A July op-ed in this publication, “Michigan’s housing shortage requires urgent action,” lays out a familiar diagnosis: the state is short more than 119,000 homes, prices have climbed to an average of $263,590 and gridlocked legislators are the only thing standing between Michiganians and relief. Build more, the argument goes, and prices come down.
The shortfall number is real, and zoning reform is worth pursuing. But “build our way out of it” assumes the crisis is mostly a story of too many people chasing too few homes. That story fits Texas or Florida. It doesn’t fit Michigan nearly as well. The state’s population grew just 1.4% from 2015 to 2025, compared with 6.2% nationally, 38th among all states over that decade. This is not a place absorbing waves of new residents who are bidding up a fixed housing stock.
So, what is actually squeezing the teachers, home health aides, retail workers and other households earning at or below 120% of area median income (AMI)?
Wages are part of it. Michigan’s real median household income has grown about 12 to 14% since 2005, roughly 0.6% a year. That’s growth, not collapse, but it’s the wrong number to hold up against the overall inflation rate, because lower-income households don’t spend like the average household. Housing costs have risen about 1.5 times faster than every other category of spending combined, and for a family near 120% of AMI, housing eats closer to 40% of the budget — well above the one-third that standard inflation measures assume. Whatever wage gains these families have seen are getting absorbed by the one cost rising fastest.
Financing costs matter too, and they have nothing to do with how many homes get built. Interest rates, which were near 3% in 2021 for a 30-year mortgage, had more than doubled two years later and have stayed steady since. That shift alone cuts the purchasing power of a fixed income by roughly a third — no zoning bill touches that.
None of this means Michigan doesn’t need more homes. Economists have shown for years that restrictive zoning drives up costs in high-demand markets, and Michigan has a few of those, especially around Ann Arbor and Grand Rapids. But Harvard’s Joint Center for Housing Studies has also found that cost burden nationally tracks stagnant incomes about as closely as it tracks unit counts. Supply matters, but so does what people are paid.
Michigan’s debate around a purported housing shortage keeps treating them as either-or.
The “119,000 homes short” number misses something else worth saying plainly: Michigan doesn’t just have too few homes; the affordable homes we have are too far from the job-growth centers. Michigan State’s Institute for Public Policy and Social Research has mapped this mismatch directly, and it shows the state’s affordable housing stock is concentrated far from where the jobs are. The Citizens Research Council of Michigan has pointed out what costs households: for lower earners, the extra transportation spending can rival what they’d otherwise pay in rent. An inexpensive house two counties away from the job site isn’t an affordable housing solution, it’s a longer commute with better branding.
Michigan’s economic development strategy bears real responsibility for that. For a generation, Lansing has pursued plant announcements and tax-credit deals but pushed the question of where the new workforce will live to local officials after the ribbon was cut. The Michigan State Housing Development Authority’s (MSHDA) Employer-Assisted Housing Fund, started last year, exists because the state has repeatedly recruited jobs to places without recruiting housing to match. Employer participation in the fund is voluntary when it should be mandatory.
Whatever comes out of the ongoing debate about the future of economic development policy in the state, one change should be automatic: any incentive package large enough to draw legislative scrutiny should have a housing plan attached. A new project promising hundreds of jobs should prove, using MSHDA’s Regional Housing Partnerships, that affordable housing already exists or is funded within commuting range. Today, a deal can check every box on jobs and capital investment and never touch housing at all, because there is no box for it.
Supply-side constraints need to be addressed, but if we ignore the factors contributing to the demand side of the equation, we do so at our peril. Pass the zoning reform. But jobs policy and housing policy can’t continue to stay in separate rooms — the families caught in this crisis don’t experience them that way.
Aaron Seybert is managing director of the Social Investment Practice at The Kresge Foundation.
This article originally appeared on The Detroit News: Michigan’s housing crisis is about more than building homes | Opinion
Reporting by Aaron Seybert / The Detroit News
USA TODAY Network via Reuters Connect
By Aaron Seybert | USA TODAY Network
