GRAND RAPIDS — Housing advocates are hopeful for a multi-million dollar infusion from Michigan’s share of federal stimulus money that would go toward a range of housing developments.
Gov. Gretchen Whitmer at an Aug. 24 press conference in Grand Rapids shared more details about her recently announced $2.1 billion investment plan, which would be funded with stimulus money the state is receiving from the American Rescue Plan. If approved by the state Legislature, the funding would put money toward skills training, supporting small businesses, as well as building housing and rehabilitating current housing units.
“This really is a once in a lifetime opportunity that we have in our communities right now with all of this funding coming down,” said Michelle Davis, executive director at Kalamazoo-based Housing Resources Inc. “This can be life changing for a lot of people.”
Whitmer’s $550 million housing investment portion of the plan proposes putting $100 million towards building 2,000 housing units. Another $50 million is planned for energy efficient housing, $100 million would go toward rehabilitating vacant buildings, and $200 million to redevelop brownfield sites. Whitmer also proposed $100 million to build development-ready sites conducive to business investment.
“We need to build a strong economic foundation by making historic investments in housing and broadband and critical development-focused infrastructure,” Whitmer said during the Aug. 24 press conference. “We’re prepared to usher in a new era of prosperity here in Michigan. We’ve got to work together. This can’t be a recovery for some; it’s got to create opportunities for all.”
Affordable housing challenges
Davis said some form of rental assistance, along with creating more housing stock, is important as wages fail to keep pace with rising housing costs. She sees the funding as an opportunity to leverage philanthropic, private sector and public partnerships to make the most of the potential funding.
“It would surprise me if some of this funding didn’t go toward the (Low Income Housing Tax Credit program) model,” Davis said. “We can’t count on those projects getting funded because it is so competitive.”
The LIHTC process, which is administered by the Michigan State Housing Development Authority, has faced challenges mostly because of a lack of funding for the program paired with an extremely high need for affordable housing projects across the state. LIHTC is a lucrative tool developers leverage to build affordable housing developments, yet only about 12 to 16 projects get funded out of about 40 to 60 applicants in each twice-yearly funding cycle.
Housing Next Executive Director Ryan Kilpatrick has similar hopes that a portion of funding goes toward the LIHTC program or is in some way used for gap financing to make housing projects feasible for developers. It is also important that each community is able to use the funding in a way that makes sense locally, Kilpatrick said.
“This will be the challenge for the state: All of our regional housing markets have different problems that have to be solved,” Kilpatrick said. “In West Michigan, I’m most concerned with the amount of affordable housing being lost to higher income households in the last couple of years.”
Ideally, advocates say funding would be used in a multi-pronged approach to preserve current units at affordable rates for tenants, rehabilitate some existing affordable units, and allow the market to build new, more expensive options.
“We can learn from other metropolitan markets that we need to be careful to preserve affordable housing units and build more income-restricted housing, while at the same time adding supply for upper income households,” Kilpatrick said.
Distributing potential funds
It remains unclear how exactly the funds might be spent across the state even if the funding plan as proposed passes the Republican-led state Legislature. As more details become available about the funding plan, Housing North Executive Director Yarrow Brown said she will have a better idea of how to advocate for the funds to be distributed.
“There are a lot of programs right now that are going toward eviction support and homeowner education, which are areas that have a huge need,” Brown said. “Focusing this money on infrastructure and getting projects done is really important and where we currently don’t have money.”
Housing North’s jurisdiction is in the uppermost region of Michigan’s Lower Peninsula. The area has a range of housing needs to serve a seasonal tourism workforce as well as a year-round workforce in the area, Brown said.
“With what people are making, especially in Northern Michigan, our year-round workforce is not making enough,” Brown said. “We’re having conversations about that and have many restaurants that are closing because workers cannot find a place to live here.”
Kilpatrick also sees an opportunity for the housing market to benefit from Whitmer’s proposed funds for employment training, as there is a great need in the construction industry for more skilled homebuilders.
Whitmer’s funding plan also calls for a $215 million expansion of the Michigan Reconnect and Futures for Frontliners programs, as well as a $100 million influx for the Going Pro professional trades careers credential program, along with other workforce development programs.
“Part of our housing shortage is due to a shortage in the labor supply,” Kilpatrick said. “Getting more folks ready to take on skilled trades and build more housing would be a huge help for markets across the state.”
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