Michigan has shrunk its housing shortage by about 26% in the past three years, significantly more than expected under the 2022 Statewide Housing Plan.
The plan emphasizes housing for residents earning incomes at 80% or lower of the area median income.
Amy Hovey, CEO and executive director of the Michigan State Housing Development Authority, or MSHDA, said the state Legislature and the governor recognized the problem, and budgeted $150 million, primarily to help move stalled lower-income housing projects that were in the pipeline.
That's after construction costs skyrocketed during the pandemic.
"In the past MSHDA has got most of its funding directly from the federal government, so having the state infuse additional funding has really been super helpful to address the housing crisis here in Michigan," Hovey said.
She said the state is also bringing housing funds from other agencies, and leveraging those along with municipal funds for more efficient use of the total dollars that are available.
The state is also adding new programs to fill gaps, such as a program called the "Missing Middle." It recognizes that even people making up to 120% of the median area income were having trouble finding affordable places to live.
Another program focuses on the need to rehabilitate existing homes. "We also need to make sure that we're stabilizing the housing that we have," Hovey said. "The majority of the housing in our state is old — over 50% is over 50 years old."
Hovey said because of the progress, the state has increased its goal for the housing plan by 53%. The original goal was to add 75,000 new units of housing by 2026. The new goal is 115,000. The five year plan is slated to end in 2026.
A harder problem to solve, said Hovey, is the housing shortage facing middle class residents seeking single family homes.
"It's a huge concern at MSHDA that home ownership is out of reach for more and more Michigan families," said Hovey. "The average sale price for a single family home is now $450,000 — and the average family can only afford a home that costs $173,000."
Hovey said MSHDA is exploring ideas that could incentivize developers to build more affordable single-family homes.
She said there is also a new program being talked about called the Michigan Home Ownership Reinvestment Act, which, among other assistance, could increase down payment funds for home buyers.
Correction: This story was corrected to reflect that the State Housing Plan addresses all aspects of Michigan's housing shortage, not just that affecting lower-income residents.
