By Brandt Coultas, Vice President of Government Affairs

In 2004, the city of Ann Arbor changed its affordable housing policy. Prior to 2004, if you wanted to build a residential building in the city that did not meet zoning, 20 percent of the units had to be affordable housing. Now the city requires developers to build 15 percent affordable housing or contribute cash to the city’s Affordable Housing Trust Fund, and the Council gets to choose which option.

When this issue was being considered in 2004, the Ann Arbor Area Chamber of Commerce went on record praising the City Council for reducing the burden from 20 percent to 15 percent and creating a cash-in-lieu option. We also had some concerns. Here is what we told the city:

“If the city is committed to having a cash-in-lieu policy, it must be clearly defined and narrowly interpreted. City Council should include the cash-in-lieu amount and a cap on any annual increase within the (planned unit development) ordinance. Revisiting the cash-in-lieu contribution amount on an annual basis could effectively change the rules mid-stream and potentially impose additional financial burdens on developers who have planned projects based on a previous formula.” (Official Chamber Policy, Board of Directors, 2004)

In short, if you are going to have a cash option, be consistent. Consistency went out the window at the City Council meeting on Jan. 23. The city raised the fee 50 percent from $60,000 per unit to $89,000 per unit. A project with 100 units either includes 15 of the units or pay $1,335,000 to the city’s affordable housing trust fund.

The Ann Arbor area is a desirable place to do business and the city is going to expect the business community to contribute. I get it. But the city didn’t phase in the fee. The fee was raised 50 percent overnight. Fee increases done this way are unfair and unacceptable. They significantly increase the cost of doing business in Ann Arbor, and it isnot just the developers who are impacted by fee increases.

Ask any business that is considering a renovation or an expansion in Ann Arbor and they will tell you how much fees affect their project. The increases also make partnering with the city and working together on projects much more difficult.

The government and business have to interact on every project. The city is the referee and the businesses are the players in the game. How are the businesses supposed to play the game when the ref keeps re-lining the field?