A Progress Report From Larry Mawby's Ambitious Affordable Housing Organization

One home available for purchase in Suttons Bay, a duplex in Lake Leelanau occupied by two renters, and a 10-acre property in the Suttons Bay area that could eventually accommodate up to 80 new housing units. These are some of the holdings of Peninsula Housing, the Leelanau-based nonprofit that launched last year with the goal of increasing the stock of affordable, attainable housing for year-round county residents. According to Larry Mawby, who formed Peninsula Housing after stepping down from day-to-day operations at MAWBY – the namesake winery he founded 50 years ago – the organization is just coming into its own, with 2024 shaping up to be a big year.

When Peninsula Housing formed, it became the first housing organization in Leelanau County to operate under as a Community Land Trust (CLT), a model designed to hold land in perpetuity.

Instead of selling land for development, a CLT leases the land long-term – typically for 89 or 99 years. While leased land can be developed for purposes like housing – and while a home built on CLT land can be bought, sold, or owned – the CLT always maintains ownership of the land itself. As a result, someone buying a home from a CLT would be able to get a more affordable price than is typical, simply because they would be buying the house and not the land. In exchange, the homeowner agrees to comply with the terms of the lease. if they decide to sell the home, for instance, they must do so at a restricted price. This structure allows CLTs to lock in affordability in a relatively future-proofed manner.

Since launching, Peninsula Housing has been working to acquire properties it can bring to market as affordable housing. Last November, the organization announced it had secured its first home, a three-bedroom house on Herman Road in the Village of Suttons Bay. And last month, Peninsula Housing put the word out that the Suttons Bay house had been successfully renovated and was officially ready for a buyer.

“We did a lot of energy improvements that enhanced the efficiency of the home substantially. Our goal was to try to make it more affordable for people to maintain it. That, to me, is a big part of affordable housing, is to keep the cost of operation down," Mawby says of the Suttons Bay house.

For those improvements, Peninsula Housing relied on a significant amount of volunteer and pro bono work from community members. Mawby tells the Leelanau Ticker the general contractor on the project “is charging nothing for his time at all,” and that all the interior painting work – including paint, supplies, and labor – was also donated.

Saving big money is important for a CLT like Peninsula Housing, given that the organization’s goal is to offer the home to somebody making about 80 percent of area median income (AMI). The Suttons Bay home is listed for a price of $220,000 and is intended to be affordable “to a family with an income of $79,000 to $98,000,” per a Peninsula Housing press release. That price, Mawby says, is less than what it cost Peninsula Housing to buy and rehab the property, even with all the pro bono work. The organization has already received about a dozen inquiries about the house from potential buyers.

Peninsula Housing also acquired a duplex in Lake Leelanau and is now operating both units as long-term rentals. “We paid full market value for the property, but the landlord had been offering it well below market rents, and we’re going to keep it that way,” Mawby says. “It’s rented at a rate that people who make about half of the AMI should be able to afford.” That property, Mawby adds, is currently occupied.

While those two properties are Peninsula Housing’s first official ventures into the affordable housing market, the organization is aiming to bring more units online in the coming months and years. In the near term, Mawby says the CLT is “very close to acquiring” two more homes – one in Suttons Bay and one in Northport – that it will eventually sell as affordable housing.

The organization’s biggest project on the horizon, meanwhile, involves a 10-acre parcel it acquired at the end of last year “really close to the Village of Suttons Bay” (map pictured). Currently, the property encompasses several structures, including a farmhouse that is being rented to a local family “at a really, really low rate” and five outbuildings that will eventually be demolished. Mawby says the plan is to develop the whole property “with a range of housing option,” likely including a mix of single-family dwellings for sale and apartments for rent.

“Based on the zoning, the township could potentially permit up to 80 units on the 10 acres. So, that will be a big project for us," Mawby says.

Mawby adds that Peninsula Housing should hear the results this month of a $50,000 planning grant from the state. “If we get the grant, we intend to work with a planning development firm, and to engage the community – including the residents and the elected and appointed officials in both the Village of Suttons Bay and Suttons Bay Township – to get feedback on what people think we should do here.”

The other big priority for Peninsula Housing right now? Fundraising. As Mawby explains it, the CLT model – especially in a high-price real estate market like Leelanau County – is inevitably a money-losing proposition. “Say we buy a house for $380,000, which is probably close to what it’s worth [in terms of market value],” he says. “If we then sell it for $220,000, we need to find $160,000 to cover the difference. So, it’s a continuous process of fundraising, but it’s important to us because we know that, when housing is inaccessible to the working people, it really guts communities.”

CORRECTION: An earlier version of this report erroneously stated that Peninsula Housing was seeking a $500,000 planning grant from the state. The actual amount of the grant would be $50,000.