Commission discusses possible changes to downtown diverse‑housing rule after developer presents redevelopment concept

Commissioners opened a broad discussion July 9 about potential changes to East Lansing’s downtown diverse‑housing requirement after public commenters and the city manager circulated proposed ideas, including a fee‑in‑lieu option and expanded geographic transferability of affordable‑unit credits.

Attorney Carrie Freeman, representing a redevelopment interest for the Student Bookstore (SBS) parcel, urged the commission to consider amendments that would allow a fee‑in‑lieu payment instead of on‑site affordable units. She told commissioners the redevelopment could "pump a lot of revenue" into the city and estimated the project might contribute nearly $2 million to a proposed affordable‑housing fund. Freeman said the current ordinance has not produced projects that meet the 25% requirement in the downtown over the past decade and argued a fee option and expanded transfer rules would make redevelopment feasible.

Developer and downtown business owner Greg Balline, who said he manages the student bookstore, described the economic pressures facing the store and downtown foot traffic since the pandemic and urged flexible options to enable redevelopment. "My bookstore has been failing for a number of years," Balline said, noting he has planned a mixed‑use redevelopment (market‑rate/student housing and retail) and that the current ordinance's financing expectations make on‑site affordable units difficult for certain mixed‑use projects.

Planning staff summarized the existing rule in the downtown and four potential directions for change that the city manager outlined: expand the sending area where affordable units or credits can be located outside the DDA; modify credit ratios for for‑sale versus rental product; include Housing Choice Vouchers/Section 8 in calculations; and create a fee‑in‑lieu fund to be used for affordable housing. Staff emphasized no ordinance has been introduced by council and that the redline language in the packet was a private party proposal rather than a council referral.

Commissioners asked for more fiscal detail and examples of comparable programs in other cities; several requested staff and the city attorney produce draft ordinance language and analysis. One commissioner suggested any new mechanism include a five‑year sunset for evaluation. Commissioner comments ranged from openness to innovative approaches that could unlock redevelopment to caution about ensuring strict parameters for how any fee‑in‑lieu funds would be managed and spent.

The commission did not take a vote on ordinance language. Instead commissioners asked staff to provide comparative examples from other jurisdictions (preferably college towns), an analysis of how similar fee‑in‑lieu programs have performed, clarification of fund governance and spending parameters, and an updated redline if council elects to refer an ordinance. Staff said they would attempt to return materials to the commission by the July 23 meeting, or otherwise on the August 13 agenda.

The discussion also included preliminary project details presented by the applicant for the SBS parcel, under the working name "the Howard": a mixed‑use redevelopment with retail at street level and multi‑unit housing above (the applicant provided a conceptual packet showing a roughly 25–30k sq ft footprint and an estimated 300+ units in stacked student housing formats). The applicant presented a 20‑year tax projection showing higher taxable value and estimated incremental tax revenue to schools and city versus the existing use; staff and commissioners asked for independent verification of those fiscal figures and noted that exact tax distributions to school and city depend on assessment and state formulas.

Next steps: commissioners asked staff to prepare comparative and fiscal analyses, draft ordinance language if requested by council, and options for governance of any fund should a fee‑in‑lieu be adopted. No ordinance was referred for public hearing at this meeting.