Gov.
Gretchen
Whitmer
is
using
her
final
year
in
office
to
champion
a
sweeping
housing
package
centered
on
a
new
affordable-housing
tax
credit.

The
proposal
aims
to
boost
construction
for
working-
and
middle-class
Michiganders
who
are
increasingly
priced
out
of
many
communities.
To
do
so,
she
wants
to
remove
regulatory
barriers
and
is
piggybacking
on
bipartisan
housing
reform
legislation
dubbed
“Housing
Readiness,”
introduced
earlier
this
week.

“There’s
still
a
lot
of
red
tape
that
gets
in
the
way
of
shovels
hitting
dirt,”
Whitmer
said
in
her
State
of
the
State
address.
“Let’s
make
it
easier
to
build
in-law
suites
and
multifamily
homes.”

With
her
initiative
and
the
proposed
legislation,
Michigan
joins
the
national
shift
toward
state-led
reforms
to
address
housing
affordability.
Lawmakers
in
California,
Oregon,
Montana,
Arizona,
Texas,
Florida,
and
Colorado
have
taken
similar
steps.

They
have
moved
to
legalize
“missing
middle”
housing
types
in
more
neighborhoods.
They
are
also
relaxing
rules
on
smaller
lots,
accessory
dwelling
units
and
parking
minimums.
Those
changes
aim
to
lower
development
costs
and
open
more
sites.

The
Michigan
Democrat
also
joins
presidential
contenders
Illinois
Gov.
J.B.
Pritzker
and
Pennsylvania
Gov.
Josh
Shapiro,
who
this
year

launched
efforts
to
advance
housing
reform
in
their
states.
Whitmer
is
considered
a
top
contender,
but
she
has
been
ambiguous
about
her
intentions.

Adding
a
LIHTC
program

Whitmer
urged
lawmakers
to
create
a
Michigan
affordable
housing
tax
credit
that
layers
on
top
of
the
federal
Low-Income
Housing
Tax
Credit.

Many
states,
including
Michigan’s
neighbors,
already
supplement
federal
subsidies
with
state
programs.
Affordable
housing
groups
have
proposed
a
roughly
$42
million
credit
to
match
federal
credits.

The
credit,
however,
comes
at
the
cost
of
lowering
future
state
revenue.

Kansas
enacted
a
law
last
year
that
cut
the
state’s
available
credits
by
more
than
50%
through
2028,
when
the
program
is
set
to
expire.
The
incentive,
created
in
2022
to
spur
construction
of
3,800
to
5,000
new
homes
per
year,
came
under
fire
after
projections
showed
it
could
cost
the
state
nearly
$1
billion
in
future
tax
revenue.

Georgia,
which
has
matched
federal
credits
dollar-for-dollar
since
2001,
may
lose
the
tax
credit.
Lawmakers
there
are

considering
eliminating
the
program
in
2031
as
part
of
a
proposal
to
lower
state
personal
and
corporate
income
tax
rates.

Bipartisan
support
for
housing
reform

Under
Whitmer,
the
state
launched
in
2022
with
a
housing
plan
and
a
goal
of
75,000
new
and
rehabilitated
housing
units
by
the
end
of
fiscal
2026.
The
state
used
first-time
homebuyer
payment
assistance
and
investment
from
the
Michigan
State
Housing
Development
Authority
to
boost
housing.

After
reaching
the
goal
early,
Whitmer
increased
the
target
to
115,000
last
year.
The
number
is
now
nearly
87,000,
according
to
the
state.

Still,
lawmakers
believe
more
must
be
done
to
ease
housing
affordability
concerns.
Whitmer
tied
her
proposal
to
a
bipartisan
House
package
that
would
relax
minimum
dwelling-size
requirements
and
allow
multiunit
buildings
in
more
locations.

Republican
state
Rep.
Joe
Aragona,
one
of
the
legislative
sponsors,
said
in
last
week’s
announcement
that
housing
construction
costs
continue
to
rise.

“They’re
becoming
incredibly
unattainable,
and
that’s
why
you
have
this
bipartisan,
bicameral
group
together
to
try
and
solve
this
issue,
or
at
least
solve
part
of
this
issue.”

The
bills
aim
to
reduce
parking
requirements
and
other
local
standards
that
limit
new
housing
or
drive
up
prices.
Business
groups
and
builders
say
these
needed
changes
address
high
material
costs
and
sluggish
permitting,
which
stall
projects.

Facing
the
same
opposition
while
building
a
legacy

Similar
to
zoning,
taxation
and
building
code
legislative
reforms
other
states
have
undertaken,
the
legislation
would
supersede
local
government
authority,
which
has
drawn
the
ire
of
local
governments.

In
Michigan,
local
control
advocates
warn
that
state
mandates
could
override
community
preferences
and
strain
infrastructure
or
services
in
fast-growing
areas.

Whitmer
counters
that
the
status
quo
leaves
too
many
families
without
safe,
affordable
homes
and
threatens
Michigan’s
long-term
competitiveness.
She
argues
that
young
workers
and
families
will
leave
if
they
cannot
find
housing
near
job
centers,
schools
and
amenities.

As
she
nears
the
end
of
her
tenure,
Whitmer
views
the
housing
agenda
as
both
a
policy
and
a
political
legacy
statement.

By
pairing
a
state
tax
credit
with
zoning
and
permitting
reforms,
she
is
borrowing
strategies
from
other
capitals.
She
is
betting
that
treating
housing
as
critical
infrastructure
will
resonate
with
Michigan
residents,
who
are
anxious
about
costs
and
opportunities.