East Village Landlords Want to Improve Properties, But City Says No

Thursday, January 21, 2016, 12:32 pm
By: 
Alice Dreger

Above: One version of what the City thought the East Village could look like if redeveloped

Tomorrow, the City of East Lansing will host the first meeting of the group convened by City Council to address landlords’ concern about the City telling them they may not make improvements on certain properties. Since 2011, the City has determined that landlords cannot make certain changes to their buildings if they are “nonconforming”—that is, if the buildings don’t meet the zoning for that property.

In ELi’s detailed, plain-language explanation of the issue, we focused on nonconforming rental houses. These are typically houses in the older, near-university neighborhoods—homes originally built to be one-family, owner-occupied houses that are now rentals. Homeowners in those areas have many concerns about letting landlords make changes to the properties, as we noted in our report.

But Nancy Marr of Prime Housing Group (a major East Lansing landlord) points out that old houses in largely owner-occupied neighborhoods are not the only properties caught in the prohibition on improving nonconforming properties. Last week, she invited me to 208 Cedar Street, a large apartment building in the area behind the McDonald’s on Grand River Avenue, near Bogue Street, to see the problems her local, family-owned business is facing because of the current rules.

To understand the situation at 208 Cedar Street, you have to first know the background on what the City calls “East Village.” This is a 35-acre area that is bordered by Bogue Street on the west, Grand River Avenue on the north, Hagadorn Road on the east, and the Red Cedar River on the south, as shown in this map from the City:

In 2006, the City entered into an agreement with Pierce Education Properties, a development company. The City’s plan was for “an innovative project to create an exciting urban neighborhood known as East Village. This high-density, mixed-use development will be a unique addition to our city, enhancing the college town atmosphere.”

It never happened, and in 2009, the plan was officially put “on hold” by the developer, “due to the recession and its impact on the development industry and capital markets.” But the zoning changes the City passed in 2006 for the East Village redevelopment remain in effect. And those zoning changes made virtually every building in the entire 35-acre area become “non-conforming.”

That’s because the new zoning requires that for every building in the area “at least 50% of the first floor of each building . . . be used for retail or office uses.” It also required that the first properties redeveloped include a certain percentage of condominium units. Most existing properties in the area are nothing like this. None of the properties Prime Housing Group owns here—seven apartment buildings and the building that houses B/A Florist—fit this requirement. This makes all these properties now count as “non-conforming.”

So if Prime Housing Group and the other area owners want to make significant changes to their properties, they would have to significantly change the buildings so that they will conform to the post-2006 zoning. And that’s just not economically doable.

At 208 Cedar Street, Nancy Marr showed me what this means in concrete terms. As you can see in the photo below, the building has what appears to be a few balconies. In fact, they are not now usable as balconies, because Marr’s company has closed them off to tenants. (Balconies in student rentals tend to invite mischief, Marr explained to me.) What Prime Housing Group would like to do is to “pop out” the outer wall to give the unused “balcony” space to the apartments inside. But they cannot do this under current rules.

Marr also showed me inside a couple of the apartments. (She notified the tenants several days before.) In both cases, the apartments had large bedrooms that could be divided into two. In one case, the bedroom had two queen size beds and still plenty of room around both beds. Dividing the bedrooms, she explained, would not increase the number of renters (the density), but would give the student renters more privacy, and thus make the apartments more attractive. In both apartments, the kitchens were poorly designed 1960s-style spaces. Marr explained they would like to upgrade the kitchens to give their renters better cooking spaces.

The City’s website on the East Village says that the City “continues to pursue the goals of the East Village Master Plan,” suggesting the Planning Department has no interest in changing the zoning from the 2006 major redevelopment plan. (Our current mayor, Mark Meadows, was on Council when the East Village zoning was changed.)

This means that unless something changes in terms of how the City regulates nonconforming-use properties, or the State overrides East Lansing’s ability to govern this issue (as the landlords have tried to make happen), landlords like Marr in the East Village area will continue to be told they cannot make changes they want to make.

Marr notes this was not the case before 2011, when a change in interpretation by the City Planning Department led to landlords no longer being able to get permission to make changes they were able to make before. Says Marr, “we can't figure out why the City is no longer allowing such improvements to the interior or exterior. We don't want to tear down our properties and redevelop right now – [something] which would actually increase density. But we would like to make reasonable modifications to our properties to better accommodate our residents.”

The new Nonconforming Use Study Committee will meet for the first time tomorrow, Friday, January 22, from 10 a.m. to 1 p.m. in Conference Room A of City Hall. The meeting is open to the public.

 

UPDATE: When published, this article incorrectly stated that, in East Village, Prime Housing Group owns nine apartment buildings, a rental house, and the building that houses B/A Florist; Prime Housing Group owns those buildings, but only seven apartment buildings plus the B/A Florist building are in East Village. The article has been corrected.