Michigan cities, lawmakers seek $800M for housing incentives

Michigan cities and a bipartisan group of state lawmakers are backing a $160 million annual budget proposal aimed at increasing housing construction and rehabilitation through local zoning changes and financial incentives.

Officials say it could spur 10,000 new homes over five years — or about 2,000 a year — at a total cost of $800 million.

The plan — spearheaded by the Michigan Municipal League — is modeled on a program in Ohio and has parallels to a bipartisan housing measure advancing in the U.S. Senate, the Lansing State Journal reported.

It has not yet been adopted as part of this year’s Michigan state budget.

The program would provide up to $100,000 for new housing construction or up to $30,000 for repairs covering as much as 30% of costs.

Dan Gilmartin, executive director and CEO of the Michigan Municipal League, says the proposal is designed to encourage local governments to modernize zoning while avoiding a statewide mandate.

Communities could qualify for funding by adopting half of a list of recommended reforms, including changes to parking requirements and allowing accessory dwelling units.

Lansing, Michigan, Mayor Andy Schor says his city has already taken steps such as reducing parking minimums and switching to form-based codes.

The package includes several programs:

• MI Home Readiness: $5 million a year to incentivize zoning changes.
• MI Home Grant: $95 million in the first two years, rising to $145 million in later years, to close funding gaps in housing projects.
• MI Home Fund: $50 million in the first two years to create a revolving loan fund.
• MI Home Employer: $10 million annually for employer-assisted housing.

Funding would apply to homes rented or sold to residents earning no more than 120% of area median income, with affordability requirements lasting at least 10 years.

Developers say the incentives could accelerate production.

Brian Farkas of Allen Edwin Homes said his company recently committed to increasing output by 30%.

If the proposal passes, he expects building to ramp up further.