Opinion: Whitmer plan makes housing affordable for more Michigan workers

When you hear the word “home,” what comes to mind? For young couples, it may be a starter home that allows them to create a family and equity. For working adults, it may be an apartment close to amenities like public transportation. For senior citizens, it may be an accessible place that fits their limited income.

Michigan has a reputation for high quality of life and low-cost housing. That may be true for those moving from Chicago, Denver and other pricy markets. But for many Michigan residents, their dreams for a safe and convenient haven are out of reach because of an acute shortage of affordable housing for all income ranges.

Starter homes are beyond the budgets of many young people. Workers are commuting 45 minutes or more to jobs in tourist areas like Traverse City. And senior citizens, especially in rural areas, have limited choices.

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A game-changer for these folks is Gov. Gretchen Whitmer’s proposal to allocate $100 million for the Michigan Housing and Community Development Fund, which she estimates will build 2,000 new rental units. The fund can also be used for rehabs, downtown projects and home ownership programs.

This program has long gone underfunded, even though 47 other states – including all our neighboring states – have dedicated funding for affordable housing programs. Michigan’s economy is paying the price.

At the Community Economic Development Association of Michigan (CEDAM),, we work with the Housing Michigan Coalition on policy and budgetary approaches. We’re especially concerned about how the housing shortage will hamper Michigan’s post-pandemic progress.

“It’s a major talent and retention issue,” said Josh Lunger, Senior Director of Government Affairs at the Grand Rapids Chamber. “I can’t think of a member whose top issue right now isn’t finding employees to hire. Affordable housing for everyone at different wage levels is one of the ways that we know has an impact.”

Many of us are lucky to have homes we love and cost less than 30 percent of our household income – the baseline for affordability. Once housing costs eat up more than 30 percent, a household is considered cost burdened; when costs exceed 50 percent, households are in crisis. Too many fall into that category, particularly renters.

Zillow shows that as of June 2021, an estimated 123,157 Michigan renter households are behind on rent. With the expiration of the federal eviction moratorium on July 31, Zillow estimates 41,025 renter households are at risk of eviction – more than 2-1/2 times the size of Traverse City.

A lack of affordable housing means more people dependent upon social programs or public assistance. It means more homelessness. It means severe labor shortages.

Many believe the current worker shortage is due to high unemployment pay prompted by the pandemic. That oversimplifies a complex issue exacerbated by Michigan’s stock of quality affordable housing, which has been shrinking for 30 years. The pandemic has amplified the problem, escalating the cost of building and rehabbing.

Supporting workers with attainable housing also supports the employers who want to hire them. An Idaho study notes that “housing affordable to a range of employers and customers is a perpetual wage subsidy to all local employers.” Conversely, “workers provide a subsidy to employers and customers by commuting long distances or living in substandard housing to provide services at a price we consider affordable.”

The stressed labor market doesn’t just affect restaurants and retail. It’s hampering recruitment of essential workers in health care, education, construction trades and first responders, not to mention the creatives needed for high-tech jobs.

Statewide, the typical home value has increased by 114 percent in the last ten years. From January 2018 to May 2021, the number of homes listed for sale under $200,000 dropped from 26,170 to 12,318 – a 53 percent reduction.

Communities have tools like land banks and less restrictive building codes to ease the affordable housing crisis. CEDAM and our Housing Michigan Coalition help them figure out which work best for their circumstances. But they need support from the state and federal government to jumpstart solutions. Gov. Whitmer’s proposed $100 million would do that by stabilizing Michigan’s workforce.

We know subsidies for attainable housing work: State numbers show that leveraging $1 of public funding attracts $11 in private investment.

We encourage lawmakers to approve this budget allocation. If they don’t, our workforce development will suffer and Michigan will lose a competitive edge to attract and retain workers and the employers who rely on them.