In Michigan, a new push to fight homelessness before it begins

• A $4 million pilot program is hoping to tackle homelessness in 12 Michigan communities through what’s known as shelter diversion
• The program offers flexible funding for things like rental assistance, day care or even temporary transportation to people of certain income levels
• Participating organizations say the pilot isn’t just necessary — it’s also having real world, positive impacts on their local communities

BATTLE CREEK — A missed car payment.

A little help to make rent that month. 

Some money for a bus ticket.

It doesn’t take much for a person to find themselves at risk of becoming homeless, says Whitney Wardell, president and CEO of the housing nonprofit Neighborhoods Inc. of Battle Creek.

For some, the difference between a roof over their head or not is something as small as being unable to afford daycare.

But that also means sometimes all it takes is a little help to stay put. And that’s where community groups like Neighborhoods Inc. come in, working to help low-income residents avoid homelessness in times of need.

Its newest weapon in the fight? Funding through a $4 million statewide pilot program, known as shelter diversion, which offers flexibility to provide struggling people with various types of financial aid — including motel vouchers, bus tickets or even paying to help them get their driver’s license.

"This is typically the last stop for them before homelessness,” especially for seniors, Wardell said. “It’s the last thing that’s essentially affordable.”

With funding for the shelter diversion pilot program set to expire at the end of the year, advocates say it’s been a valuable tool. Among their success stories: A young mother with two children on the verge of losing her housing as she tried to escape domestic violence, said Wardell and Sanita Virgil, a housing stability services case manager for Neighborhoods Inc.

Neither identified the woman out of concern for her personal safety, but they said she was able to work with Neighborhoods Inc. to secure not just an apartment in the area but a full time job as well.

The nonprofit was one of six organizations initially chosen in 2023 to participate in the state-funded pilot. It received $500,000 to help address housing issues in Calhoun County the last two years. 

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Neighborhoods Inc. has so far spent about 75% of  the grant, with the bulk — nearly $147,700 — going toward rental assistance to keep people in existing housing, Wardell said. 

Accessing the aid can be as simple as reaching out to Neighborhoods itself online through phone or email. And while Neighborhoods only serves people in Calhoun County, calling the state’s 2-1-1 help hotline can redirect those in need to more local housing aid.

Of the roughly 480 clients the nonprofit served in 2024, Wardell estimated about one-quarter of them had utilized diversion funds to stay out of shelters. That’s significant in an area like Battle Creek, where shelters have reported overcrowding, especially in winter months. 

“It’s challenging, but rewarding,” said Virgil, who’s helping Neighborhoods administer the shelter diversion pilot while also serving as its resident housing navigator and community engagement liaison. 

“I truly enjoy helping people, and actually having a job where I get to help people stay housed? That’s a big thing.”

Michigan’s fight to end homelessness

The pilot program is part of a larger “campaign to end homelessness" in Michigan, which remains an uphill battle in a state where at least 33,226 people experienced homelessness of some sort in 2023, up 2% from the year prior. 

That includes 2,303 people in the southwest Michigan region that Neighborhoods Inc. serves.

Several states, like Illinois and Maine, have already created their own shelter diversion programs and are reportedly having some success in steering people away from homelessness. 

In Ohio, a shelter diversion program run in the greater Cincinnati area saw 95% of 2022’s program participants not return or become homeless in 2023 — a 12% increase from 2017 figures, according to Strategies to End Homelessness, Inc, an Ohio-based housing organization.

In Connecticut, which adopted a statewide diversion program roughly a decade ago, those figures are even greater. In Hartford, of the 18,000 people who’ve utilized diversion programming since 2015, only 244 later entered a homeless shelter between 2016 and 2019.

And in Michigan, preliminary data out of the state’s pilot also suggests some level of success. 

More than 2,100 people utilized the diversion program in 2024, according to the Michigan State Housing Development Authority. More than 1,300 had secured or kept some form of shelter and stability, whether that was keeping a rental property without any additional form of financial support, or staying in a substance abuse treatment facility.

“Diversion is a great way to move people into safer spaces so that they can be housed — have a better life moving forward,” said Jennifer McNeely, a MSHDA program specialist overseeing the state’s diversion pilot.

The program is accessible to people within participating communities who report making 40% or less of the median area income — $22,320 or less for an individual in Battle Creek, for instance, or $31,840 for a family of four.

From there the ultimate goal “is either to prevent the entry into homeless shelters or to keep their stay at a homeless shelter very brief,” McNeely added.

Half of the roughly $700,000 initially spent on shelter diversion efforts in the state has gone toward rent payment assistance, according to MSHDA, which tracked program spending through November 2024.

Of the 2,738 people served by the program through last November, nearly half — around 48% of people — were able to leave the program with some form of permanent or temporary housing, according to the state. 

The key to the pilot program is its flexibility, said McNeely. Funding can be used on anything from temporary child care funds to bus tickets in order to reach someone who could shelter a person on the verge of being homeless.

Hope for the future

Michigan announced the $3 million pilot program in 2023, with MSHDA using part of a $50 million state appropriation for housing supports to “test, expand, and implement shelter diversion practices and models in select homeless crisis response systems.”

The program initially funded community groups and agencies in Wayne, Washtenaw, Ingham, Ottawa, Calhoun and Ingham Counties. 

Citing early successes, the state announced a $1 million expansion in December, awarding additional funding to groups in Kalamazoo, Macomb, Eaton and Saginaw counties, along with regional groups in Northeast Michigan and the Thumb region.

The state is attempting to "demonstrate the program’s effectiveness in reducing homelessness and improving outcomes for at-risk households," MSHDA said at the time. 

At the end of the year, MSHDA will have to decide whether to continue the program using existing funding, or request additional money from the Legislature.

It’s a critical moment for the program, especially as the state grapples with how two children froze to death in a Detroit parking structure while their family lived out of a van. The family had reportedly reached out to the city’s homelessness call center multiple times for help but never received it.

While there’s no indication the family tried to access diversion funding, the city’s own strategic plan for homeless response improvement calls for more diversion-related funding in order to keep families in some form of stable housing.

McNeely, overseeing the pilot for the state, said there is appetite for continuing the program. But discussions on continued funding are still “in the very infant stages,” she said. 

Still she remains optimistic, telling Bridge the “future of the project is looking well right now" and that there is “ongoing advocacy for permanent funding for shelter diversion.”

In Battle Creek, Neighborhoods Inc.’s Virgil and Wardell can already attest to the positive outcomes diversion has had on their community, with Wardell saying she’s hopeful MSHDA will extend the grant funding.

“It means everything to me,” Wardell said of her work at Neighborhoods Inc. “I love to see people successful again. … To see those tears and to see the gratitude and appreciation of what we do in this community and who we serve? That’s what does it for me.”

The United Way of Saginaw County is hoping for similar success there, said Audra Davis, president and CEO of the organization, whose second-round grant of $165,000 officially kicked in at the start of February. 

The average length of time someone in the city of Saginaw experiences homelessness is about 75 days — and that around 50 children a night under the age of 18 go without stable housing, Davis said. 

According to Saginaw’s 2024 Point in Time count, there are approximately 325 individuals experiencing homelessness in Saginaw at any given time — a roughly 25 person decrease from the year prior. 

With the additional shelter diversion money, Davis hopes those statistics will drop even further. It also helps, she adds, that homeless shelters in Saginaw have around a 55% success rate — meaning more than half the people who leave the shelter go on to find some form of housing.

That’s why diversion “makes perfect sense as the next step” for the county, said Davis, who added she felt “blessed to be a part of this work.”

This story is part of Southwest Michigan Journalism Collaborative’s dedicated coverage of equitable community development. SWMJC is a group of 12 regional organizations dedicated to strengthening local journalism. Visit swmichjournalism.com to learn more.