Old buildings, new ideas: Michiganders fight housing shortage with innovation

• Michigan is the in the midst of a housing shortage, prompting state and local officials to take creative action in the fight
• That includes things like employer-assisted housing backed by the state and creating tiny homes on the west side of the state
• The push to address the state’s housing shortage also means good news in Michigan’s fight against homelessness

LANSING — When the Capital Area Housing Partnership acquired the long-defunct Walter French Junior High School just outside of downtown Lansing in 2017, few believed in the vision.

But today, there’s new life within the three-story building — 76 units’ worth — as officials recently christened the apartment complex The Residences at Walter French. Crews officially finished construction on Dec. 27 and, over 2,000 applications later, the building reached maximum occupancy by Jan. 20.

It’s a testament not just to the creative approaches nonprofits and businesses are taking when tackling the state’s affordable housing crisis but also to the dire need. That sometimes means school groups stepping in to build 90 housing units for northern Michigan educators or a real estate firm revitalizing an old Fifth Third Bank in Grand Rapids into apartments.

“If we can make sure that more people in our community are in safe, affordable housing, then we’ll all be better off,” Capital Area Housing Partnership Executive Director Emma Henry told Bridge Michigan on Monday.

The Michigan State Housing Development Authority (MSHDA) estimated Michigan was short nearly 190,000 housing units at the start of 2024, though that has dropped to roughly 141,000 housing units, in part because of the state’s aggressive building and rehabilitation effort over the last few years and other often creative efforts around the state.

Groups like the Lansing-based Capital Area Housing Partnership or HOPE thru Navigation, a housing nonprofit situated in Kalamazoo, try to bridge the divide.

In the case of Kalamazoo, that looks like building 36 tiny homes — defined as a place with less than 450 square feet of living space — in six different locations across the city, with the goal of housing those formerly incarcerated. 

Doing that isn’t easy, said Gwendolyn Hooker, HOPE thru Navigation’s founder and CEO, but things that genuinely make a difference rarely are. 

“We want to create people that can purchase their own home,” she said. “We want people to be able to pay their rent and save money.”

Build, businesses, build

To address Michigan’s lack of housing stock, state officials set a goal of creating 115,000 housing units across Michigan by September 2026.

As of March, about 57% of the project, or 65,372 units, had already been completed, with a mix of new and refurbished homes. That’s no small feat, said MSHDA Director Amy Hovey, who told Bridge that Michigan is emerging as a leader in creative approaches to housing.

“Just even today, I got two emails — one from Nevada and one from Vermont —  saying, ‘Hey, can you send us how you got that done?’ Because people are realizing the innovation we're doing and want to be able to try to get similar programs in their states, as well,” Hovey said. 

From implementing a downpayment assistance program for first generation homebuyers to recently kicking off mortgage rate relief efforts, Hovey noted the programs “have such pent up demand.” That includes demand for the recently announced $10 million Employer Assisted Housing Fund, which Gov. Gretchen Whitmer unveiled earlier this year. 

The program, which began taking applications at the end of February, plans to partner with businesses in the hopes of growing affordable employee housing options as it chips away at the state’s ongoing unit shortage. 

“If we want people to move to communities for work, they need affordable places to call home,” Whitmer told attendees of the Northern Michigan Policy Conference in Traverse City when unveiling the fund in January. 

Businesses investing in Michigan housing stock isn’t a new phenomenon. Whirlpool Corp., a home appliance business headquartered in Benton Charter Township, won state subsidies to open an 80-unit, Benton Harbor-based apartment complex in 2023, now known as the Emma Jean Hull Flats.

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While the apartments are available for anyone to lease, tenants are required to be Benton Harbor residents for at least one year. Other units in the complex are reserved for public service workers, such as first responders or teachers. 

Then there’s Short’s Brewing Co. in Bellaire — which purchased a local hotel for employee housing — and the University of Michigan Health-Sparrow, a Lansing hospital that recently donated nine local homes to the Ingham County Land Bank and Habitat for Humanity Capital Region.

While Hovey wouldn’t say how many applications MSHDA’s seen for the Employer Assisted Housing Fund, she did say applications were “scattered throughout the state, which we are appreciating.” 

Coupled with a push from local governments and nonprofits reimagining spaces, Hovey said it wouldn’t surprise her if Michigan’s real housing shortfall is closer to 100,000 units when updated data releases next month. 

“We’re really looking at how we approach everything in a comprehensive way,” she said, adding: “It’s not just a single point that’s going to fix the housing crisis.”

Out with the old, into the new

When it comes to creating housing, as Capital Area Housing Partnership’s Henry can attest, it can be an arduous process.

The group acquired rights to the Walter French property in 2017 through a gift, then spent the better part of six years pulling everything together prior to breaking ground in June 2023. 

But the coronavirus pandemic inflated building and labor costs, Henry said, causing at one point an “insurmountable” $9 million gap between the money the Capital Area Housing Partnership had and the money it would need to complete the project. 

“So, we went back to the drawing board, went through the construction specs, and found ways to lower costs,” Henry said, adding that it ended up costing $25 million to renovate the building.

The units at Walter French are mostly open to anyone, so long as the entire building remains under 60% of the area’s median income — about $55,300 for a family of four in Ingham County. 

It’s expected the Capital Area Housing Partnership will spend another $10 million this year when creating a 110-seat daycare center on the complex grounds, she added, alongside new headquarters for the nonprofit, bringing the overall project costs to roughly $35 million — much higher than initially anticipated.

That was also the case in Kalamazoo, where HOPE thru Navigation CEO Hooker said that, when the group planned to break ground on the first of six tiny house hubs in 2020, they were quoted at around $38,000 for each 410-square foot build. 

That groundbreaking never happened. When Hooker resumed talks with contractors following the pandemic, she said the project’s price tag had quintupled to nearly $200,000 per tiny home. 

Overall, to build three small homes and an on-site commercial building for the nonprofit would be close to $1 million. Hooker was able to find a contractor who took on the job for less than half that amount, but “we cut a lot in the project,” including ditching the idea to fully furnish the apartments.

Three of six tiny houses in the first “hub” have already been completed and are rented out, she added, with the other half of the hub to be completed this fall. 

Even with just three units completed, Hooker said the group has already received 200 applications, though roughly half have been rejected as applicants are unaware they need a criminal background to rent the units. 

Hooker said the group wanted to house those with criminal backgrounds because such backgrounds are not a protected class under the state’s Fair Housing Act. Even if a person has the money to rent, a landlord could deny their application — or even terminate their lease — if they feel a person’s incarceration history poses a danger. 

Hooker said her group’s tiny house project fills “a gap in services for that population” and keeps people from potentially experiencing homelessness as a result. It’s an issue she cares deeply about, being formerly incarcerated herself.

She counts herself as lucky, saying she had a “very good support system” and “great family” who helped her with getting back on her feet. But, Hooker added, “other people coming home may not have that same experience.”

“It's a matter of being able to alleviate the experiences you know people have when they come home,” she said, “but really not know what to do or where to turn.”