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Gov. Wants More Housing; MSHDA Says: Pass 2 Bills

June 4, 2024

(MACKINAC ISLAND) – Gov. Gretchen Whitmer announced a statewide goal of having 115,000 new housing units developed by September 2026. However, her director of housing development says the Legislature must pass two particular bills to make the aspiration achievable.

The two bills consist of one letting the agency spend more on housing that isn’t low-income units, and another expanding access to state loans for single-family mortgages.

“I am going to ask for a plea,” said Amy Hovey, executive director of the Michigan State Housing Development Authority (MSHDA), during the governor’s press conference. “I am begging that politics be taken out of housing, and that we all get together to make sure Michiganders have a place to call home.”

Wednesday, Whitmer hosted a press conference on the Grand Hotel porch, amid the 2024 Mackinac Policy Conference.

Originally, Whitmer’s administration intended to have 75,000 units developed from 2021 to September 2025, doing so through accelerated permitting, construction and rehabilitation of other properties. She announced that she now wants 115,000 units generated by September 2026.

“That’s a 53 percent increase. It’s ambitious, it’s achievable, and it’s absolutely necessary,” Whitmer said. “Our housing supply is not where it needs to be for several reasons: (a) decade-long slowdown in construction following the 2008 recession, and a lack of state investment.”

According to the state’s Housing Data Portal, 1.9 percent of Michigan’s homes are vacant and available, with 85,576 not already occupied. Additionally, the portal shows that from 2017 through 2023, permits obtained for developing housing units dropped from 25,403 to 19,734 – a more than 22 percent drop in comparison to around seven years ago.

Furthermore, Whitmer discussed plans to alleviate energy expenses for certain, cash-strapped households. She noted how the state’s Department of Environment, Great Lakes and Energy (EGLE) is set to access $211 million from the federal government to distribute “Home Electrification and Appliance Rebates,” as well as “Home Efficiency Rebates.”

She also mentioned how, in April, her office announced that Michigan would receive $156 million from the U.S. Environmental Protection Agency, financially supporting solar power investments made by low-income and “disadvantaged community” families. It will deploy rebates to 18,000 low-income households, planning to connect them to rooftop and community-scale solar projects, with some recipients accessing grants worth 100 percent of a project’s expenses.

Unlike Hovey, Director Phil Roos of EGLE confirmed to MIRS that the rebates are a done deal, and to his understanding, he doesn’t anticipate needing the Legislature to address them in boilerplate language this budget-making season.

“We just got to put them into action here, which we expect to be in October or so…(when we’ll get) money out the door on that,” Roos told MIRS.

He said the federal dollars will assist at least 28,000 families from across Michigan, “with a focus on families with the most need.” The home efficiency program will offer up to $8,000 in rebates for energy efficiency modifications, done by a program-approved contractor for both single-family and multifamily buildings.

Rebates dealing with appliances can be worth up to $14,000 to households for families residing beneath 150 percent of their area’s median income, covering the upfront expenses of stoves, heat pumps and other products specializing in energy efficiency.

Meanwhile, from Hovey’s perspective, SB 293 and HB 5032 “really need to pass” to allow MSHDA to meet the goal of generating 150,000 housing units.

SB 293 lifts the mandate that 55 percent of funds within the Michigan Housing and Community Development Program – which is overseen by Hovey’s agency – be dedicated to “low income” and “very low income” households.

The bill passed in the Senate 25-12 in June of last year, and while three House members were not voting in November, SB 293 failed to receive a majority of 56 votes in the House and further votes were postponed.

As for HB 5032, the bill lifts the cap on certain support that MSHDA can offer residents purchasing homes. Under the present-day statute, MSHDA cannot participate in loans for homes with a purchase price of $224,500 for one- and two-family units.

According to a January post by Bankrate, a personal finance website, the median price for homes in Michigan was $238,800. Nationally, the median costs for existing homes (with no new construction taking place) has grown from $303,600 at the beginning of 2021, to $407,600 in April of this year.

HB 5032 delivers a system where MSHDA can offer loans for eligible home purchases when the purchase cost or appraised value is worth up to 90 percent of the “average area purchase price,” which is determined by the Internal Revenue Service.

Hovey explained that while the statute dealing with state-led mortgage support hasn’t changed since 2009, “the cost of our first-sale housing has increased 84 percent since then.”

“We need to increase that limit so that we can provide single-family mortgages to more families in Michigan. Our mortgage comes with a $10,000 down payment assistance that helps those families be able to pay the closing costs and the down payment to get into a home,” Hovey said.

According to a report affiliated with the University of Michigan, which was dropped earlier this month, 51 percent of renters in Michigan were considered to be “housing-cost burdened,” spending more than 30 percent of their income on housing. Among them, 26 percent were recorded as spending more than half of their income on housing.

Also, 24 percent of homeowners with mortgages were deemed cost-burdened. While today’s homeowners reportedly had a median household income of “just over $80,000,” more than the statewide median of $67,000, renters possessed a median household income of $39,000


Article courtesy MIRS News for SBAM’s Lansing Watchdog newsletter

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