part of the negotiation on a project-by-project basis.
Kaplansky said the city's proposal focuses on workforce housing defined as households with incomes between 80% and 120% of the HUD-determined area median income for the metro area. She emphasized the ordinance only creates an option for the city and does not obligate the council to enter an agreement with any developer. "The ordinance that's before you this evening allows us to, should it be approved, move forward with those negotiations with any interested developers. It does not require us to do that," she said.
Council members expressed support and urged caution about public misinterpretation. Council member Baker called the ordinance "another tool in the toolbox" and said each proposal would be negotiated based on project specifics, location and public benefits. Mayor Bridget Dean and Mayor Pro Tem Gavin also spoke in favor, noting the measure was the result of several prior work sessions and would be considered on a project-by-project basis by resolution if used.
Action taken: Council approved the ordinance on first reading in a unanimous roll-call vote. The ordinance will return for a second reading before final adoption. Any PILOT agreement would be negotiated individually and approved separately if proposed.
The council and staff said the program would be used to encourage multifamily housing at rental levels intended to be attainable to workers and families who meet the 80% to 120% AMI threshold. The ordinance sets the legal framework; specific payment percentages, term extensions and public-benefit conditions would be determined during negotiations for each proposed project.
