Michigan State Housing Development Authority (MSHDA) Chief Executive Officer Amy Hovey at the Mackinac Policy Conference May 28, 2024 | Susan J. Demas
Michigan has seen some of the highest rent increases of any state in recent years — with many households seeing 25% rent increases in a single year, Michigan State Housing Development Authority (MSHDA) Chief Executive Officer Amy Hovey told the Advance during a sit-down interview last week at the Mackinac Policy Conference.
But even as the housing crisis has wreaked havoc on Michiganders, she said there are signs the market could stabilize within two years.
“I think 24 months from now we’re going to be in a different situation,” Hovey said. “It’s all about influxing supply that’s at a rate that Michiganders can afford.”
More than 40% of Michigan families earn an income above the federal poverty line — which is $31,200 annually for a family of four — but can’t afford the cost of living on essentials such as housing, childcare and food, according to a 2024 report from the Michigan Association of United Ways.
There’s a misunderstanding and an underselling of exactly how bad the housing crisis is and who qualifies for affordable housing programs in the state, Hovey said. NIMBYism or the “Not In My Backyard” ethos is alive in Michigan and MSHDA is working to clear the stigmas surrounding affordable housing projects.
Michigan State Housing Development Authority (MSHDA) Chief Executive Officer Amy Hovey at the Mackinac Policy Conference May 29, 2024 | Anna Liz Nichols
“I think people have a misconception. When you think about the housing that we subsidize, right now, the majority of Michiganders would qualify,” Hovey said. “When we look at NIMBYism, it’s just so interesting to me. Most of your teachers would qualify for our housing. Do you not want your teacher to live in your neighborhood or your police officer, or firemen or the people that work at your bank? Some of our new legislators would qualify, because the housing crisis is inching up to the income level.”
Michigan is currently short 190,000 units of housing, MSHDA estimates this year. That demand for housing that is eclipsing the supply, mixed with the financial turmoil many are due to COVID-19 pandemic setbacks and inflation is putting a lot of Michiganders in a bad spot, Hovey said.
To take a chunk out of the shortage, Gov. Gretchen Whitmer announced last week on Mackinac Island that the state is upping its commitment of building or rehabbing 75,000 units of affordable housing by September 2026 to 115,000 units.
“Making Michigan an affordable place to live, making Michigan a place where you can find housing, if we’re gonna grow our population, we’ve got to be able to deliver on both,” Whitmer told the Advance ahead of her announcement.
The goal Whitmer is laying out is substantial and it will take a lot of new partnerships in the state and at the federal level to accomplish the 115,000 unit goal. But the last year marked the “best year ever” for MSHDA, Hovey said, and the office is ready for the new challenge.
MSHDA reports that in 2023, it financed $644.7 million in mortgages and down payment assistance, helping 4,402 households. In addition, the agency reports it invested and loaned out $490 million for building or renovating 3,462 homes.
Gov. Gretchen Whitmer at the Mackinac Policy Conference May 29, 2024 | Anna Liz Nichols
And this year is going to be even better, Hovey told the Advance shortly before speaking on a panel at the Mackinac Policy Conference talking about the state’s housing crisis and how to combat it.
“The faith that the governor has put in our agency to work with partners across the state to develop even more housing and increase that goal excites me … the fact that she sees promise in our agency, and the fact that she’s increasing the goal,” Hovey said. “It really gives me that kind of re-energization that you need to go, ‘OK, we’re doing it’ because it gets tiring, you’re in the trenches, you’re trying to make significant change and bring everybody else along with and to see that people are recognizing that we’re making it happen is exciting.”
Partnerships in making Michigan an affordable place to live are coming from all over the state, but folks on the federal level need to address being able to afford housing as one of the biggest issues Americans face, Hovey said. She said that neither President Joe Biden nor former President Donald Trump, the presumptive major party nominees, has spoken enough about housing this election cycle.
“They’ve said nothing. … It’s a sad thing that I don’t think it’s actually hitting any of the federal conversations in a way that shows concern for how foundational it is to quality of life for families in our country,” Hovey said. “I am looking forward to getting people to focus on housing.”
In the meantime, Hovey notes that local governments are working to solve housing problems themselves, applauding the small tourism town of Frankfort on the shore of Lake Michigan, which is using $240,000 from MSHDA to establish workforce housing the city zoned off for the project.
“They’re creating workforce housing districts. They are waiving all their fees. So local governments have significant fees for site plan review, for tapping into the utilities. They’re waiving all of those, they’re donating land. They’re really trying to do everything right to attract developers to have housing develop in Frankfort,” Hovey said. “In that area, the majority of their housing stock are second homes, so they really need to create housing stock that can remain affordable long term for workers, that won’t just be kind of flipped for the next Airbnb or second home in Michigan. So they’re a small town, but they’re doing everything right.”
Traverse City is one area that has been facing a housing crisis well before the rest of the state made it to the current situation, Hovey said. There’s an utter lack of affordable housing, as short-term rentals for the tourism hub have taken over.
Traverse City mural downtown | Susan J. Demas
Hovey said she’d like to see fees associated with short-term rentals that could be used to curb the takeover that has happened to the housing market in places like Traverse City and Muskegon, with fees potentially being used towards funding affordable housing solutions.
Businesses and local governments have come up with ways to work around the rising cost of housing, but not every solution is sustainable, Hovey said.
In northern Michigan, Shorts Brewing bought an inn in 2022 where employees pay below-market rates to live in a room. But Hovey said that it’s not an ideal long-term solution.
“No one should have to live in a hotel room for 12 months. … That is great for transitions, but it is not great for permanent housing and we when you see the desperation and the fact that people are willing to live in a room, it’s different if you’re there for three months and you’re a summer job,” Hovey said. “… Unfortunately, because of where we are today, they’ve had people living there year-round so we need to do something about that.”
One of the best tools MSHDA has are the 15 Regional Housing Partnerships across Michigan, Hovey said. The partnerships bridge local stakeholders such as businesses and philanthropic organizations to the state’s housing plans and work to incorporate regional needs into the state’s vision for affordable housing goals.
“I’m most proud of the fact that we’ve created these regional housing partnerships across the state that have allowed us to hear what the needs, priorities and values are in each of these unique regions and be able to respond to them,” Hovey said. ““If we want economic growth, if we want educational attainment, if we want folks to be happy, if we want crime to go down, it’s all dependent on people having stable quality housing.”
Michigan State Housing Development Authority (MSHDA) Chief Executive Officer Amy Hovey at the Mackinac Policy Conference May 28, 2024 | Susan J. Demas
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