Today, Gov. Gretchen Whitmer announced her proposal to allocate $100 million for the Michigan Housing and Community Development Fund (MHCDF). These funds would be used for rental housing, rehabs, home ownership projects, and downtown development initiatives to alleviate affordable housing needs in Michigan. On a broader scale, this funding would have ripples of impact across our state for decades to come, revitalizing downtown areas, supporting low- to extremely low-income households in Michigan, and taking stress off of the labor market.
Securing this funding has been one of CEDAM’s top policy priorities for years. Gov. Whitmer’s proposal would change the game when it comes to filling rapidly growing gaps for attainable housing in Michigan, going on to support our state’s workforce and help our economy recover post-pandemic.
How MHCDF funds would be used
MHCDF funds could be used for a number of initiatives to expand access to affordable housing in Michigan, such as subsidies for affordable housing developments, targeted efforts to create and preserve dedicated affordable housing, and coordinated public and private resources aimed at affordable housing for low-income, very low-income and extremely low-income households.
These funds could also be used for downtown revitalization projects, or even home ownership projects for eligible households. Together, these projects would simultaneously help increase housing affordability and revive Michigan’s neighborhoods and downtown areas.
Why we need funding for MHCDF
First established in 2008, MHCDF has received limited funding to date. In the 2008 round of funding, projects awarded leveraged $1 of MHCDF to $11 of public/private sources ($2,163,400 appropriated; $24,041,009 investment leveraged).
The lack of funding has caused Michigan to trail behind by comparison nationally. A total of 47 states have similar funds and have established trust funds, and 30 states have ongoing, dedicated funding sources. This includes every state in the Midwest region except Michigan. With this in mind, it becomes clear why Gov. Whitmer’s proposal is so critical.
The current reality in our state is that home ownership and economic security is out of reach for a rapidly growing number of people. Half of rental households in Michigan are cost-burdened, paying more than 30% of their income towards housing. Additionally, there is a lack of affordable housing for households at 50% or below of AMI in urban and rural areas of the state (Michigan Department of Agriculture and Rural Development, 2021). This creates a clear issue when it comes to workforce development. If workers can’t afford to live in a certain location, they won’t – creating significant gaps for employers, especially in areas that rely on the seasonal workforce. But even more importantly, this leads to countless social inequities and increased rates of unhoused people rising across our state.
Why MHCDF works
Affordable housing is directly linked with creating stable communities. When we provide housing types and prices that reflect the needs and incomes of their residents, we build strong communities and economies. MHCDF is also highly targeted to serve those with greatest need, who play a critical role in the workforce as we recover post-pandemic. These individuals may often require apartments close to public transportation or other amenities in order to travel to work, and MHCDF would make housing in these areas more attainable.
The fund also supports local decision making and control, empowering communities to choose what modes of support best serve their residents’ unique needs. Addressing local needs with local partners is the solution.
At CEDAM, we believe that affordable housing directly improves opportunity, health, and quality of life. By increasing rental housing and homeownership opportunities, MHCDF will help create strong, equitable communities where families can prosper and businesses can grow. With this strong foundation, we will be able to attract and keep our workers and jobs right where they belong: in Michigan.