Michigan launches $5 million affordable housing grant program

Roofers work on new housing construction, Wednesday, May 6, 2020, in Oak Park, M.I.

The state of Michigan is incentivizing local communities to build more affordable housing with the creation of a $5 million grant program, the Michigan State Housing Development Authority recently announced.

Starting Jan. 16, local governments can apply to receive funding through the new Housing Readiness Incentive Grant Program. They can use the money, which the state Legislature appropriated in the 2024 fiscal year budget, to adopt or eliminate regulations in order to help boost the state’s housing stock. Land use policies, master plan updates, and zoning amendments are a few of the regulations identified by the MSHDA that the program seeks to address.

“We are moving quickly to solve problems that our local and regional partners have identified, and this new program will put state funding directly into addressing local barriers to new and affordable housing solutions,” MSHDA Executive Director Amy Hovey said in a statement. “In our regional listening sessions around the Statewide Housing Plan, we heard repeatedly about the importance of streamlining local rules to help build more housing, add density, rehabilitate existing stock, and across the board address affordability.”

The issue of housing affordability has continued to plague communities around the country, driven by factors that include wage stagnation and a decline in housing inventory. 

About 26% of Michigan residents spend more than 30% of their income on housing, according to data from Michigan’s Statewide Housing Plan, released last year. The report also revealed that the average sales price for a home in Michigan increased by 84% between January 2013 and October 2021.

The Statewide Housing Plan further outlined measures that would provide Michiganders with access to better housing options, such as equitable data collection and an increase in resident input.

Cities, villages and townships that apply to the new grant program can receive up to $50,000 to cover costs associated with their plans to increase housing supply and affordability.

About $2 million of the program’s funding will be available for municipalities that have been designated by the Michigan Economic Development Corporation as having participated in its Redevelopment Ready Communities program, an initiative used to develop best practices in planning, zoning and economic growth. The other $3 million will be set aside for local governments without the designation.

“The Housing Readiness Incentive Program will align state investment directly with the local governments that need help most,” Hovey said. “These problems didn’t crop up overnight, but we’re going to act decisively as we continue to identify new, innovative solutions to confront the housing crisis.”

The online applications portal will open Jan. 16, 2024, and will remain open until all funding has been allocated. The MSHDA will review applications and issue awards as they are received.