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Governor's State of the State address proposed dollars for addressing housing crisis

Housing under construction
Gerry Broome
Housing under construction

In 2023, Gov. Whitmer commissioned the first-ever statewide housing plan addressing the housing crisis. In her 2024 State of the State Address, she announced a plan for constructing or refurbishing 75,000 units over five years, committing $1.4 billion in the next budget. How could that money be spent in West Michigan? WGVU spoke with Eureka People, President of Housing Kent

Eureka People: I want to say in general, obviously we're in a national as well as a local housing crisis. And it is a problem that's been decades in the making, so it is of epic proportions. And I don't think that most of the general public really realize that or realize the depth and the magnitude of the issues. And so even at the state level, I mean, there's like a 75,000 affordable housing unit gap that the statewide housing plan is seeking to address. And at a local level in Kent County, on the supply side alone, we have a 35,000-unit housing gap that we're trying to address in a five-year plan, as well as, you know, we have some pretty big numbers in terms of affordability, where there are about 30,000 households who struggle with affording where they live today. And we also have about 10,000 people who are struggling with homelessness. And all these numbers are increasing. And the governor's investment is quite welcome and very bold and strategic. So, it's $1.4 billion and that's going to be allocated, I believe it's just for this fiscal year to build 10,000 homes to begin to chip away at the housing deficits that we're experiencing. And then this investment is specific to investments that are going directly to homeowners, and I believe the home builders, if I'm not mistaken, to be able to again to reduce the supply deficit that we're experiencing. And so, from my perspective on the ground, I am super excited to see her administration really make these historic developments in order to address, again, these long-standing issues. And it can do nothing for us on the ground except bolster our enthusiasm and build momentum as we're really seeking to mobilize a community of stakeholders for everybody to get involved and everybody to do more because it really is going to take our collective community to really solve these problems at scale over time.

Patrick Center: How will this be an incentive for building more affordable housing?

Eureka People: I am not necessarily a finance expert in housing, but I do know that as we're looking to move forward, affordable housing development has to be seen, obviously not as a way to be the cash cow, if you will, are the biggest way to have the greatest return on your investment. So, it's almost like we have to do partnerships with people, like the revolving loan fund at Kent County is an example where developers or investors agree to a lower return on investment because they really just want to have community impact. And so there has to be more to the story than just the financial return on investment, but it's really the return on investment in terms of what type of community we want to see and what types of opportunities we want to create for the people that are in our community. Telling people all the time that because of the way the housing market is right now, the American dream is literally at risk or it is out of reach for many households. In Kent County, which is the only county that I could really confidently speak about data right now, we know that the average home sale value is $300,000. The income required to qualify for a home loan for that average home sale value is $107,000 annually. And so many young families, college graduates included, are coming out of school. And I can't tell you how many parents I'm talking to that are telling me how much their college graduated children are struggling with trying to purchase their first home because they're just not available or accessible to them. And so, if you think about that, it's placing that trajectory further and further away from them again, to start their own pathway of creating intergenerational wealth building and economic security even for their own children. And many of them, depending upon their background, their parents don't have the $20,000 that they can just give them as a down payment in order to bridge the gap. And that delay has some implications, I think, for our community as a whole, just in terms of the fabric of the family, education, healthcare, just a number of other things kind of reverberate from that ability to delay the American dream. And then there are other areas that we can talk about and break down when it comes to the renters and the level of economic insecurity that they're experiencing. On average, they pay more than $400, I think, more than what they could really afford. So, they're not able to pay for basic needs, other essential items they can't save. And so, they're almost in a cycle of economic poverty, many of them, because they can't ever break through to even get to a pathway of home ownership. And so, there's just a lot that's happening. I think that Governor Whitmer's investment and, again, a collective effort across our communities could really make a big difference.

Patrick Center: And the governor has been stressing the idea of retaining and attracting talent in the state. So, this is something the business community also has skin in the game.

Eureka People: Yeah, the business community definitely has skin in the game. And oftentimes when the business community thinks about it, they think about workforce housing. So, they're thinking about their skilled labor force. And many of their insights are just spot on. I think even from Tech Week, a few months ago, if I'm not mistaken, or sometime last year, they were talking about that. And it's how do you create workforce housing so that you could attract and retain the talent that we need in order to meet the growing demands for the future workforce, actually for the current and the future workforce, especially with skilled labor jobs. Housing Kent's perspective based on our data would say you also need to think about your current workforce because again, many people working in our industries today, especially that skilled labor component, are living in economic distress because of housing insecurity. Again, if you're struggling to pay rent or struggling to make your mortgage payment, you're showing up to work performing less than optimally. So, you're not getting the best out of your employees because their attention is divided because they're stressed about how they're going to make ends meet. They're stressed about whether or not their car is going to break down and are they going to be able to put food on the table for their children or if they have an emergency, is their transportation going to be reliable. And so, they're coming to work with a lot of psychological mental burdens, if not duress, and that's got to be impacting their performance. And so even if we could alleviate, maybe it's a one-two punch, like a both-and, you know, create this new workforce housing for skilled laborers coming in, but also alleviate them with the cost burden for the existing workforce. It could be a benefit to employers overall because you're just increasing the productivity of your workforce.

Patrick Center: Is there an outline for how the $1.4 billion will be distributed? Are you in conversation with the state to know how this will be delivered?

Eureka People: So, to my understanding how the 1.4 billion will be distributed, and again, I am not in direct conversation with the state, but I believe it's going to be distributed in accordance with the statewide housing plan, which has a couple of layers of infrastructure. One is MISHDA (Michigan State Housing Development Authority) in partnership with the statewide housing group. And then the second layer is the regional partnership, which a member of our team participated in, and there are 15 regions in Michigan, and they were a collaboration of multiple partners that then set local priorities for how the dollars could be allocated. Housing Kent would actually welcome the opportunity at the local level at Kent County to be able to partner with the state and how those resources could be distributed at a local level because we support a network of organizations called the Housing Stability Alliance, public private sector network, but essentially all of the housing providers participate in it. And so, this group, the Housing Stability Alliance really has probably the most expertise on where the local housing gaps are across the full continuum of housing from homelessness response all the way to supply and could really help direct those funds and investments in the best way by tapping into our local providers in a way that we've probably never done before because we've never had this opportunity before. So, I think it'd be a great opportunity to partner with the governor's administration if we're afforded that.

Patrick Center: So, you have a blueprint. You're ready to go right now.

Eureka People: We are in the making of ready to go right now. We're in the process of creating our state of housing report. And so, we've got parts of the landscape map already completed, and we anticipate that we will have that report ready to go and for public consumption by the end of the second quarter.

Patrick Center: Is there capacity? Can builders bridge that gap fast enough?

Eureka People: Unfortunately, I think my answer to that is no. But again, I think it's because contextually, again, this is a problem decades in the making and it's not just what builders do. There have to be policies in place that remove the bottlenecks. For example, to restricted densities that allow, again, more density, different types of housing. In that regard, there have to be other policies in place that are enacted that remove discriminatory barriers or just housing inequities that have been in place. And Governor Whitmer's plan, at least the statewide housing plan really does address that very well. There also have to be other investments again, private public sector partnerships. Like it really does require an alignment of all of the players. And that I think is really the work. It's to what you were talking about earlier, it's to how do we stop working in silos and work as a system and stop playing our own individual sheet music and play one score together. And that I think it's going to take a lot more effort. And until that happens, I think the speed of change will be slower than what we would like for it to be. But then once we all get on the same accord, I think we can see some exponential growth and changes that are aligned with the housing outcomes that we all desire.

Patrick Center: Eurica People, Housing Kent, thank you so much.

Eureka People: Thank you so very much, Patrick. It was a wonderful interviewing with you.

Patrick joined WGVU Public Media in December, 2008 after eight years of investigative reporting at Grand Rapids' WOOD-TV8 and three years at WYTV News Channel 33 in Youngstown, Ohio. As News and Public Affairs Director, Patrick manages our daily radio news operation and public interest television programming. An award-winning reporter, Patrick has won multiple Michigan Associated Press Best Reporter/Anchor awards and is a three-time Academy of Television Arts & Sciences EMMY Award winner with 14 nominations.