Opinion | Why Michigan's complex housing issues don’t have easy solution

This year, the Michigan State Housing Development Authority (MSHDA) commissioned two studies to evaluate and better understand housing and home ownership across the state. As the first studies of their kind to be conducted in over a decade, The Michigan Homeownership Study and The Michigan Statewide Housing Needs Assessment delivered incredible insights while scientifically demonstrating what we already knew to be anecdotally true. 

Namely, Michigan is not meeting affordable housing demands for residents across the state.  

Consider these statistics: Any household spending more than 30 percent of its income on housing-related costs is considered cost-burdened. The median household income in Michigan is $50,803, which provides enough money to afford a $175,000 house, but the average price for a newly built single-family home is more than $330,000. According to Zillow, the median listing price for a pre-owned home through July 31, 2019 is $194,900 – well above what the average household can afford without being cost-burdened. 

Unfortunately, the solution isn’t as simple as just creating more affordable housing – which would be akin to putting a bandage on a broken leg. In fact, solving housing challenges throughout the state doesn’t always come down to enabling affordable homeownership. Rental reimbursement programs are a better fit in many parts of the state, while economic development tools can help local businesses make certain residential areas more attractive.

Why? Because every region of the state faces unique challenges. While some overarching themes exist throughout the state, distinct challenges at the local level require thoughtful and diverse solutions. The nuances of the housing market in a growing city such as Grand Rapids, for example, are vastly different from those in an aging suburb such as Westland. 

According to MSHDA’s research, here are some of the wide-ranging challenges impacting communities at a local level: 

• In some areas, available units are older, and they do not have the layouts or amenities today’s homebuyers are looking for. Many vacant units have not been maintained and will require costly renovations. 
• Many communities with available housing have a declining population, as well as fewer business and economic opportunities to attract new residents. 
• Regions with a combination of high housing demand and supply shortages have skyrocketing prices, making housing less affordable for existing and prospective residents. 
• Barriers in local zoning and other regulations can prolong the housing development process, creating fewer available units and higher price points. 
• Strict lending practices, growing student-debt loads, and home costs outpacing wages are making it more difficult to purchase a home.

This means there is no single “Michigan affordable housing crisis.” Instead, there are varied housing challenges that need to be addressed in each region, city, suburb and rural community. At the macro level, solving these diverse challenges may seem like a monumental task. However, individual communities have several proven tools and programs at their disposal to enact positive change:

• Finance Tools: Access to capital is essential in ensuring people can buy homes. MSHDA provides down-payment assistance for first-time home buyers, but different markets require different finance tools. 
• Rehabilitation & Preservation Tools: In many cases, the cost to rehabilitate a home is higher than the actual purchase price. This is a common barrier for buyers. Rehabilitation funding and neighborhood preservation tools can help bring these “fixer-upper” units back on the market. 
• Land Use & Zoning Tools: Communities can have a stronger voice in the types of homes built locally. Adjusting local land use, zoning, and permitting regulations can help with predictability of approvals, speed up delivery of units, and mitigate developer risk. 
• Economic Development Tools: People want to live close to job opportunities. A combination of local opportunities and affordable housing helps attract and retain employees. Economic development tools enable the public and private sectors to act together, helping businesses thrive and employees find housing they can afford. 

While there may not be a single solution to the affordable housing crisis, it’s a problem we can all work together to solve. From community leaders to developers to organizations like MSHDA, we all need to play a role in identifying the precise blend of solutions that will address the unique challenges impacting affordable housing in communities across the state.