LANSING — State officials say Michigan is moving in the right direction with housing access, spotlighting a program that is set to support more than 2,500 units in the next 10 years.
It’s called Tax Increment Financing, or TIF, an option for some developers that could provide a boost based on the future value of the completed project.
“This is future tax revenue,” said Yarrow Brown, executive director of Housing North. “So often these are properties that are not developed or vacant land, and not being taxed at a rate if there was infrastructure on it.”
Brown says the program allows developers to borrow from a local government, backed by the taxes that the completed development will someday generate.
“Once that is captured, that revenue goes right back into the community, and nothing is essentially taken away,” she said.
The program targets families earning up to 120% of the area median income.
The state has approved TIF plans for 19 projects and 1,600 housing units, including 170 in Traverse City.
Those developments are in addition to the 2,500 units that private builder Allen Edwin says they will build in the next decade with TIF funds.
The option is only available to developments in communities with a Brownfield Authority, like Traverse City or Emmett County.
Brown says that TIF plans seem to be one of the more effective housing policies that communities may consider.
“I would say a TIF is the best option for a developer, and is one of the best options for our communities to be able to build housing to bring that down to an affordable level for those that live and work here year round,” she said.
State leaders discussed the program at the Mackinac Policy Conference, along with the federal government’s involvement in housing policy.
Amy Hovey, executive director of the Michigan State Housing Development Authority, says a proposed expansion of the low income housing tax credit could support additional assistance.
“It’s primarily what we use to build multi-family housing for families at about 80% and below area median income,” she said. “In the last year, we used that product alone to create over 5,000 additional units in the state.”
Hovey said that two years ago the state was 190,000 housing units short of where it needed to be — now, Michigan is 119,000 units short.
