Michigan to use $38M in opioid funds to expand housing for people in recovery

The Michigan Department of Health and Human Services is setting aside nearly $38 million for recovery housing to support individuals being treated for substance use disorder
The state is expected to get more than $1.8 billion from opioid settlements by 2040 to support prevention programs and recovery efforts
Recovery residence groups estimates 17% of Michigan’s population over the age of 12 meets the criteria for a drug or alcohol use disorder

Michigan is setting aside nearly $38 million to establish more recovery housing for residents being treated for substance use disorder.

The state has a goal to bring more than 3,400 new recovery housing beds online by 2028 to address the lack of stable living quarters available for those leaving publicly funded treatment facilities.

More than 7,500 times every year, Michigan’s substance use disorder treatment facilities discharge patients without stable housing, according to the state health department. Michigan saw more than 63,000 substance use disorder admissions in the 2024 fiscal year.

Leadership at the Michigan Department of Health and Human Services described the investment as providing “security, structure and dignity” to those in recovery while creating “meaningful, lasting change” in communities that receive the funds.

“Ensuring someone has a safe place to live is one of the most powerful resources we can provide to prevent setbacks in recovery,” said Elizabeth Hertel, MDHHS director, in a statement.

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The allocation is tied to the Michigan Opioid Healing and Recovery Fund, set up to direct the state’s share of national opioid settlement dollars. Michigan is expected to gain more than $1.8 billion from the pharmaceutical lawsuits by 2040, as it divides the money equally between the state-operated fund and one that flows directly to various local government bodies.

Michigan’s opioid recovery fund saw a net increase of about $84 million in the state’s budget signed earlier this year, setting aside a total of $132 million to support harm reduction, prevention programs and recovery efforts.

Previous use of the funding has supported substance abuse treatment programs in rural communities and provided tens of thousands of fentanyl test strips and Narcan kits across the state.

Dr. Natasha Bagdasarian, chief medical executive and Michigan Opioids Task Force co-chair, said transition out of treatment “is one of the most critical times” for people with substance use disorder.

“It’s a time when individuals face an increased risk of returning to substance use. Without safe and stable housing, the risk of overdose increases dramatically,” Bagdasarian said as part of the state’s announcement.

Federal housing policy shift

The state’s allocation toward “stable” sober living facilities comes at a time when the federal government has signaled its desire to pivot away from funding permanent supportive housing.

The US Department of Housing and Urban Development announced in November it would redirect dollars toward transitional housing and supportive services through $3.9 billion in competitive “Continuum of Care” grants. The reforms were tied to President Donald Trump’s executive orders on homelessness.

On Monday, HUD announced it had withdrawn the grant opportunity. The announcement came just two weeks after Michigan Attorney General Dana Nessel and a coalition of 20 other states sued to stop the changes.

Before the department removed the opportunity, Scott Turner, HUD’s secretary, said previous funding models for housing “incentivized never-ending government dependency” and that the new requirements forcing projects to compete would ensure success by measuring “how many people achieve long-term self-sufficiency and recovery.”

Advocacy groups like the National Alliance on Mental Illness say the Trump administration’s proposed changes had veered away from evidence-based research supporting permanent housing solutions, putting upwards of 170,000 families nationwide at risk of losing critical support.

“Without stable housing, we know what happens,” Hannah Wesolowski, NAMI’s chief advocacy officer said in a statement following HUD’s grant application’s announcement. “Individuals with mental illness too often cycle through emergency rooms, inpatient psychiatric units, jails, and homelessness.”

An estimated 17% of Michigan residents ages 12 and older met the criteria for a drug or alcohol use disorder in 2021, according to the Michigan Association of Recovery Residences, with many not receiving treatment. As of June 2025, the group has certified 322 substance-free living facilities in the state and 2,669 recovery beds available across 41 counties.