Rents have been climbing, far above levels seen before the pandemic, putting a squeeze on more households trying to secure an affordable place to call home.
Here at the Capital Area Housing Partnership, as your nonprofit HUD-approved local housing counseling agency, we have unique insight into the challenges mid-Michigan residents face. We meet with our neighbors every day as they navigate their journey of finding a home within their means. Yet, with inflation at a 40-year high and a housing market out of balance, more and more people have become cost-burdened, meaning they spend more than 30 percent of their income on rent and utilities.
As a nonprofit organization that also develops attainable housing opportunities for Greater Lansing residents, we know there is an insufficient housing supply to meet demand. The National Low Income Housing Coalition estimates the shortfall of rental units available to very low-income households in Michigan to be nearly 205,000. Overall, housing supply is short for all income-earners — and market pressures on the home building industry over the last decade have made it challenging to produce enough housing units to meet demand.
Various factors are pushing the demand for more attainable housing across our region. Millennials are coming of age and looking to buy their first home. But with home prices hitting new records and a lack of supply available, would-be first-time homebuyers have been priced out of the market and are forced to continue renting, which drives rents higher.
Additionally, arcane and restrictive zoning laws such as density caps have made it challenging to navigate our local landscape and deliver the housing units needed to make our rental market more accessible and attainable. Thankfully, much headway has been made in Lansing by moving to a form-based zoning code that is a more robust alternative to conventional zoning.
Finally, over the past 40 years, federal tax policies have exacerbated massive income and wealth distribution to those at the top while shrinking middle-class households who struggle to make ends meet. The fair market rent for a modest two-bedroom apartment in the Lansing region is $909. The minimum hourly wage needed to afford a two-bedroom apartment without being cost-burdened is $17.48.
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A family earning Michigan’s minimum wage of $9.65 will never afford a market-rate rental unit without incurring drastic reductions to basic necessities like healthcare, transportation or food. Wages have not kept pace with rising housing costs, severely reducing the number of households who could otherwise afford market-rate rent, contributing further to increasing demand.
There is no easy fix to the housing crisis we face. Simply relying on the market, given its current pace of production, will never meet demand. Significant resources and adequate community investment will be critical if we ever intend to solve our affordable housing crisis. Doing nothing will perpetuate our community’s most vulnerable citizens and hinder our region’s economic vitality.
Rawley Van Fossen is the executive director of the Capital Area Housing Partnership, a nonprofit organization committed to developing strong and diverse neighborhoods with an emphasis on affordable housing, homeownership opportunities and financial stability for Mid-Michigan residents.
This article originally appeared on Lansing State Journal: The Mid-Michigan housing market is out of balance with no quick fix