Muskegon City approves several Neighborhood Enterprise Zone certificates to support infill housing

Muskegon City Commissioners voted to approve multiple Neighborhood Enterprise Zone certificates on April 22, authorizing NEZ tax-abatements for five scattered-site infill houses, one waterfront lot at Terrace Pointe and one city lot on Jackson Avenue.

The action, taken after public hearings, will allow certificate recipients to receive reduced millage rates over the abatement term. Jocelyn Hines, the city's development analyst, told commissioners the NEZ millage rate is 17.52 mills for owner-occupied properties and 26.95 mills for non-owner-occupied properties, compared with the regular rates of 43.3152 mills and 61.3152 mills respectively. Hines said the five addresses initially discussed have estimated construction costs between $140,000 and $210,000 and that the city is issuing certificates for 15 years for those properties.

Why it matters: Commissioners and staff framed the approvals as part of a larger infill housing strategy that mixes city-built subsidized homes with privately built market-rate units to make new housing feasible. Commissioner concerns focused on whether local residents are benefiting and whether the city is doing enough to reach longtime Muskegon residents.

Commissioners pressed staff and a present developer about who is buying the new homes. Developer Steve Benedict, who said his company will build 27 homes across several neighborhoods, told the commission that of 22 homes built last year only one buyer was from Muskegon County. "Last year of 22 homes, only 1 person moved inside of Muskegon County, and she came out of Muskegon Heights," Benedict said. He said the program reduces monthly housing payments by about $300 to $400 over 15 years and that prices for new construction in some neighborhoods range from roughly $225,000 to as high as $375,000 for larger homes.

City staff explained how the NEZ approvals fit into the city's infill and brownfield approach. Jake Eckholm, director of Development Services, described the program as intentionally mixing market-rate private builds with city-subsidized homes to make the brownfield financing work: "The city builds a home and markets it below cost to create an affordable option, and private market-rate units help the brownfield plan recoup costs so we can keep building." Eckholm said the infill program provided 60% of new-construction homes in the city from 2018'to'2023 and that staff will begin a resident survey to gather demographic and economic information about buyers in the infill program.

Commissioner concerns and staff responses: Commissioner German, whose ward includes several of the new units, said the pattern feels like displacement and gentrification when many buyers are from outside the city. "The people that live in Muskegon ... the hardworking people ... are the ones that's coming up short and displaced," German said. Eckholm acknowledged that growth and a tight regional market make some out-of-town purchases unavoidable, but he said the program is designed to produce units affordable to households at or below 120% of area median income and that the city markets with local realtors and targets half the units for lower-income buyers.

On statute and term lengths: Staff said statutory changes affect maximum certificate lengths. Hines explained that some waterfront properties are limited to 12-year certificates while recent statute changes allow 15 years in other contexts, and that the 15-year NEZ certificates phase in taxable value (for example, 75%, 50%, 25% before full property tax is due at the certificate's end).

What the commission approved: The commission approved NEZ certificates for 346 Wood St., 320 Wood St., 209 Merrill Ave., 213 Merrill Ave., and 436 Charles St. (15 years); a 12-year certificate for 328 Terrace Pointe Circle (waterfront); and a 15-year certificate for 312 Jackson Ave. All motions passed by roll call votes during the meeting.

Next steps and follow-up: Staff plans to return with a formal outline of NEZ rehab guidance for homeowners later in the summer or fall and to carry out the household survey Eckholm described. Commissioners requested stronger outreach and homeowner-education programs so Muskegon residents can better compete for new and rehabilitated units.

Ending: The NEZ approvals advance the city's current infill and brownfield housing strategy, but commissioners signaled they will continue to press staff on outreach, program targeting and data to ensure more locally based residents can access new and rehabbed housing.