Muskegon approves sale of vacant lots for small-scale duplex/ADU pilot; garden moved one block, one unit reserved for Goodwill program

Muskegon City commissioners voted to sell multiple city-owned vacant lots to small-scale developers and to advance a local pilot aimed at creating workforce housing using duplexes with accessory dwelling units (ADUs).

The commission approved selling 528 Oak to Arnold Inc. Properties, LLC; the director of development services said that sale is tied to two consent items — a workforce-housing restricted covenant and a housing tax exemption — that support affordability on the parcel. Commissioners later approved sales of 303 and 370 Allen as part of the same small-developer consortium model. The Allen sales included a negotiated plan to keep a neighborhood community garden in the vicinity.

The pilot is intended to enable “incremental” developers to build multiple small projects using the same floor plans and finishes so they can purchase materials at scale and access construction loans. Jake Eckholm, the city’s director of development services, said the Oak lot will be split to create two buildable parcels; each is planned for a duplex with an ADU behind it. "So this lot in particular, 528 Oak, is to be split after closing, to make way for 524, which would be the newly addressed 524 and then 528 Oak, the parent parcel, to do 2 duplexes along with accessory ADU," Eckholm said.

Developer Kara Novak, who represents Arnold Inc. Properties and related small investors, described the units as narrow duplexes (about 24 feet wide by 56 feet deep) with a 20-by-24-foot (420-square-foot) one-bedroom ADU at the rear. Novak said the ADUs are planned as single-level, walk-in units intended for people who need easy access. "It would also have the accessory dwelling in the back, which is a 1 bedroom, 1 bath," she said.

Novak and Eckholm described the affordability and program rules the city will require for the pilot. Novak said units will be marketed to households at 120% of area median income or below and that the pilot limits rent increases while a unit remains under the pilot. "So we cannot charge more than 30% of their annual income... The pilot runs for 15 years," Novak said. Eckholm confirmed the development team plans to seek MSHDA-related supports and to use a local pilot model similar to prior small-scale projects.

Commissioners asked practical questions about parking, utilities and heating. Novak said each duplex will use a shared center driveway with parking behind the buildings and that the duplexes will have gas service while the ADUs would be all-electric. Novak also said the group has explored solar grants for later add-ons.

The Allen Street sales included a separate neighborhood issue: a community garden that had been established across several lots on Allen. Eckholm described a months-long effort by staff, the Angel Neighborhood Association and the garden group to find an alternative location after developers proposed building on the original parcels. He said the group identified 290 Allen (previously included as a passed consent item) as a lot the developers could use to relocate beds, storage and a water tap. "We will relocate all the garden's assets at the end of the season to that lot on 290 Allen, and then, it will be able to remain in place, with no reduction in number of beds," Eckholm said.

Eckholm said the garden would lose a net of roughly 10–15 feet compared with the original 2014 neighborhood agreement, because lot lines were reconfigured; he said staff will fund moving the water tap and provide a replacement storage box. Garden representatives and the Angel Neighborhood Association provided letters of support that the clerk distributed to commissioners during the meeting.

The Allen projects also include one unit that city staff said is expected to be held for a nonprofit partnership. Eckholm said developers had initially explored renting to traveling nurses but pivoted to a partnership with Goodwill Industries of West Michigan to reserve a unit for the returning-citizen program, subject to a finalized agreement between the developer and Goodwill.

Votes at the meeting: the sale of 528 Oak (motion by Commissioner German, supported by Vice Mayor St. Clair) passed by roll call with all commissioners voting yes; the sale of 303/370 Allen (motion by Commissioner German, supported by Commissioner Kilgo) passed by roll call (Kochen voted no; remaining commissioners voted yes).

Why it matters: city leaders said the pilot is designed to increase infill housing supply on small lots, preserve neighborhood gardens where possible, and provide a model that lets small developers produce affordable units without relying solely on large institutional builders.

Practical next steps: developers will finalize financing and leases; staff said some project components — building permits, parcel splits and the workforce-housing covenant — must be completed before construction begins. The community garden group will be assisted with relocation at city expense if needed.