'Solutions are out there'

In October of 2019, the average cost of a house in Michigan was about $180,000. To rent a studio or one bedroom apartment in Detroit, it costed $920 a month.

Today, that same house would cost $266,000, and that same apartment would cost $1,185 a month.

The rising costs of housing is no secret. The United States Treasury has acknowledged that the cost of homes has risen faster than the average income in the last two decades. 

Studies show that Americans are growing worried over housing costs every year, and it’s one of the many economic concerns on the ballot this election. Real estate specialists have also expressed concerns over the rising costs.

One of these real estate specialists is Patrick Bowen. Bowen is the president and founder of Bowen National Research, a company that specializes in real estate research on local, city and state levels. 

They have conducted surveys and assessments in all 50 states, as well as done statewide assessments for 9 states (soon to be 10, as he said the North Carolina Chamber of Commerce has reached out for a statewide survey as well.) Bowen said by 2026, the company will have surveyed 30 of Michigan’s 83 counties. 

Bowen has been working in real estate for nearly 30 years, and he said the housing problem is not new - in fact, he said it’s been building for the last 13 years because of the lack of inventory getting added.

“I was looking at national residential building permit numbers since the 2000s," he said. "The amount of new buildings (being) built plummeted and we’ve never gotten back to the previous 2008 levels."

I think what is different now is that the development of housing, or the supply side of housing, has lagged for so long," he said. "We have run a more than a decade-long deficit of housing supply. It is going to take years to get closer to more balanced market conditions.”

Bowen said there are two generations being affected by the rising costs: Millennials, the newest homebuyers, and baby boomers, who are looking to downsize into senior apartments or condominiums. He said rising home costs and rising mortgage rates are effectively locking the market.

“As baby boomers retire and downsize, they don’t have anything to downsize to, so they stay in their homes and that freezes the housing market,” he said. “I’m 58, and when my wife and I bought our house the rate was about three, four percent. If I sold now and had to borrow again, it’d be double that, so I’m holding onto my home.”

Additionally, Bowen said other factors are influencing the costs of housing, like economic growth and rising development costs. The latter he said is what is preventing affordable housing from being built, as the cost to create the building is far more than they would make back. 

He also said this is why rent keeps increasing, as developers need to make money off of the project and keep it running, which he said has gotten increasingly more expensive to do. 

“Developers are seen as the bad guy, but they’re really handcuffed because their starting point keeps rising in cost,” he said. “They know there’s a need, but they can’t bridge the difference. 

"They can’t make the numbers work … until we solve rising development costs, we aren’t going to see a material change in the development of more affordable housing for some time.”

For those not currently looking for homes, the company website has an interactive map to view apartments in the country, sorting them by market-rate (regular apartments), tax credit (partial or fully low-income), government subsidized (government pays part of the rent for low-income residents) or a combination of the three. 

The site also provides a plethora of research links to rental housing, senior facility agencies, state finance agencies and utility allowances (including for Michigan). 

On a statewide level, the Michigan State Housing Development Authority (MSHDA) created a statewide housing plan in 2022 with the goal of creating more affordable housing for Michigan residents. Some of the plan’s goals over the next five years include:

• Creating over 75,000 new or rehabilitated housing units
• Reducing equity gaps to accessible housing and homeownership
• Make homelessness rare, brief and a one-time occurrence
• To make over 15,000 households more energy efficient and make weatherization improvements

The plan separates the 83 counties into 15 different regions, each of which are working with the state, their own communities and outside sources, like Bowen National Research, to come up with plans to advance housing in their regions. Mount Pleasant falls into 'Region G' alongside many other central Michigan counties.

In Mount Pleasant, affordable housing options are available through the Mount Pleasant Housing Commission. Annessa Haist is the executive director for the commission, and said they are funded through the U.S. Department of Housing and Urban Development (HUD). 

She said the commission offers public, low income housing and Section 8 housing (which is privately owned by a landlord, and the tenant pays half of the rent while the commission covers the other half). 

She said the two areas differ by requirements. For low income housing, residents have to make less than 80% of the area median income (AMI), and for Section 8 housing they have to make lower than 50%. In Isabella County, the AMI is $16,750 for one person, and for a family of four it’s $31,200. (This data could be skewed by the county's large student population at Central Michigan University).

“Each of our tenants has an individual story which has led to a need for affordable housing,” Haist wrote in an email. “We are all just one unexpected event, like a medical emergency or job loss, away from needing affordable housing. Life’s unpredictability means that financial stability can change quickly, making affordable housing a crucial safety net for anyone.”

Haist said many tenants that apply to them are elderly, disabled, minimum wage workers or families that are struggling to obtain housing that isn’t geared towards students. She said this is part of the reason the commission has seen a rise in applications, alongside the weather getting colder and rising inflation across the country.

“This makes budgets tight and sometimes leads to hard choices that can result in eviction,” she wrote. “Currently, state vouchers (MSHDA) have paused their voucher issuance and are not accepting applications. This means the only available housing assistance is through housing commissions, most of which have long waiting lists. Their applicants are now filling out our application.” 

She said rising housing costs have been impacting the Mount Pleasant community for a few years, and families are moving away from the town as a result. Despite this, she said the commission is looking into creative solutions to create more affordable housing, like purchasing complexes and renting them out at or below the market value.

“The hard truth is that resources are limited because funding is limited, and mostly our hands are tied unless changes happen at the federal or state level to expand affordable housing,” Haist wrote. “Region G is currently conducting a survey of the need and what it will take to house our families. We are working to plan for the future and assure the issue of homelessness and housing insecurity does not continue to grow.”

Haist said those in need of affordable housing should stay optimistic and keep applying to different programs, even if they face challenges. She also encouraged those in need of or interested in affordable housing to reach out to community resources, such as the Isabella County Restoration House and the 211 Hotline, and to attend the commission’s public meetings. 

“Stay the course and try not to get discouraged,” she wrote. “Affordable housing is in short supply and most programs, including ours, will have a waiting list. Apply to as many assistance programs as you can so you can receive the first available housing … Often, the assistance needed to prevent a crisis situation is available, you just need to ask.”

For those who are looking for homes, Bowen said there's still hope for the market. He said there are three key components communities could look into to increase housing opportunities in their areas:

• Rethinking zoning, such as by allow for more units per acre than they might normally permit
• Expanding infrastructure, like expanding water, sewer, electricity and internet to areas it currently doesn’t reach 
• Bringing economic developers and employers to the table so they can be part of the solution

He said the fact that communities big and small are working towards creating solutions is already a good sign. Within his career, he said he’s seen collaborations occur between local and county governments to expand infrastructure and contribute to the development of new housing.

“If there is a silver lining in the nation’s housing crisis, it is that many markets face similar housing challenges and because of this, there are many communities trying out various solutions,” Bowen said. "In the end, each community needs to find their own path through their specific housing challenges. The good news is there are examples around the country to follow … Solutions are out there.”