Solving Michigan’s Housing Crisis

• A high demand on housing yet a low supply is a large factor in the housing crisis.
• Creative solutions are necessary to solve the housing crisis.
• Predictable funding can help address the housing crisis locally, statewide, and across the nation.

According to Hovey, the housing crisis is caused by one simple thing: supply, particularly, the lack of housing units for Michigan families. 

“Basic economics are, if you are short on supply and high on demand, the cost increases. We really have to help the market. The market is not working how it should,” she said. “If it did, our business permits would be way up, people would be building, and we would have the housing we need. However, it costs too much to develop housing compared to what Michiganders can afford to pay. [And] when you are out of balance like that, it throws us into the housing crisis we have today.” 

Wilson agreed, adding that the median income in Michigan— which the U.S. Census Bureau cited as $35,400 in 2022—does not align with the cost of housing. He cited Genesee County as an example, where a 1,500-square-foot house with no garage or basement can cost an average of $300,000. 

“When you think about those particular numbers, how are people supposed to have that home ownership opportunity? The math don’t math. Unless we get additional resources you need to solve that problem, you’re going to continue seeing low-income families,” Wilson said. “This is not a partisan issue either. This is something that goes across both. If you do not have a wealthy person in your family, if you do not have someone passing down a home, it’s going to be very hard for you to get, one the American Dream, or two to be able to just have a nice home or apartment with your family.” 

Another key point from the panel is the need for creative solutions to address today’s housing crisis. 

Mayor Duggan highlighted the City of Detroit’s initiative to build affordable housing and eliminate homeless encampments as an example of one. The City pays 70% of the cost to build housing, and in exchange, they rent the units for a lower rate than the market price for 30 years. He said that this solution has proven so successful that the City successfully renewed 10,000 of those housing units for another 30 years. 

Song shared that in Ann Arbor, developing a culture that invites people to City Hall has been fruitful in addressing the city’s housing challenge. An instance she cited was the city’s affordable housing mileage and residents to put it to good use. 

“It was a call from the community to recognize the historically Black neighborhood that’s been displaced by Kerrytown,” Song said. “What we wanted to do was make this a conversation—a deliberate conversation—on how we can remedy these inequities that came through in racist zoning [and] prioritizing single-family home ownership.” 

Song also stressed the need to trust urban planners, as the City Council is not an expert in development and fixing the housing crisis.  

But the solutions do not stop locally—Hovey highlighted the Statewide Housing Plan and MSHDA’s 15 regional housing partnerships, which allow them to individualize their contribution to the housing crisis. 

On April 1, 2024, MSHDA also launched a program called MI Neighborhood, which helps fund the implementation of the plans coming from those partnerships. It streamlines the plans into three primary activities: public amenities, rehabilitation, and new units. 

“The program takes small, kitschy types of plans and creates one common application,” Hovey said. “We wanted to create a program that was responsive to the individual values of each region.” 

In conclusion, the panel agreed that no matter how creative the solution the local, state, or federal government comes up with, it all boils down to how reliable it is for the state and its residents. 

“Have a dedicated assortment of funds that, every year, we know ‘X’ amount is going to be available,” Duggan said. “Predictability is what we all would like. Predictability is what we need. It would allow all of us to make better plans.” 

This session was hosted by the Michigan State Housing Development Authority.