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City approves several Neighborhood Enterprise Zone certificates as commissioners debate who benefits
Summary
The Muskegon City Commission approved NEZ certificates for five infill homes, one waterfront parcel at Terrace Pointe and one city lot on Jackson Avenue. Staff and developers said the tax abatements reduce monthly housing costs; commissioners raised concerns that many buyers have been moving in from outside Muskegon.
The Muskegon City Commission voted April 22 to approve multiple Neighborhood Enterprise Zone (NEZ) certificates intended to lower property taxes on new construction and major rehabs, a policy city staff says helps make new housing affordable while commissioners pressed for clearer protections for existing residents.
Development analyst Jocelyn Hines told the commission the actions approved Wednesday cover five infill homes — 346 Wood Street, 320 Wood Street, 209 Merrill Avenue, 213 Merrill Avenue and 436 Charles Street — and two additional certificates later in the meeting: 328 Terrace Pointe Circle and 312 Jackson Avenue. Hines explained how the NEZ millage rate differs from the regular tax rate: “NEZs…have a reduced millage rate. So just to put numbers in it, a owner occupied home, NEZ millage rate is 17.52 mills.”
Why it matters: NEZ certificates reduce property taxes for a set period (staff said certificates in these hearings were for 12–15 years), lowering monthly housing costs for buyers of newly constructed or substantially rehabilitated homes. City staff and developers said NEZs are part of a broader program that combines private market-rate building with city-subsidized infill to sustain an affordable housing pipeline; opponents and some commissioners said the immediate buyers are frequently from outside Muskegon, limiting benefits for long-term city residents.
Developer Steve Benedict, who described himself as building in the Jackson Hill/Marquette neighborhoods, said the NEZ program has been central to buyers qualifying for mortgages. “This program has, drastically helped people afford, new construction,” Benedict said. “So to put into perspective, they're saving about between 300 and $400 a month on their payment, over a 15 year period.” Benedict told commissioners his homes range in size and price, and that without NEZ abatements some buyers would not qualify.
City officials and commissioners debated several related points: - Targeting and take-up. Commissioner Jermaine German pressed whether buyers were local. Benedict said many of last year's buyers came from other counties; German said that raised concerns about displacement and gentrification for his Ward 2 constituents. “The people that live in Muskegon…are the ones that's coming up short and displaced, pushed out,” German said. - Program design and funding. Jake Eckholm, the city's director of development services, described how the city’s infill housing program and a scattered-site Brownfield approach are intended to pair market-rate private builds with subsidized city-built units so the brownfield plan can cover the city's losses on the affordable units. Eckholm said the city’s infill housing program “accounted for 60% of all the houses built, new construction in our neighborhoods” between 2018 and 2023. - Rehab vs. maintenance. Hines clarified that NEZ benefits apply to both new construction and qualifying rehab projects; she said ordinary maintenance such as roofs or windows typically won’t trigger a reassessment, but “if you wanted to do full gutting of homes, then you could avail the” NEZ program. - Term length. Hines said a change to the state statute now allows up to 15 years in some cases; the statute phases property tax increases in after year 12 (staff described a step-down in the percentage paid starting in year 13).
Formal actions taken - NEZ—five infill homes (346 Wood St.; 320 Wood St.; 209 Merrill Ave.; 213 Merrill Ave.; 436 Charles St.): Commission motion to close the public hearing and approve NEZ certificates for 15 years and authorize the clerk and mayor to sign the certificate/resolution. Motion made by Commissioner Keener and supported by Commissioner Cochin; motion approved by roll call (motion passes). - NEZ—328 Terrace Pointe Circle: Public hearing and motion to approve a 12-year NEZ certificate for a proposed roughly $600,000 home on the Terrace Pointe waterfront. Motion made by Commissioner Keener and supported by Vice Mayor St. Clair; motion approved by roll call (motion passes). - NEZ—312 Jackson Avenue: Public hearing and motion to approve a 15-year NEZ certificate for a city lot to be developed at an estimated $157,000 construction cost. Motion made by Commissioner Cochin and supported by Commissioner Keener; motion approved by roll call (motion passes).
What was not decided here: Commissioners and staff flagged the need for better outreach and homeowner education so existing Muskegon residents can use NEZ rehab benefits, and staff said it will present more formal rehab guidelines this summer or fall. Staff also said it will conduct a door-knock survey of recent infill buyers to report back with better demographic and income data on purchasers of city and private builds.
Ending: The commission approved the three NEZ actions and asked staff to return with clearer rehab guidance, outreach plans and the results of a forthcoming survey that will detail who is buying houses created through the city’s infill and brownfield programs.
