Housing shortages across Michigan alarming local leaders, according to U-M survey

September 14, 2023
Written By:
Daniel Rivkin, Ford School of Public Policy
Concept illustration of many buyers for a single home. Image credit: iStock

Michigan local officials are reporting alarm at the lack of housing options across the state—concerns that include single-family homes and multifamily units and cut across affordable, entry-level and mid-level housing availability.

The results of the 2023 Michigan Public Policy Survey exhibited nearly 50% more concerned respondents compared to similar questions asked in the 2017 wave.

The report reveals statewide concern: “In 2017, concerns over lack of single-family housing were particularly high among officials from ‘mostly urban’ communities. Now, these concerns have increased and spread among local leaders of all kinds, from those in rural (40%) and mostly rural (44%) communities, to those from mostly urban (37%) and urban (41%) jurisdictions.”

Regionally, officials from cities, villages and townships in the Upper Peninsula are most likely to express concern about insufficient single-family housing (59%) and multifamily housing (61%) in their jurisdictions.

“We see from the responses this is an issue being confronted in communities of all types, all over Michigan,” said Debra Horner, the survey’s senior program manager. “Some of the shortage can be attributed to shifting demand during and after the COVID-19 pandemic, or to supply chain interruptions in the construction industry. Yet only 24% of local leaders say they have a sufficient construction workforce in their areas, so this is an ongoing issue.”

When considering how to deal with the shortage, relatively few local leaders believe their policies or zoning ordinances hindered local construction. The state government has launched numerous programs to expand incentives to build more affordable housing, with short-term goals outlined in Michigan’s first Statewide Housing Plan that include building or rehabilitating 75,000 housing units within the next five years.

Tom Ivacko is executive director at the Center for Local, State, and Urban Policy at the University of Michigan’s Ford School of Public Policy, which administers the survey. He says the housing shortage affects other statewide policy goals.

“These challenges have the potential to disrupt Michigan’s current economic development strategy and emerging efforts to increase the state’s population,” he said. “The Michigan Economic Development Corp. has engaged in a national campaign to attract new industry and business, highlighting the state as an ideal location for numerous industries. Yet Michigan businesses are already communicating to state officials they are hindered by limited housing options for workers and are calling on state and federal subsidies as a remedy.”

Looking at potential solutions, the survey found many local communities don’t have organizations, local employers or business groups interested in helping develop affordable housing or in subsidizing workforce housing. A majority of local leaders also are unfamiliar with several new housing programs recently launched by the state.

The report says this majority is likely driven by the large number of small, rural local governments that generally provide few types of services, and are not likely active in local housing support efforts. The survey found that among local leaders statewide, 27% or fewer are familiar with any of the five state housing programs, while another 14%-16% are unsure.

For example, a third of local leaders report being completely unfamiliar with the Michigan Homeowner Assistance Fund, which was established in 2021 under the American Rescue Plan Act to provide funds to homeowners to mitigate financial hardships associated with the COVID pandemic, while 42% are completely unfamiliar with the Michigan Statewide Housing Plan introduced last year.

That support is critical, the report concludes: “As national and statewide housing costs increase alongside other inflationary pressures, addressing local housing shortages is crucial to support local economic and community development programs, to grow the local workforce by drawing new owners and renters to the state and by creating new construction jobs, and to increase local government revenue.”

The survey of all 1,856 general purpose local governments in Michigan has been conducted since 2009 by the Center for Local, State, and Urban Policy. Respondents for the spring 2023 wave include village, township, city and county officials from 1,307 jurisdictions across statewide.