Summary
Michigan has taken a major step toward expanding affordable housing with the approval of the Michigan Housing Opportunity Credit. Once signed into law, this permanent $42 million annual state tax credit will help finance affordable housing developments by supporting LIHTC and MSHDA-funded projects. The program is expected to create or preserve approximately 3,000 affordable housing units each year by closing critical financing gaps. Having partnered on affordable housing developments in states with similar tax credit programs, HDJ has seen how these incentives accelerate development, strengthen preservation efforts, and increase access to quality affordable housing across communities.
Michigan has reached a landmark moment for affordable housing. The Michigan Legislature recently approved the Michigan Housing Opportunity Credit as part of the state’s budget. Once signed into law by Governor Whitmer, this permanent state tax credit will provide $42 million in annual state credits to support affordable housing developments across the state. The new credit is designed to enhance federal 4% Low-Income Housing Tax Credit (LIHTC) pass-through projects, Michigan State Housing Development Authority (MSHDA) direct lending projects and select 9% LIHTC developments. For Michigan—and for the affordable housing industry—this is a significant milestone.
A Transformational Investment in Affordable Housing
The Michigan Housing Opportunity Credit could help produce or preserve approximately 3,000 additional affordable units each year by closing financing gaps that have become increasingly difficult to overcome in today’s development environment. As development costs continue to rise, additional equity sources like this can make the difference between projects that remain on the drawing board and projects that move into construction.
We’ve Seen What State Credits Can Do
HDJ has worked with affordable housing developers in several states that have implemented similar state LIHTC programs, and we’ve seen the impact firsthand. When states introduce tax credits, development activity often follows. Projects that once faced large funding gaps become financially feasible. Developers expand their pipelines. Preservation efforts move forward. Communities gain much-needed affordable housing. Michigan’s new credit has the potential to create similar momentum.
Ready to Support Michigan’s Next Wave of Affordable Housing
HDJ partners with affordable housing developers to bring successful LIHTC communities from concept to completion. We’ve seen how state housing credits can spark new development opportunities and we’re excited to help our clients do the same in Michigan. Whether you’re already developing in Michigan or exploring the state for the first time, HDJ can help you evaluate opportunities, understand local requirements, and position your project for success. We’d welcome the opportunity to discuss how HDJ can support your next Michigan development.
