InvestUP is looking to use $15 million from the state of Michigan to develop more housing in the Upper Peninsula through its newly established Build U.P. fund.
“We believe we need to find a way to reverse what’s going on with population in the Upper Peninsula, both with loss of population and (the) aging of the population,” said Marty Fittante, CEO of InvestUP, the lead regional economic organization for the U.P., with a mission to drive prosperity across the peninsula.
“Housing is really the greatest constraint we have with regard to standing in the way of population growth; in particular with that younger generation behind mine, 21- to 39-year-olds, that is really important in terms of talented workforce attraction,” he continued.
Using the $15-million enhancement grant overseen by the Michigan Economic Development Corporation, the Build U.P. fund will help assist in making housing development in the region more feasible through two strategies, Fittante said.
The first strategy will see Build U.P. provide local lenders with additional collateral needed to support housing projects.
“Regardless of where it is, if it’s important to a community and the local lender believes it’s an acceptable risk from their perspective to lend against, but the lender doesn’t have sufficient collateral, we’ll go in and at very favorable terms … support that development with a cash infusion of collateral to the local lender,” Fittante said.
The second method will focus on providing money to local municipalities to support infrastructure projects that need to be completed prior to a development project.
“Municipalities in the Upper Peninsula didn’t have the wherewithal to build the infrastructure that was necessary for development. Maybe it’s roads, water, sewer, broadband; they didn’t have the financial ability to put in the infrastructure.”
Fittante explained the Build U.P. fund will invest money into a local municipality so the infrastructure can be built and once the development is complete and generating revenue through taxes, the municipalities will pay back the fund.
Funding amounts for both the collateral support and infrastructure investments can range from $50,000 to $1.5 million, Fittante said.
One of the communities exploring ways to use the Build U.P. fund is the city of Ironwood in the western U.P.
“The city is really excited for this opportunity to potentially have a developer partner with InvestUP to start a new housing development in the city of Ironwood,” said Tom Bergman, community development director for the city of Ironwood.
Bergman said the city is also considering the potential use of Build U.P.'s infrastructure assistance program for 17.5 acres of city-owned property north of Miners Memorial Heritage Park.
Bergman echoed Fittante’s concerns about the lack of housing leading to the loss of skilled employees in the region.
“We lose employees for our industries, the hospital, because people can’t find housing. So we lose a lot of talent opportunities in the community because of (the lack of) housing,” Bergman said.
Along with a shortage of available houses, Bergman said much of the available housing stock consists of older, traditional mining homes.
This problem is not unique to the area around Ironwood, according to a 2022 housing study completed by the Western U.P. Planning and Development Region.
“A great deal of housing stock from the early 1900s remains, much of it still occupied by residents and often in substandard condition. In many communities, such housing is the norm rather than the exception,” according to the study. “Turn-of-the-20th-century homes are common, and in several of the larger communities, more than half of housing units’ structures were built before 1940. Only two percent of occupied housing units were built from 2010 to 2019.”
Although the Build U.P. fund was formed only recently, Fittante is already pleased with its progress.
In the four or five weeks since it was announced, Fittante said the fund has received approximately 16 expressions of interest, with four pre-applications already submitted.
Once the full applications are received, the Build U.P. board will decide whether to support them, Fittante said. Although decisions haven’t been made yet, Fittante was “cautiously optimistic” there were some investment opportunities available out of the gate.
Of the four projects, two are smaller and located in the Sault Ste Marie and Manistique areas; two larger projects are in the Escanaba and Marquette areas.
“We’re excited to see a community like Manistique seeing some interest,” Fittante said. “It’s a downtown development (project), refurbishing a building in Manistique to make it mixed-use and we would be focusing on the residential side of that.”
“It’s nice that it’s diverse in terms of where the interest is from and it’s diverse in terms of what those projects look like,” he said.
All four projects would fall under the collateral program; however, at least two of the other projects that have expressed interest in funding involve infrastructure development, Fittante said.
Fittante knows $15 million isn’t enough to fix the entire housing problem in the U.P., but he's excited to see projects receive funding assistance and for what the success of the Build U.P. fund could represent going forward.
“What I think is as meaningful as the programming itself … is really what this can mean to the larger conversation,” he said. “That is, if we’re good stewards of this money and it works the way we envision that it will, it’s a new model of how the state can really empower regions to allow regions to address their priorities.”
Ultimately, if Build U.P. achieves the kind of success Fittante believes it can, it could provide a path forward on issues beyond the housing shortage.
“I really think this is a new way of really partnering with the state. That’s as important as any piece of what we’ll do on the housing side,” he said.
More information on the Build U.P. fund can be found at buildupmi.com
Editor’s Note: Richard Jenkins is a member of the city of Ironwood Planning Commission. A former reporter at the Ironwood Daily Globe, Jenkins moved to Ironwood in 2015. He was born and raised in Metro Detroit. He may not have been born in the Upper Peninsula but got here as soon as he could.