“Traverse City is becoming Myrtle Beach meets Hilton Head — a place catering to a population outside the region,” Mr. Treter said. “Our work force can’t live here anymore.”
Mr. Treter and others in this small Lake Michigan community with a population of nearly 16,000 came up with a solution: a 47,000 square-foot building that offered spaces for residences, businesses and community activities that had been in short supply as gentrification in the city pushed prices up and local residents out.
What sets this project apart from others like it is how it’s paid for. Mr. Treter developed the space with Kate Redman, a lawyer who works with nonprofit organizations, and several other entrepreneurs who were dealing with similar challenges. They created a crowdfunding campaign that recruited nearly 500 residents to invest $1.3 million as a down payment to help finance the project’s construction and earn up to 7 percent annually in dividend payments. Roughly 500 more residents contributed $50 each to join the project as co-op members.
The $20 million development, called Commongrounds, opened late last year. It is at full occupancy and consists of 18 income-based apartments (rent below market rate based on median income), five hotel-like rooms for short-term rentals, a restaurant, three commercial kitchens (for the restaurant and to be used for events and classes), a food market, a coffee training center (for new hires and developing new drinks), a 150-seat performing arts center, a co-working space, offices and a Montessori preschool.
This will certainly gain momentum as awareness of the concept grows. While this is overall great news that we’re coming up with repeatable ways to sidestep the usurious real property market, I’m concerned about same. How long is the window until these are made illegal again and then an engineered recession puts all these buildings in the hands of capital?
Precisely why we must make more demonstrations of this, and find ways to codify protections that prevent such negative outcomes. It starts with spreading the word of this success to other potential towns that would benefit from a structure such as this. There are lots of small community land trusts whose basic principle is keeping the land affordable and ensuring it serves the community. There’s also a strong movement to have community owned utilities be the norm. Lots of intersections there that we could learn from and that would bring the residents economic prosperity over time.