LANSING, Mich. (AP) — A group representing local governments across Michigan is calling on state lawmakers to set aside $800 million over the next five years to help spur affordable housing projects, predicting the cash infusion could result in 10,000 new or rehabilitated homes.
The proposal from the Michigan Municipal League would provide funding to developers for projects in communities that relax certain zoning regulations – such as allowing duplexes in residential areas – an effort to ward off any potential mandates from the state.
The goal is to encourage more affordable housing options “through partnerships and not preemption,” said Sault Ste. Marie Mayor Don Gerrie, who serves as president of the Municipal League.
But it remains to be seen whether Michigan lawmakers will adopt the proposal – or approve an initial wave of funding for the next fiscal year – during what has already been a tumultuous budget cycle.
A bipartisan coalition of state lawmakers is backing the proposal, including Democratic Rep. Amos O’Neil of Saginaw and Republican Rep. Mark Tisdel of Rochester Hills. But none could say Tuesday whether they’ll be able to get funding into the next state budget.
“I’m not sure of any guarantees in this town … but if this is a priority for the state, we need to act like that,” Municipal League CEO and Executive Director Dan Gilmartin said in a news conference at Lansing’s City Hall.
Rosie Jones, spokesperson for Senate Majority Leader Winnie Brinks, D-Grand Rapids, told Bridge in a statement that Democrats are “committed to increasing accessible, affordable housing,” and that Brinks personally “looks forward to learning more about this proposal.”
Similarly, Michigan State Housing Development Authority CEO and Executive Director Amy Hovey said in a statement her agency was “encouraged to see widespread recognition that we have a housing shortage” and was reviewing “the specifics of this proposal.”
The authority oversees the state’s existing affordable housing programs.
A spokesperson for House Speaker Matt Hall, R-Richland Township, meanwhile acknowledged that several Republicans were interested in housing issues though said the speaker wasn’t immediately familiar with the Municipal League’s proposal.
State officials say Michigan needs more housing and was short an estimated 119,000 units as of spring. Closing that gap is a key priority for Democratic Gov. Gretchen Whitmer, who in January celebrated the launch of a new Employer-Assisted Housing Fund that helps companies build affordable worker housing in high need areas.
Other efforts include new tax financing options for developers and community-led efforts to rehabilitate old buildings for lower income housing.
But there’s still more work to do, according to Municipal League officials, who said Tuesday they’re seeking $160 million annually in the state budget across the next five years for what they’re calling the MI Home Program.
Money would mostly go toward developers as gap funding grants to address local housing needs, though some would go to communities working to update local zoning ordinances.
These programs would include:
1. MI Home Fund: A two-year, $50 million revolving loan fund that could be layered with grant funding to address gaps for further development needs.
2. MI Home Grant: A home development program – funded at $95 million in the first two years, then $145 million in years three through five of the project – meant to fill the gap when building or rehabilitating housing
3. MI Home Employer: An annual $10 million to continue the state’s Employer-Assisted Housing Fund, to match employer investments that help workers secure housing
4. MI Home Readiness: An annual $5 million for housing readiness incentive grants, to help communities modernize zoning ordinances in a way that helps encourage additional housing developments.
To make the Home Fund or Home Grant programs available to developers, local governments would first need to be approved by the state and adopt at least half of the Municipal League’s housing policy recommendations.
That list includes allowing duplexes in residential areas, reducing residential parking requirements to 1.5 spaces or less per dwelling and reducing allowable dwelling unit sizes, among other things.
It’s a carrot-over-stick proposal from the municipal government group, which last year opposed Democrat-sponsored legislation that would have forced local governments to make some of those changes.
Groups like the Mackinac Center for Public Policy, which holds sway with conservative lawmakers, have also called for statewide zoning reforms to bring down housing costs.
“While we have been making progress, we have seen efforts to preempt our local zoning and censor the voice of our citizens on these issues,” said Gerrie, the Sault Ste. Marie mayor and Municipal League president.
“We don’t believe this approach is appropriate, nor will it lead to the building of more attainable housing units.”
Creating the housing programs would require legislative changes beyond the state budget, Municipal League officials confirmed Tuesday.
Any residential property created through the program would be subject to certain affordability restrictions for 10 years.
If sold during that period, the property would have to be priced resulting in a mortgage that is affordable for a household earning 120% of the area’s median income. If rented, monthly rent or fees could not exceed 30% of the monthly income for a household at 120% area median income.
The MI Home Readiness program would offer a maximum of $50,000 in grant funding per project, and the MI Home Grant program would offer a maximum of $100,000 for construction and $30,000 for rehabilitation.
Annual state budget negotiations have stalled in Lansing, but early bipartisan backing for the housing proposal is “incredibly exciting,” said Gilmartin, the Michigan Municipal League’s CEO and executive director.
“If this is the priority we claim it to be, then we have to invest in it,” he added. “This proposal provides a way to solve the problem together.”
While the House is in session this week, the Senate is not and will return to the Capitol on Tuesday.
Michigan lawmakers and Whitmer have roughly six weeks left to finalize a state budget before hitting an Oct. 1 deadline that would trigger a state government shutdown.