New options considered for city's Baldwin House

By Mark H. Stowers

At a special workshop for the Birmingham City Commission prior to their regular meeting on Monday, September 23, Birmingham Planner Brooks Cowan made a presentation suggesting four options to consider replacing the 30-year-old state requirements that are ending this year for Baldwin House Senior Living, located at 200 Chester Street.

As no action can be taken in a workshop, the city commission will discuss the matter further at an October city commission meeting.

Cowan explained Baldwin House history dating back to the 1970s when the city was evaluating potentially affordable senior housing. A committee was created to study the issue for Birmingham and they concluded it was something for the city to pursue. The city purchased the property from Birmingham Public Schools and out of eight developers they chose Baldwin House and entered into a purchase agreement. When Baldwin House went to find a loan from the State of Michigan’s Housing Development Authority, certain affordability requirements were attached to the loan. When a number of the city’s residents did not agree with those requirements creating conflict with city officials, those officials amended the purchase contract with Baldwin House.

Six of the commissioners eventually lost their seats, three were not re-elected and three were recalled due to the issue with the purchase agreement, including former mayor Dorothy Conrad, and missed the terms of the loan which nullified the agreement. The U.S. Federal Court and Civil Rights Division took the city to court under a violation of the 1968 Civil Rights Fair Housing Act. The court filed an injunction, took jurisdiction against the city and then created the terms of the development for the Baldwin House in the form of a consent judgement. Those terms were for 30 years and many of them are expiring in 2024 as Baldwin House received it certificate of occupancy in 1994.

Baldwin House has two agreements with the state that guide its affordable housing. The first is a low-income housing tax agreement – LIHTC Agreement. Baldwin House was given a $124,000 tax credit that has been deducted from taxes over a ten-year period. This agreement is solely for the affordable low-income housing units. Low-income housing has to be provided per state and federal standards. This agreement is expiring at the end of 2024 and the city has been in talks to maintain that affordable housing for the 53 units.

The second agreement is the mortgage agreement – a pass-through funding, MSHDA Mortgage Agreement. This is a lower interest loan amortized over 30 years with conditions from the state. These had the same requirements as the LIHTC agreements. The mortgage required that 60 percent of the units – a total of 78 – had to average 100 percent of the area's median income for rental rates in Oakland County. In 2024, that equates to $1,600 per month. Once the mortgage is paid off, that average would no longer required and those units are not capped.

The city has to decide if they will continue regulating those 78 units.

There are three more agreements with the city, including a special land use permit ( SLUP) created in 1987, a 1990 parking agreement and a pilot agreement. The SLUP allowed the building to have up to 160 units instead of the normal 53 units for that zoned area. Baldwin House was designed for 131 units.

In regard to parking, Baldwin House does not have the onsite parking that is required by the zoning ordinance. The parking agreement was set in 1982 by court order where the city was found in violation of the Civil Rights Act. The court ordered the city to provide 69 parking spaces in the Chester Street parking garage for free to residents for 30 years. That agreement ends the week of September 27, but there is a 90-day compliance period. Baldwin House would need to pay $1.2 million dollars to be in compliance with the zoning ordinance parking requirement and then a monthly rate of parking passes at current rate going forward. That would be paid in perpetuity due to their shortage of parking. This city advantage would be a bargaining chip in the new agreement related to affordable housing costs.

The Pilot Agreement – which is Payment in Lieu of Taxes Ordinances – currently makes the Baldwin House exempt from local property taxes. They have been paying a shelter fee – four percent of the monies brought in – to help cover emergency visits and other city provided protection and services. In 2022, Baldwin House paid $42,000 in shelter fees. This fee is applied to all 131 units. The state requires the shelter fee to apply to affordable units and then have an additional fee proportional to the taxable value of the market rate units. The city again has a bargaining tool if the Baldwin House decided to uncap the affordable units, as a fee could be applied proportional to the taxable value.

Cowan presented various options to consider for the October commission meeting. Option 1 would uncap rental rates for 78 units but keep the LIHTC Agreement in place for the 53 units for 2025 and beyond. The parking agreement would be for Baldwin House to pay the $1.2 million per the original agreement or create a new agreement for the designated amount of parking spaces free of charge. The Pilot Agreement would have a four percent fee for the 53 affordable units plus a fee proportional to the share of the taxable value of 78 non-affordable units. Option 2 would have most of the regulations keeping everything from the past 30-year agreement, including capping rents for all 131 units. A restrictive covenant would also be added, designating 53 units as affordable, 78 required to have 100 percent AMI rental rates and would be monitored annually by staff in the SLUP review.

Option 3 would modify rent regulations and apply rent regulations to the 78 bonus units enabled by the SLUP.

Option 4 includes modifying rent regulations and apply levels of rent regulations to all 131 units.

Baldwin House currently has 90 tenants, including two families, according to Baldwin House lawyer John Hinkey. In 2019, there were 125 occupants but the pandemic restrictions caused residents to move out and new residents did not move in. Joe Schwartz, a member of the ownership group, stated these numbers and also said that $500,000 has been spent this year in renovation and remodeling work.