Looking Ahead to 2024 With MDSHA Director
December 19, 2023
Michigan State Housing Development Authority Executive Director Amy Hovey may not have landed in the field of housing on purpose, but she has found a sense of purpose and passion for working in housing to build strong communities.
Hovey, a Lansing native, was tapped by Gov. Gretchen Whitmer to be a piece of the puzzle to solve the housing crisis.
And after a year of setting up the infrastructure she believes is needed to tackle the lack of housing in Michigan, Hovey sat down with MIRS to talk about the programs and upcoming work of the housing authority:
What’s the next steps for the end of the year? What do you guys have planned?
Hovey: (In regard to) regional housing partnerships and implementing – ultimately the statewide housing plan — we have the plans in place. The infrastructure has been built. We have new players at the table, meaning it’s not just our typical housing folks, but employers, educators and healthcare providers. Now it’s time to fund those plans. That’s what you’re going see from us in the first quarter of ‘24 — us pushing out funding.
We’re looking for people to tell us what they want us to fund instead of going out with specific programs with specific parameters, within reason. It still has to meet our goals of affordable and workforce housing throughout the state.
We have one little hiccup that we’re hoping gets alleviated at the beginning of the year and that’s the passage of SB 293, which will allow us a little bit more flexibility with the Housing and Community Development Fund. When that fund was created 25 years ago, we were in a much different environment in the housing industry in our state. It had a lot of different parameters that kind of constricted with what we could fund. It had to be in urban areas and very low income.
Now, we know that the problems with housing stretch across the entire state, including rural Michigan. It expands beyond folks making 60% AMI (Area Median Income) and goes up to folks making 120% of AMI. The majority of the federal funding that we have, over $1 billion a year, goes toward housing for families below 60. We need to go a little bit higher to help with the Missing Middle, with a workforce housing dilemma across the state. So, we’re hopeful that will get passed in January, and then we’re going to roll out the funding for the Regional Housing Partnerships as soon as that gets passed.
There seems to be a lot of talk about local zoning ordinances. MSHDA just put out a grant to help change those ordinances, but what else are you planning on doing? I mean, that seems like a big obstacle, especially among the denser population places. What are the plans in the works to get that sliding along?
Hovey: Number one, we have our Housing Readiness, which is going to provide funding for those local governments to expand their capacity to do new land-use policy and zoning reform. We also need to get them to want to do the land use policy and zoning reforms and we have lots of partners throughout the state that are working with us on that.
The Michigan Association of Planners has done a lot of work on rezoning and creating a rezoning toolkit. They’ve been taking that across the state to educate local governments on why you want to rezone. The Michigan Municipal League has been working with their membership and partners throughout the state to do the same thing. We’re not the only ones that see the benefit of that zoning change, and we can’t do everything ourselves. We have to do it in collaboration with others, but education is a huge endeavor that needs to happen in order for the locals to want to take on such a big task. When they are ready, we’re there with the funding to help them hire the consultants.
Could modular housing and mobile homes fill in the low-income housing gap? Is this anything MSHDA has been toying with?
Hovey: We’re all about innovative housing practices. We had a program the last couple of years called MSHDA Mod that was specifically piloting modular developments across the state of Michigan. We have also participated in the 3D-printing house in Detroit. We heavily funded this kind of experiment. We are now looking at funding, and to approve funding, for a modular apartment building. It’s where they kind of stack the different modular units up. So, different markets need different things and we need a lot of housing quickly. It can’t all be stick-built. We’re definitely willing to look at all different types of housing.
A couple of things that are a caveat for us: One, our lending programs can only loan against real estate and a manufactured home that is not on a permanent foundation that is not considered personal property. We cannot fund that with our loan products. That does not mean we can’t consider some of the Housing Community Development Fund or Community Development Block Grant funding. But we are considering some funding right now to help rehab current manufactured buildings, especially in a rural area, which has a larger percentage of manufactured housing. We want people to stay in their homes. We want them to be able to have a nice, sustainable, safe place to live. We don’t take anything off the table when we’re allowed to provide funding for it.
What has been your more popular products for builders? Do you expect to see those trends continue?
Hovey: Our multifamily products tend to have the most competition. That would be the Low-Income Housing Tax Credits, as well as our Missing Middle. We came up with Missing Middle, which was for single-family, as well as multifamily, but we got a lot more applications on the multifamily side of development. We usually get about four times as many applications as we can find in a Low-Income Housing Tax Credit. However, I think in the future, we’re going to see more “For Sale” products, whether they’re multifamily or single-family.
We’re looking at a tool at MSHDA that will help provide some subsidy. You’ve probably heard us talk in the past that For-Sale Housing has gone up about 84% and during that same time period, our incomes in Michigan have only gone up 45%, which makes homeownership out of reach for more and more Michigan families. Well, we want to grow our population and we want people to stay.
In order for people to stay, we need them to plant some roots and we think we can do that with encouraging homeownership and making it possible for first-time homebuyers. Our rate of homeownership is still fairly high in our state, but that is because we have an aging population. They’ve owned their homes for a very long time and were able to purchase when they were affordable. They’re not affordable right now for first-time homebuyers.
There’s some things that we can do on our end. One is this new program that we’re looking at, that is increasing the amount of down payment assistance we can do. At the same time, providing development subsidy to encourage the development of For Sale housing. Single-family homes on average are $375,000 to build in Michigan. Only 1 million of our 4 million families can afford that price point. We have a supply and demand issue. We’ve got to build new. They can’t all be rehabbed, and so we need to be able to subsidize that to bring it down for an average family to be able to purchase.
We’re going to be looking at that in the future. Continuing our multifamily programs that we administer with federal funds. They’re a good avenue to get a lot of housing built quickly. We’ve got a long way to go in responding to the housing crisis.
Speaking of the housing crisis, during the Mackinac Island Policy Conference, you increased the amount of housing that was needed. Has that changed since that time and if so, what’s the number?
Hovey: I don’t have the new numbers yet, but come back to us first quarter of next year. I think then we’ll have new numbers on what the housing demands are in the state. They just don’t come out that often. We’re still on the 190,000 unit number. That’s our latest number. We’re working really hard and really quickly to build as many housing units as we can, and at the same time stabilize the housing units that are out there, which in the past, MSHDA hasn’t had a lot of funding for single-family rehab.
This last year, we came out with the My Hope program that provided $25,000 grant funding to help stabilize our housing stock. That’s been going great. You’re going to see that continue through 2024. You’ll see part of our Michigan Housing Community Development Fund and Community Development Block Grant funds go out in single family. We’ve got to do a little of everything. But you’ll see an update at the Mackinac Policy Conference. I think we planned to have an update there on how we’re addressing the 75,000 goal – what’s that looking like and what the updated need is. So, give us a few minutes and we’ll get there.
What is your goal? What are the goals you’ve set for a number or a range of numbers of housing built in 2024?
Hovey: Yeah, come to that conference. We will give you some updates. We’re planning some splash, and I don’t want to take away the thunder. I need you to listen to me then, too.
Is there anything else maybe that you would like to get out there about MSHDA or about housing that you guys are looking for in the coming year, that maybe I don’t know about?
Hovey: I think we had a great 2023 at MSHDA. We’ve had a lot of new programs start. We’ve seen an increase in the involvement of other industries in housing. We’ve needed all-hands-on-deck to address the crisis.
We’re very thankful for the support of the administration. Gov. Gretchen WHITMER has been great at not only acknowledging the housing crisis, but keeping it at the forefront of issues in our state.
The Legislature has been doing a great job of addressing the issues, but we need everyone to keep on in 2024. We’re not done. We’re just starting.
A huge issue for us that we plan on addressing this year, is capacity to actually develop the housing. So, there’s a point of getting the funding, but also making sure that you have enough capacity throughout the state, not just in our urban areas, to put the deals together and to construct the housing. So, we’re working on trying to do a little bit more capacity building throughout the state.
Could you go into that a little bit more? Capacity in what sense?
Hovey: We don’t have enough developers, people who are putting deals together across the state. We do in some parts of Michigan — Southeast Michigan and West Michigan tend to have the highest number of developers. Our rural areas lack capacity, but they have a high need for housing. We’re working on addressing that issue in partnership with the Michigan Economic Development Corporation and others who also are worried about the development capacity throughout our state.
We need to do a little bit more hand holding. Lots of communities know what they need. We need housing. They don’t know how to do that next step of perhaps putting together an RFP (Request For Proposal) to entice developers to come to their area to develop. How do you do a land assembly to make it easier to develop housing? There’s lots of components that aren’t people’s expertise and maybe don’t need to be their expertise, but maybe we can help lend them some expertise to get these projects going throughout the state.
It seems as if there’s a lack of people to do the work in those rural areas?
Hovey: Yeah, that’s right. That’s why in a lot of our small cities, everyone has a shortage of employees to provide government services. Doing that additional planning step to attract developers to develop housing kind of gets pushed, because you’re just trying to make sure trash gets picked up. We want to be able to build our capacity within this agency to lend that capacity to the areas of the state that need a little extra to get the housing developed.
When you only have two people working for the government to do an RFP, you’re going to put it on somebody who’s like, “When do I have time to do that?”
Hovey: Exactly, and responding to the needs of your community, the first thing people are going to worry about is trash pickup, or road repairs, or schools. They’re not thinking about: “How do you develop additional housing?” We want to help. We’re hoping to do that next year. It’s going to be a heavy lift. We need some approval from the Legislature to get some extra employees. They approve how many FTEs (Full-Time Employees) we can hire, and so we need that. We’ll find the funding to make it happen.
Article courtesy MIRS News for SBAM’s Lansing Watchdog newsletter