The Housing Michigan Coalition unveiled a new legislative agenda at the Michigan Capitol on Thursday, Apr. 15 to address Michigan’s growing housing crisis through a series of bipartisan legislative initiatives. Housing Michigan is a coalition led by the Home Builders Association of Michigan, Housing North, the Michigan Municipal League and the Grand Rapids Chamber of Commerce. The coalition now includes 37 members from across the state who work in local governments, nonprofit organizations, businesses and construction companies.
The coalition was initially formed to create and expand the tools available to local governments regarding housing development to make living in a home more attainable for citizens. The agenda features tax exemptions for employers who support housing projects, property owners who increase their affordable housing options and for developers in communities in need of equitable housing. Jennifer Rigterink, Housing Michigan executive committee member, shared why the coalition has made it their mission to assist municipalities in meeting the housing needs of their residents in a press release — also released Apr. 15.
“Equitable, accessible and attainable housing is a key component of building community wealth,” Rigterink said in the press release.
The Michigan State Housing Development Authority issued a report in 2019 detailing the shortage of available housing and the affordability issues plaguing the housing market. One of the major challenges the report cites is the uneven strength and stability of the housing market in different vicinities throughout the state.
Some areas, such as Ann Arbor, have consistently high-functioning housing markets when considering trends in prices, ongoing costs associated with property upkeep, the quality of the real estate listings and other factors over time. However, other areas, such as Flint and Detroit, are still struggling with housing security issues that originated from the dramatic decrease of housing permits during the 2008 recession.
The dearth of affordable housing in the state has been escalating for years now in both rural and urban areas, Housing Michigan said. The coalition attributed this to low housing supply and high demand, making owning or renting a home unaffordable for many individuals and families. Additionally, there has been a historical increase in the primary cost drivers of construction, namely materials and labor.
“Housing is consistently ranked at the top or near the top of barriers to progress in northern Michigan’s rural communities by leaders from business, non-profit, education, health care and beyond,” Executive Director of Housing North, Yarrow Brown said in Housing Michigan’s Apr. 15 press release.
Brown said Housing Michigan is excited to be spearheading a bipartisan, proactive project aiming to give communities the means to address housing access needs at the local level.
The Coalition stated that their new agenda focuses on increasing local governments’ control and flexibility over the tax relief and incentives they can offer both homeowners and developers. The agenda also calls for housing that is both affordable to moderate-income households and located close to residents’ workplaces. The Grand Rapids Chamber of Commerce wrote a blog post outlining the key points of the new agenda and why it would have a positive impact on communities.
“These tools will provide the most benefit for residents who have difficulty obtaining market-rate housing, but have more income than would allow them to qualify for ‘affordable housing’ assistance,” the Grand Rapids Chamber of Commerce said.
In Ann Arbor, finding affordable housing has become increasingly difficult, with student housing at 98% occupancy and landlords raising rent costs amidst the high demand. Jennifer Hall, executive director of the Ann Arbor Housing Commission, previously told The Michigan Daily that the University of Michigan needs to be more proactive when it comes to providing housing at a reduced cost to low-income students.
Some of the key items included in Housing Michigan’s legislative agenda would likely incentivize property owners in Ann Arbor — and all throughout the state — to offer more affordable housing with tax exemptions. Additionally, the items laid out in the agenda would help Michigan cities alleviate tax burdens on developers so more residential properties could be constructed for citizens.
Six days before Housing Michigan released their agenda, dozens of Ann Arbor community members demonstrated outside of Larcom City Hall to demand housing justice. Washtenaw Camp Outreach, a mutual aid organization working toward achieving housing justice and supporting the homeless, called for Ann Arbor to put vacant, city-owned land into a community trust. The recent Housing Michigan proposal would support Ann Arbor in the creation of these community land trusts.
Summary of Legislative Agenda: a Four-Part Plan
Housing Michigan’s legislative effort includes four major initiatives organized as five bills — all introduced with bipartisan support — and a few other drafts of possible legislation, all designed to tackle the root causes of the housing crisis.
First, the Employer Supported Housing Credit would provide housing credit to employers. Employers would be able to claim an income tax credit equal to 50% of the total eligible contributions they made during that tax year. Eligible contributions would include any money that goes to supporting a local impact housing trust fund or offers employees the option to participate in an employer-assisted housing project with down-payment assistance, rental subsidies or reduced-interest mortgages on properties near their workplace.
“Rather than relying on the State to determine where housing is needed, what type of housing can be added, which partners to engage and how to deliver the product, the employer will invest in a determined need by contributing down payment assistance, direct support for housing development, or through a housing trust fund to support their employees who earn up to 120% of the area median income,” Housing Michigan wrote in their summary of the bill.
Though Housing Michigan introduced it as one cohesive program in their agenda, the Employer Supported Housing Credit is officially being introduced to the legislature as two bills because it amends two separate Michigan laws.
Next, the Attainable Housing and Rehabilitation Act — modeled after Michigan’s 2019 Commercial Redevelopment and Rehabilitation Act — would enable local governments to create “attainable housing districts” where property owners could apply for a 50% property tax exemption if they meet certain affordability criteria set by their local government. However, to qualify for the tax exemption, property owners would be required to have almost a third of their residential units priced such that they are affordable to someone who earns up to 120% of the county-wide area median income.
“This (bill) will enable local governments to support and encourage investment into the rehabilitation of attainable housing in Michigan communities,” Housing Michigan wrote in their summary of the second bill.
To provide state-wide guidance, the third bill in the package — the Provide for Building Code Development Oversight bill — would reestablish the Code Promulgation Committee that was previously abolished by former Governor Rick Snyder’s administration. The state promulgates a new state construction code every three years. If reinstated, the committee would provide input on the overall state construction code so developers would be more aware of how their construction projects may affect affordable housing options across Michigan, Housing Michigan wrote in the summary of the third bill.
The fourth part of the agenda entails the expansion of the Neighborhood Enterprise Zone Act, an incentivization program that has already successfully created several Neighborhood Enterprise Zones (NEZs). NEZs were established in 1992 as an opportunity for property owners to receive tax benefits from creating residential housing in a distressed or debilitated area. As the final bill in Housing Michigan’s agenda, if passed, it would expand upon the NEZ program allowing more distressed communities across the state to receive tax relief.
“With so many communities across Michigan facing an urgent shortage of housing, this bill would extend the opportunity to use NEZs to all Michigan cities, villages and townships,” Housing Michigan wrote in the summary of the last bill.
All four of the main legislative agenda initiatives have been simultaneously introduced as both a Senate and a House version. The five Senate Bills have now been referred to the Michigan Senate Committee on Economic and Small Business Development and the House Bills have been referred to either the Michigan House Committee on Local Government and Municipal Finance or the Committee on Regulatory Reform. As of Apr. 29, all of the bills were introduced to their respective committees.
Daily Staff Reporter Scarlett Bickerton can be reached at sbick@umich.edu.