Two weeks ago when the legislature was in session the House took up and passed four housing bills. Yesterday, the Michigan Senate voted to concur with the House, and the bills now head to Governor Whitmer for her signature!
The legislation expands programs to allow local units of government to work with developers, builders and non-profits to rehabilitate and expand workforce housing in their area.
The Housing Michigan Coalition, led by the Michigan Municipal League, Home Builders Assoc. of Michigan, Grand Rapids Chamber, and Housing North, have worked for two years to get these bills through the process. Special thanks to Senators Winne Brinks, Ken Horn, Jeremy Moss, Wayne Schmidt, and their teams, for their leadership on this important issue.
SB 362: Attainable Housing Facilities Act – Senator Winnie Brinks
Local governments may create an “attainable housing district” where property owners can apply for partial tax exemptions, reducing real property taxes to 50% of the average statewide commercial, industrial, utility for up to 12 years if they meet certain affordability criteria determined by the local unit of government. That criteria would include providing units at a price point that does not exceed 120% of the county-wide median income threshold for at least 30% of units in a multi-unit development. Local governments will have the flexibility to negotiate more than the listed thresholds to align with their housing needs and goals. This tool can only be used for 4 or less rental units and requires a minimum of $5,000 investment.
SB 364: Neighborhood Enterprise Zone Expansion – Senator Jeremy Moss
Establishing a Neighborhood Enterprise Zones (NEZ) has supported investment for infill revitalization for owner-occupied housing and mixed-use buildings in eligible communities for decades. With so many communities across Michigan facing an urgent shortage of housing, this bill extends the opportunity to utilize this tool in all Michigan cities, villages and townships. Local units of government subject to the expansion may designate an NEZ if the project encourages compact development, is adjacent to existing development and utilizes existing infrastructure. This tool can be used for households up to 120% AMI.
SB 422: Residential Facilities Exemption Act – Senator Ken Horn
The creation of a Residential Facilities Exemption would allow a temporary tax abatement on qualified new housing development in districts established by local units of government similar to the attainable housing district legislation. The abatement would enable renovation and expansion of aging residential units and assist in the building of new residential units to support workforce housing supply. The tool is similar to SB 362 with 30% of units required to be income-restricted to no more than 120% AMI. Qualified new housing developments may include multifamily or units in a multi-use structure with assurances that the units are occupied as a principal residence (year-round) to eligible households. This tool shall be used for projects with more than four units and requires a minimum investment of $50,000.
SB 432: PILOTS for Housing – Senator Wayne Schmidt
This expansion allows local units of government the discretion to allow a payment in lieu of taxes (PILOTs) agreement for residential development or rehabilitation. The local unit of government would set a policy to establish what conditions it would consider to offer a PILOT. The owner of an approved project would then pay an annual service charge that is the greater of tax for the property for the previous year or 10% of annual shelter rents obtained for new construction. For rehabilitation projects, the charge would be the lesser of the tax on the property the previous year or 10% of annual shelter rents. Currently (without this change), local units of government can only offer PILOTs in conjunction with approved state or federal programs/subsidies in a project.
Jennifer Rigterink is the League’s assistant director of state and federal affairs handling economic development, land use and municipal services issues. She can be reached at email@example.com or 517-908-0305.