Funding Housing: A Look at the Housing Trust Fund

Background: State Housing Trust Fund Capabilities and FundingSupport Michigan's Housing & Community Development Fund sticker

A state housing trust fund can provide stable funding for housing development and other community economic development needs of Michigan communities. Funds from the trust are required to support multiple areas of community economic development, including new construction, rehabilitation, rental assistance, home purchase assistance, project-based subsidies, energy efficient upgrades, and others. The thirty-seven states that have chosen to implement a state housing trust fund build their funds from multiple sources including property transfer taxes, document recording fees, unclaimed property revenue, interest from escrow accounts, and other revenue streams.

A Review of the Michigan Housing and Community Development Fund: FY 2008

“Michigan’s Housing and Community Development Fund (MHFCD)’s mission is to develop our state’s struggling economy by creating vibrant cities, towns and villages where people will want to live, work, retire and play. Creating strong communities where families can prosper and businesses can grow will attract and keep both our workers and our jobs right where they belong—in Michigan.”

The fund was created to support the development and coordination of public and private resources to meet the affordable housing needs of low-income households and revitalize downtown areas and neighborhoods in Michigan. It was funded for one year as a general appropriation but was subsequently cut the following year.

The MHCDF, housed within the Michigan State Housing Development Authority (MSHDA) was endorsed in FY 2008 by more than 25 statewide trade organizations representing more than 5,000 members. MSHDA worked with these community members to fund their visions for their communities. Some of the key areas targeted by MSHDA programs included:

  • Financing downtown and neighborhood improvements to make them attractive places to live and do business.
  • Financing affordable and market-rate housing for young people, knowledge workers, immigrants, early retirees and people with low and moderate incomes.
  • Financing supportive housing for the homeless and people with disabilities.

While this initiative supported individuals, it also had a positive impact on a larger economic scale. In its year of funding, projects awarded leveraged $1 of MHFCD to $11 of public/private sources ($2,163,400 appropriated; $24,041,009 investment leveraged). Thousands of jobs were created, generating millions of dollars in state and local taxes.

Renovation, Rehabilitation, and Repurposing: Current Projects Funded by the MHCDF

Last year, $3.7 million from the Homeowner Protection Fund was allocated to the Michigan Housing and Community Development Fund. The following projects awarded funding are examples of the various projects that have been and can be supported by the MHCDF:

  • A 120 unit high-rise apartment building and 26 townhouse units in the midtown neighborhood of Detroit. The project will provide permanent supportive housing for persons with physical, mental and/or emotional impairments
  • A 70 unit building in Highland Park to provide permanent supportive housing for 70 homeless men
  • Historic renovation of the Herkimer Building in Grand Rapids, providing 55 one-unit bedroom units, including 40 supportive housing units
  • A re-purposed high school building built in 1926 to create 38 affordable, energy-efficient, senior apartments with walkable access to downtown Fremont, MI
  • A mixed-use building in downtown Grand Rapids which includes residential units and commercial space
  • A mixed-use development in downtown Mason which includes residential apartments and commercial space
  • A development which includes mixed-income apartments and townhouses as well as commercial space in Grand Rapids
  • Renovations of a historic building that include 27 units of mixed-income housing in downtown Detroit
  • Rehabilitation of a historic theater building in downtown Flint, including the theater as well as office and retail space

Unfortunately, only 9 projects out of the 65 submitted were able to receive funding due to the limited resources of the MHCDF. It is clear that a larger and more stable funding source is needed in the state of Michigan in order to continue funding projects that serve to strengthen our neighborhoods and communities in a number of ways.

One of CEDAM’s top priority policy goals is to find and secure dedicated funding for the Michigan Housing and Community Development Fund. Over the next few years, much of our energy will be devoted to developing and maintaining a stable funding source in order to allow the MHCDF to meet the housing and community economic development needs of Michigan neighborhoods and communities.