Two decades ago, being 553 miles from Detroit was an asset for Houghton. Now being 35 miles from Eagle Harbor Beach, 65 miles to the Porcupine Mountains and 145 miles to Pictured Rocks are bigger draws for the city situated in the center of Michigan’s northernmost Keweenaw Peninsula.
With remote work becoming the norm and an uptick in outdoor recreation, the whole region of the Upper Peninsula has changed its branding strategy, InvestUP CEO Marty Fittante said.
“The new emphasis upon quality of life, recreational resources and natural resource assets – marry all of that and I think it became much easier to say, ‘why not us?’” Fittante said.
For organizations focused on economic development, a crucial component is a growing workforce. But the U.P. needs a population boost.
From 2010 to 2020 every county in the U.P. lost residents, except for Houghton, which grew by 2% or 733 people, according to U.S. Census data.
It’s a circular challenge, though. A rush of new residents requires more housing and better transportation. It also spurs a bit of an identity crisis. Can the U.P be both an isolated oasis and an economic powerhouse?
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David Rowe, CEO of the MTEC SmartZone, would say “yes.” Rowe and his team connect entrepreneurs with technology, investment and marketing resources.
Especially in the tech sector, the U.P. has Silicon Valley-like jobs in space, software and electric vehicles, but with a fraction of the housing costs and the bonus of untouched nature along the Lake Superior shoreline. Among the three U.P. SmartZones, state funded business accelerators focused on tech, there were 294 new full-time jobs created and 1,076 jobs retained from October 2021 to September 2022.
When pitching the U.P.’s prospects, Rowe runs down the list of everyday scenarios: running into electrical engineers on the cross-country trails, biking alongside software developers or walking the beach with a space electronics expert.
“Instead of using our location and explaining it away, and apologizing for it, now it’s an asset,” Rowe said.
But there are challenges to being desirably distant. New business can’t ignore the realities of being remote.
Transportation
The regional airports servicing the U.P. were already running a limited schedule when the national pilot shortage axed direct routes.
Regional airline service SkyWest altered routes last fall at airports in Pellston, Alpena, Escanaba, Iron Mountain and Sault Ste. Marie.
The biggest change is creating “tagged” routes in Alpena, Pellston, Iron Mountain, and Escanaba. These routes have been described like bus routes connecting two cities. Planes stop at an airport hub while en route rather than taking a direct path.
For example, flights from Iron Mountain to Detroit include a stop in Escanaba. One of the daily flights from Pellston to Detroit includes a stop in Alpena.
While the non-stop portion of the routes have not increased in-flight time, it takes an added 30 to 40 minutes for passengers to board or deplane at the stop, according to SkyWest.
SkyWest maintains schedules are timed to make as many connections in Detroit as possible, but business travel time is a concern Fittante hears often. Adding extra stops have turned one-day trips into three days with late night and early morning flights.
“The way that the schedule falls oftentimes does not allow for convenient passage in and out,” Fittante said. “The time that it takes really is a struggle for businesses who are trying to transact work at the speed of business.”
Aging Population
Taking a car from one city to the next takes time. The U.P.’s population is sparse. Even in the most populated county, Marquette, there are about 36 people per square mile, according to the 2020 Census.
The population also is aging. The median age in counties with major cities like Marquette, Delta, and Alger are all at or above Michigan’s median age of 40. Houghton comes in just below at 32.
Fittante’s InvestUP is looking for new solutions.
The organization was established in 2019 to attract and grow business with the support of the Michigan Economic Development Corporation.
It set a goal to increase the overall regional population by 15,000 people or 5% by 2030. This would get them back on the growth track the U.P. saw from 1970 to 1980, Fittante said.
Focus is on the 21-39 age range, aiming to increase the younger population by 5,000 people or 7%. The hope is a younger demographic would bring vibrancy to the workforce, fresh perspectives and family growth.
InvestUP estimates across the U.P. there are 21,000 higher education students, each representing a young adult who has already embraced the peninsula’s lifestyle.
At the beginning of the year, the organization launched a pilot internship program to connect U.P. businesses and students. To kick it off, Michigan Tech hosted a 906 Industry Day exclusively with U.P. employers.
Housing
But where would these new residents live?
An InvestUP analysis of new housing units authorized from 1990 to 2020 shows the U.P.’s housing stock is in a deep, decades-long hole.
At its peak in 2000, the region was authorizing 1,560 new housing units a year. That plummeted during the 2008 housing bubble and has yet to regain momentum. In 2020, only 530 new housing units were authorized, according to InvestUP’s analysis.
In the lower peninsula, housing costs and days on the market are leveling but in Marquette, Realtor Stephanie Jones is still seeing fierce competition for the area’s short supply.
Across Marquette County, population of 66,000, only 68 residential listings were available at the end of March.
In a city-wide survey, 61% of residents said affordable housing was a challenge and 45% said housing supply was a major issue, according to the Marquette Master Plan community engagement report presented to city commissioners on March 23.
“It’s very hard to recover from a couple of decades of not enough building,” Jones said. “It’s just not going to happen overnight.”
Jones describes the drop in inventory after 2008 as devastating. She routinely has clients who turn down jobs in the area because they can’t find a home to relocate.
Building costs remain high, which puts a tighter squeeze on affordable housing. The housing tension unearths economic frustration met with NIMBYism.
“When you have communities, not just Marquette, but communities across the state who say I don’t want more developments in my backyard, then we will never have enough inventory,” Jones said.
Longyear, headquartered in Marquette, has taken on that challenge. The asset management and investment strategy company is expanding its portfolio into residential real estate this year.
The 150-year old company owns 3,000 acres in Marquette Township. During the pandemic CEO Steve Hicks saw the opportunity to use the company’s legacy in forestry as launchpad for sustainable housing.
What farm to table did for the restaurant industry, Longyear wants to see in real estate.
Forest to home – keeping carbon emissions low and local investment high.
Longyear has dedicated 163 acres to the new development. The company will keep half of it forever greenspace. The other half will have single-story family homes and townhomes. Seven home designs are available as Longyear tries to capture a large swath of the market: snowbirds, retirees, young couples and families.
Since announcing the project in October, 300 people signed up for updates and indicated they would be interested in purchasing a home in the future Forestville neighborhood.
Phase one will start with 20 to 30 homes. In total, Longyear plans to build around 230 homes. The goal is to break ground this year, said Alysa Arwood, senior director of real estate development.
The Longyear land will feature trails and public outdoor recreation, Arwood said. Ideally, Forestville would balance urban convenience in a rural setting, she said.
“How do you insulate, protect and build up rural communities so they can be self-sustaining? We talked about that quite a bit,” Arwood said.
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