By ZARIA PHILLIPS
Capital News Service
LANSING — A new modular housing option is in the works for some Michigan cities struggling to find low-cost homes for workers.
Low-income housing often goes to people with the least income, but “there aren’t a lot of options left in a lot of these cities for those in middle lower range that need housing,” said Katie Bach, the media communications director with the Michigan State Housing Development Authority (MSHDA.)
The agency is offering MSHDA Mod, a new housing program for cities with a growing workforce but with housing shortages. MSHDA intends to show developers that more housing can be offered for families in need of immediate housing by using modular homes that reduce production time and cost.
This is a statewide issue largely affecting rural communities with growing workforces like Grayling and St. Ignace, said Gary Heidel, the agency’s chief housing investment officer.
“We’ve been conducting a housing study since early October 2018 to determine if there’s a need for this type of housing, and we’ve found that the housing market doesn’t cater to areas with a growing economy,” Heidel said.
Already 55 cities and nonprofit organizations have expressed interest in the program.
St. Ignace, which has applied for the program, doesn’t have enough houses for service workers from Mackinac Island who have opted to move to that nearby city, said St. Ignace city manager Michael Stelmaszek.
The greatest need tends to be mid-priced homes, city officials say.
“We’re looking at the homes we can sell in the $150,000-$200,000 range,” said Keith Baker, the Coldwater city manager. People can buy older homes that are less than $150,000. New homes typically cost $250,000 or more.
Coldwater recently became the first to get one of 10 grants offered to cities displaying a critical need for the housing and interested homebuyers. The state program has $1.96 million to loan to cities that will use the money to build modular homes. The homes will be sold to low- or low-mid income familes.
The state grant is repaid when the homes are sold.
The cities must locate their own builders of the manufactured homes.
Coldwater is the first under the program because MSHDA has been monitoring the city’s economic growth since before the program conception. The city has been looking for solutions to housing the 800 workers brought in by new factory jobs. The city will receive $190,000 under the new state program.
“We were a part of a study conducted by MSHDA that determined we needed new housing,” Baker said. “These modular homes hopefully can prove to builders and developers that affordable housing can be built quickly at low prices and there’s a market for it. So we were one of the first communities to work with them.”
The rest of the cities will be awarded grants after March 1, state housing officials said. To qualify, cities must demonstrate they have sites available, that economic expansion is happening in low income areas and that there’s a population with less than the average median income in the area.
Communities that have applied for the funding include Traverse City, St. Ignace, Grayling, Kent County and Mason County.