Michigan housing crunch sparks rare bipartisan push — and backlash

Michigan lawmakers debate zoning reforms, tax credits and other ideas to grow Michigan housing
Bipartisan disagreement has stalled prior legislative efforts despite growing needs
Now, the divide is more complex, with state and local leaders agreeing on need but disagreeing on how to address

LANSING — Lawmakers have lots of ideas to solve Michigan’s affordable housing crisis, but with rising prices keeping homeownership unattainable for many, officials have so far been unable to agree on any concrete policy reforms.

That’s been partly due to a lack of bipartisan cooperation between Democrats and Republicans in past years, according to state housing officials.

But with Michigan facing an estimated deficit of 119,000 homes, there is emerging hope lawmakers will be able to work together to spur new construction.

One potential point of compromise is a bipartisan package that would reform zoning laws and allow more homes to be built on the same parcel of land. Backers say it would eliminate hurdles that have made it too hard for developers to make affordable housing projects profitable.

“There’s people on both sides of the aisle that are against it, there’s people on both sides of the aisle that are for it,” state Rep. Joe Aragona, a Clinton Township Republican and a leading voice in the reform effort, told Bridge Michigan this week as a House committee began consideration.

The legislation has some high-profile backers – Democratic Gov. Gretchen Whitmer and Republican House Speaker Matt Hall are generally supportive – but local government groups oppose the state overriding their local zoning rules.

Senate Majority Leader Winnie Brinks, D-Grand Rapids, has not publicly endorsed the legislation and did not respond to requests for comment this week.

“This is a weird issue, because it’s not a partisan issue,” Rep. Samantha Steckloff, D-Farmington Hills, told Bridge on Thursday. “This is literally local government people fighting against people who have never served in local government.”

Steckloff, Democratic state Sen. Sue Shink and Republican state Rep. Jaime Greene gathered with a group of roughly two dozen local officials on Thursday to voice opposition to the zoning bills, arguing they were crafted without any real input from the communities they would impact the most.

It’s the latest wrinkle in a debate over housing policy, which has been a focus of several lawmakers this term — but without much to show for it so far.

“Until we’re ready to be civil with each other, I don’t think anything is going to happen,” said Greene, R-Richland, adding that it was on lawmakers to “take outside influence out of this and actually get down to … what is actually best for the residents of Michigan.”

“We forget that sometimes in Lansing.”

Advocates: The time is now

The housing market appears to be cooling, but Michigan home prices still climbed 4.2% over the past year to a median price of $263,590, according to Zillow, the online real estate company. That’s less than the national average of about $400,000.

But Michigan’s median household income of $72,875 a year is also less than the national average of $83,730, according to the US Census Bureau, which this week estimated the state added about 22,500 housing units last year and now has a total of 4.7 million units.

This year alone, lawmakers have proposed several plans they contend could help address Michigan’s housing crisis, including bills to repeal certain real estate and property taxes, update the state’s mobile home codes and introducing a state-level tax credit to make building easier.

State Rep. Rachelle Smit, R-Shelbyville, has even argued that allowing longer campground stays in areas of need would “help solve the housing problem in our state.”

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None of those plans have advanced beyond the committee level in the politically divided Michigan Legislature, which is off to another historically slow start. Still, housing advocates are optimistic this could be the year.

“Not only in Michigan and in Lansing, but even nationally,” bipartisan groups of lawmakers are coming together on housing reforms, said Chris Potterpin, chair of the Michigan Housing Council. That “really sets the stage for somebody … to politically get something meaningful done now — more than we’ve ever had before.”

The zoning reform package gaining momentum in Lansing is not entirely new.

A version backed by Democrats stalled in 2024. This time around, some Republicans are on board, and Whitmer backed it in her State of the State Address, calling on lawmakers to improve “zoning and building codes” in order to “build more homes quicker, at lower cost.”

If lawmakers don’t act, “housing will continue to become more expensive and less attainable,” sponsoring state Rep. Kristian Grant, D-Grand Rapids, said Thursday in committee testimony.

Grant, who was part of the 2024 push as well, said the new bills are “very intentional about the key issues that they hone in on” such as minimum lot size requirements and allowing for “accessory dwelling units,” otherwise known as “mother-in-law suites.”

If enacted as currently written, the bill package would:

Ban minimum lot sizes of more than 1,500 square feet for a detached, single-family home, so long as the lot can be hooked up to the public water and sewer systems
Allow duplexes “in any district in which a single-family residence is … permitted” and subject duplexes to the same permitting procedures as a single-family home construction
Prohibit local zoning ordinances that require a minimum area requirement of greater than 500 square feet for a home
Bar zoning ordinances from excluding mobile homes in residential zones and allow the building of accessory dwelling units
Limit signature requirements for some protest petitions submitted in opposition to proposed zoning ordinance amendments

Local government groups remain strongly opposed.

The legislation would impose a “one-size-fits-all for everywhere in the state of Michigan that is impacted by this,” said Dan Gilmartin, executive director and CEO of the Michigan Municipal League. “They are mandates, period, plain and simple.”

Roughly two dozen local leaders from across the state gathered in Lansing on Thursday to oppose legislation which would increase the number of homes able to be built on a single lot, among other things. (Jordyn Hermani/Bridge Michigan)

Farmington Mayor Joe LaRussa said he personally invited Grant to his community to ask what they were getting wrong about housing and how zoning reform would improve things. He alleged she couldn’t answer.

Hall, the Republican state House speaker, said this week he generally supports the package but is opposed to some elements.

“We’re going to get rid of the part about they can just build these trailer parks wherever they want. That never made any sense,” Hall, R-Richland Township, told reporters.

Property tax cuts, housing tax credits and other ideas

Hall remains focused on reducing property taxes, which he has argued could positively impact the housing market.

Among other things, he wants to scrap what he calls the “pop-up tax” — a sudden increase in property taxes that occurs when a home is sold, as the taxable value “uncaps” and resets to 50% of market value — a move he says could encourage older Michiganders to downsize, making their larger homes available for middle-income families looking to upsize.

Hall has pitched a complicated plan to abolish Michigan’s State Education Tax, the real estate transfer tax, the “pop-up tax” and personal property taxes, a potential $5 billion cut for homeowners he would largely offset by extending the state’s 6% sales tax to certain services such as newspaper publishing, the performing arts, skiing, golf and country club memberships.

Brinks, the Democratic Senate Majority Leader, has panned Hall’s plan. Whitmer has proposed a smaller property tax break for seniors.

Whitmer has also backed a push to create a state-level housing tax credit that would pair with an existing federal program to draw more development dollars to the state for homebuilding. Aragona and Grant have introduced bipartisan legislation to make it happen.

Michigan is the only state in the Great Lakes region without a state-level credit and could join 30 other states with one, said Michigan Housing Council Chair Chris Potterpin.

It’s estimated the effort would cost the state about $42 million, which Potterpin said wouldn’t hit the state budget until 2030 by design, calling it “the most efficient program for building and preserving affordable housing this state has seen in a long time.”

The bills have the support of the Michigan State Housing Development Authority and have received a hearing, but not a vote, as of mid-April.

Meanwhile, in the Democratic-led Senate, lawmakers there are taking a bipartisan approach to reforming the state’s mobile home laws, expanding the rights of tenants at mobile home parks while placing new requirements on both park owners and the state regarding maintenance and inspection.

Michigan is home to roughly 1,200 licensed manufactured housing communities and more than 140,000 manufactured homes — reportedly the 13th most in the nation. More than 25% of those homes are owned by private equity firms, according to data from the nonprofit watchdog organization Private Equity Stakeholder Project.

“For too long, the laws governing these communities have not kept up with the realities residents face on the ground, from water shutoffs and rising lot rents to their entire community being sold out from under them,” state Sen. John Cherry, D-Flint, said in a statement this week.

The six-bill package unanimously advanced out of the Senate Housing and Human Services Committee on Tuesday but awaits a full Senate vote.