Somehow, it doesn’t seem to add up: Northwest Lower Michigan’s population is rising, but the number of people living in its towns and villages is falling.

Apartment hunting in the region quickly reveals one reason behind this apparent mystery: Cities and towns have a shortage of quality, right-sized housing for people who live alone or in pairs. With America’s average household size falling, more singles and couples are forced to move into homes that have too much room. This not only wastes some of their rent or mortgage money, it also leaves lots of unused bedroom space, which effectively pushes down that community’s population.

That harms local businesses, revenue-sharing formulas, and school enrollments—and concentrates taxes on an ever smaller number of people.

This is why officials in Traverse City, Frankfort, Suttons Bay, Petoskey, and some other area communities are now looking at reviving regulations allowing more so-called "accessory dwelling units." Also called "granny flats," "carriage houses," or even "mortgage helpers," these small upstairs and backyard units, usually for one or two people, were common in the late 19^th and early 20th centuries in many towns, large and small.

While most of the communities looking at the idea have stirred almost no controversy, the opposite is true in Traverse City, where previous attempts to legalize ADUs have actually failed. There, some residents, landlords, and realtors—including several with an interest in keeping rental markets tight—raise fears about crime and blight to make their case. Some say that granny flats will bring more renters into their neighborhoods; others that the flats will change the character of the community, lead to all sorts of parking problems, and bring more single people to neighborhoods that are zoned for single families.

The Traverse City Planning Commission will hold a public hearing on June 6 at 7 p.m. at the Governmental Center, where ADU supporters and opponents will doubtless engage in a lively debate over the proposed new ordinance.

Suttons Bay Revives a Tradition
Granny flats are part of a tradition that goes back more than 100 years, to when widows used carriage houses to supplement their income, couples summered in them and rented out the main house to tourists, and bachelors, young couples, and workers found them to be affordable places within walking distance of work.

With household sizes in northwest Lower Michigan’s 10 counties falling by about almost a third in 30 years—from 3.28 people per dwelling in 1970 to 2.48 in 2000—and about two thirds of the region’s households now just one or two people, allowing more granny flats makes sense to many people. They say it would protect the all-American traditions of close-knit, walkable neighborhoods, ample open space, and a peaceful countryside.

"It just makes wise use of the land," Frankfort City Manager Josh Mills said. "It’s a Smart Growth direction that we should follow."

At least one northwest Michigan village, Suttons Bay, has already legalized the accessory dwelling units scattered throughout its traditional neighborhoods—and made it possible for other homeowners to build them as well.

The idea, explained Suttons Bay Planning Commissioner Kathy Finch, was to legalize something that was already working for the community as the village rewrote its zoning ordinance for the 21st century.

"We’re maintaining this historical character of the community by continuing to allow them," said Ms. Finch. "They weren’t legal before, but the goal of our new ordinance is to try to reduce the number of nonconformities."

Despite dark warnings to the contrary, Suttons Bay’s longstanding granny flats have caused so few problems there that not a single person bothered to comment when the village proposed legalizing them as part of the new zoning ordinance, said Ms. Finch.

"This isn’t a new topic for us," she said.

The new ordinance, however, does respond to the community’s pressing new need for more housing choices, especially in the low- to mid-price range. The village understands that it can increase its population, local business opportunities, and school enrollments by encouraging the kind of walkable, mixed-income neighborhoods that ADUs facilitate.

Ms. Finch also pointed out that legalizing ADUs makes it easier to regulate them. The new Suttons Bay ordinance limits the size of the units to 600sq. ft., limits occupancy to two people, has strict requirements for off-street parking and setbacks, and requires the property owner to live on the premises.

Frankfort Finds a New Model
Frankfort, too, is looking at traditional ways to meet modern housing needs. The city is revising its master plan, and officials want to encourage an increase in the town’s year-round population. They know that local businesses struggle through the winter, and that generating new jobs, converting summer jobs to year-round employment, boosting school enrollments, and keeping tax revenues steady depend on a good supply of homes that younger families and workers can afford.

Officials also say they want to keep the city attractive and efficient by preserving 60 percent of Frankfort’s un-built areas as open space, and by encouraging compact development that saves money on road, public safety services, and sewer, water, and utility extensions. So Mr. Mills is pushing for walkable neighborhoods that include accessory dwelling units or neo-traditional carriage houses. He pointed to precedents that can guide the regulation of Frankfort’s granny flats.

"What’s historically happened before zoning was in place was that they built carriage houses proportionate to the primary dwelling," he explained.

Mr. Mills said the city is considering ADU standards that would echo those traditional proportions by limiting outbuilding heights to 18 feet and square footage to 60 percent of the footprint of the house. The standards would forbid ADUs on lots with single-story houses.

As Frankfort works on its new, cutting-edge master plan, residents can look at a three-dimensional computer simulation of the entire city. Mr. Mills believes that good information, accompanied by crystal clear illustrations, will build community support for—and participation in designing—Frankfort’s new master plan.

"This virtual model is so real," said Mr. Mills. "People can actually see their own house. We think this will be a huge tool."

Petoskey Follows Demographic Trend
In Petoskey, ADUs are already legal. Residents just have to make a request to the zoning board to get permission to build one. But, with the community crafting a new zoning ordinance that fits its demographic reality, planner Amy Tweeton said the requirements, regulations, and approval process for ADUs need to be better organized.

Ms. Tweeton indicated that the town expects the market for smaller backyard apartments to grow.

"Here it’s demographically driven," said Ms. Tweeton. "With the aging population and people living longer, that gives you that ‘sandwich population’ that has kids in college and living grandparents—and parents trying to support both of them."

Streamlining the process of building an ADU, she said, will make it easier for family members to take care of each other and get a little space and privacy at the same time.

Traverse City Tries Again
In Traverse City, a declining population, school closures, and the steady rise in home prices have some city officials thinking about legalizing granny flats—albeit with restrictions protecting neighborhoods from parking, absentee landlords, and privacy problems. Currently, homeowners who want to build ADUs must endure a hearings process with the city that is arduous enough to have brought the construction of granny flats to virtually a complete halt.

City Commissioner Matt Schmidt reintroduced the idea of allowing granny flats "by right" earlier this year, sparking anger from some local residents—and at least one major apartment company owner—who claim that ADUs are guaranteed bad news. But many city officials—as well as a large group of ADU proponents who showed up at a planning commission meeting in early May—insist that the small rental units would help, not harm, the city.

"My personal opinion is that ADUs have a really good purpose and great potential," said Traverse City Mayor Linda Smyka, "but they also carry with them a lot of perceived threats that are very difficult to dispel."

Three years ago, the city planning commission approved a "by right" ADU ordinance, but the city commission voted it down when opponents claimed that the units would generate parking, traffic, noise, crime, and privacy problems. The ordinance that the commission is now considering responds to those fears; it controls the number of cars parked on any lot and where they can be parked; requires designs that protect neighbors’ privacy; and demands that homeowners live on premises where the ADU is located.

"The biggest negative people bring up are shady characters moving into the neighborhood," said City and Planning Commissioner Jody Schmidt, who was on the planning commission the last time it approved an ADU ordinance. "That would be the last thing on my list of worries. Owners won’t put up with too much before they say, ‘You’re out!’"

For Maurie Dennis, a longtime Traverse City resident, Rotary Club member, and board member of the city’s National Cherry Festival, it’s clear that accessory dwelling units don’t harm the neighborhood. He should know: He has one in his backyard.

Mr. Dennis added a small, one-bedroom apartment on the ground floor of his garage; today his father and his wife’s mother (who married each other a few years after their children did) lived there for six months each year, for 12 years. With three of their four grown children, one grandchild, and their two parents in town, the house is a major family activity center in the summer. The granny flat, which is invisible from the street, allows everyone to spend more time together, while allowing some space and privacy.

Mr. Dennis, who is a landlord, said he is not worried about competition from accessory dwelling units, should they be legalized. He said homeowners and landlords can be trusted to make rational decisions about building ADUs or buying more rental properties.

"It’s free competition," he said. "I don’t see why the city should restrict it."

Carolyn Kelly is the Michigan Land Use Institute’s associate editor. Reach her at carolyn@mlui.org The Traverse City Planning Commission will hold a public hearing on the proposed ADU ordinance on Wednesday, June 6, at 7 p.m., in the Governmental Building on Boardman Street in downtown Traverse City. This story first appeared in the Northern Express on May 27, 2007.