Tourists in the north allocate housing for local workers. Employers build themselves.

There are new rooms coming to Grand Traverse Resort and Spa but they are not for guests.

In the face of rising housing prices and rents, the resort’s pool of seasonal labor continued to dwindle as prices for workers living in the city ran out.

Next month, the resort will begin constructing additional staff accommodation to provide another 40 rooms. HR Director Matthew McClellan said it’s a need the resort has seen for years to come and the project has been budgeted to start in 2020.

The competitive housing market and tight job market have converged on a larger issue for the hospitality industry.

A survey conducted by the Michigan Restaurant and Accommodation Association in May found that 60% of restaurant and hotel operators surveyed said “inadequate affordable housing” was a challenge to the workforce. Among hoteliers specifically, 89% said they see this as an obstacle to hiring.

The survey included 146 responses from Michigan restaurant and hotel operators, representing more than 500 locations and nearly 15,000 employees statewide.

In response, MRLA President and CEO Justin Winslow said housing was among the barriers slowing the hospitality industry from its “much-needed return”.

“We were surprised by the degree to which the availability of affordable housing negatively impacts the statewide hospitality sector workforce,” Winslow said. “It appears that this problem is no longer strictly confined to sites focused on tourism, which indicates the need for a legislative solution to address this problem before it gets worse.”

Related: Millions were spent on Airbnbs in Michigan last year. Find out which county earned the most.

The pandemic has exacerbated what McClellan calls a “virtually nonexistent” domestic market. Working under staff shortages is becoming less sustainable as travel picks up and waiting for a full return is very costly.

The resort will press ahead with its $1.5 million investment in staff housing this summer.

“We can’t wait any longer,” McClellan said. “The longer we wait, the more likely our employees will endure this kind of stress and those hours [which] It reflects the quality of service and we do not want it to affect the quality of service our guests experience here.”

The median rent in Traverse City is $1,400 for a one-bedroom, according to Apartments.com.

Providing rent across town is out of reach for the seasonal restaurant and housekeeping staff. This limits the local labor pool to retirees and students, McClellan said.

The same can be said of neighboring Glen Arbor, home of the Cherry Republic.

Marketing intern and college senior Quinn Gilroy has packed her bags in Portland, Oregon and will spend the summer along Glen Lake in one of the recently purchased homes in the Cherry Republic.

Glen Arbor was a Gilroy childhood getaway when her extended family would spend time there every summer. When Cherry Republic began offering housing, it became a ritual for every summer cousin to work at the popular Michigan retailer when they turned 18. Gilroy is already in its third year.

“When I was a kid, this was my favorite week of the year coming here and going to the Cherry Republic,” she said. “I was five years old so jealous that I get a free soft drink and ice cream every day.”

President Bob Sutherland sees housing as the responsibility of the Cherry Republic as a major employer in the region. By providing housing for out-of-state employees, his business does not remove housing or local labour.

“I feel we are somewhat compelled to the big companies to go further [mile] To leave this current gathering as much as we can for others as well,”

The impact of the housing crisis on tourist sites is hitting home for Sutherland, who grew up in Glen Arbor and started his business out of the boot of his car.

“Glenn Arbor, and some of these smaller towns, haven’t found the next generation of business owners,” Sutherland said, “We’re really going to feel the bite because right now, there’s a change happening where a lot of older business owners are ready to retire, but nobody in queuing to buy their business or takeover.”

Sutherland said future business owners do not feel confident that they will have the workforce to support them if they take over a business.

Cherry Republic has invested thousands in renovating and purchasing housing in the Glen Arbor and Traverse City area.

The retailer invested $35,000 to renovate Leelanau School so that the boarding school can be used by summer staff after students leave. In addition, the company has partnered with campgrounds and RV parks for seasonal workplace conservation.

Another $650,000 was invested in purchasing and renovating homes near Glen Lake. Next summer, Cherry Republic employees in Traverse City will have the option to live above the retail space in brand new apartments currently being built.

“We didn’t realize it was something that was escalating and going on,” Sutherland said. “When I first bought this house, I thought one place or one condo would suffice, but it keeps deteriorating and every year we keep making these investments.”

Sutherland is long-term looking to build an apartment complex, but he doesn’t think private companies can solve the problem on their own.

Related: Roughly 50% of Michigan renters pay a lot. The state wants to fix that.

In May, Michigan’s first statewide housing plan was launched. A needs assessment supporting the plan found that about 50% of renters and 25% of homeowners are paying too much for housing.

Michigan’s five-year housing plan aims to create more than 1,000 new housing units for the workforce as part of its overall goal of creating or maintaining 75,000 housing units.

A statewide housing assessment found that 44% of vacant units in Michigan are vacation properties.

Ed Grace, president of Boyne Mountain Resort, said he’s seen housing as an employee issue in the past seven years as more vacation homes and short-term rentals have filled the Boyne City area.

“It’s hard to be famous,” he said.

To secure Boyne’s seasonal workforce, Cliff Dweller Lodge has been renovated to accommodate 70 to 80 employees.

Grace estimates that about 20% of his current employees use the provided housing, but they are still looking to expand. He said the resort could already use another 100 beds.

“You have to invest in your team and your people, and if this is one of the investments we have to make, it has to be a good investment,” Grace said.

The biggest problem is accommodating year-round workers who want to move with their families. Rent in the area is “almost out of the question” and so families are moving from Gaylord and Belair. Grace fears that the short supply of housing will have a ripple effect on the residents of the entire community.

“Not only as a resort, but in our community as well, we can’t grow until we can safely house the next group of people coming in who want to live here,” Grace said.

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