By Andrew Roth
Capital News Service
LANSING – While Gov. Gretchen Whitmer called for the state to invest $437 million in affordable housing in her budget proposal for the upcoming fiscal year, environmental advocates say she didn’t go far enough.
Whitmer’s proposal falls far short of the $1.6 billion investment environmental groups hoped for after some Democratic legislators pushed unsuccessfully for that amount last year.
Charlotte Jameson, the chief policy officer for the Michigan Environmental Council, said Whitmer’s proposed budget is a good starting point to begin negotiating with the Legislature.
“The important building blocks are all there for further negotiations,” Jameson said.
Whitmer acknowledged that her budget is unlikely to be passed exactly as presented, joking in a press conference, “That’s going to be pretending. We know how this process goes.”
Moving in the right direction
José Reyna, the executive director of the Grand Rapids nonprofit GreenHome Institute, said that even though the plan falls short of what organizations in the “Resilient Homes Michigan” coalition hoped for, he is still pleased with what Whitmer included.
“It’s incremental, and that’s typically how funding works in government,” Reyna said. “To move in that direction was a positive signal of things to come in the future.”
Whitmer’s proposal for the fiscal year that begins Oct. 1 includes funds to improve energy efficiency through rebates on home appliances, develop new affordable housing options and rehabilitate vacant, underused and blighted structures.
Her new $437 million affordable housing proposal comes on top of an additional $300 million for housing the Legislature recently approved for this fiscal year, which ends Sept. 30.
That budget supplement included money to convert underused properties, like vacant factories and schools, into housing and small businesses.
Addressing the need for middle-class housing
It also included funding for the “Missing Middle” program, which builds housing for middle-class families. Whitmer expanded eligibility for that program.
Whitmer’s office noted that someone earning the median income in the state could afford a house priced around $175,000, but the average cost of a new home is $307,000.
Additionally, half of renters spend more than 30% of their paycheck “just to keep a roof over their heads,” Whitmer’s office said.
Employees making minimum wage would have to work two full-time jobs to afford the fair market value rent of a two-bedroom home, according to the National Low Income Housing Coalition in Washington, D.C. They would have to work 61 hours per week to afford a one-bedroom home.
And that’s before accounting for utilities and other costs, which can be especially pricey in aging homes that are poorly insulated and have energy-inefficient appliances.
Making homes more energy efficient
Consumers Energy and DTE customers also face increasing utility costs because of the spike in fossil fuel prices. Low- and moderate-income households spend between 6% and 21% of their income on energy, according to the Natural Resources Defense Council.
Whitmer’s office notes that 47% of the state’s housing stock was built before 1970, highlighting the need for improvements to energy efficiency.
Jameson said, “Electric and gas utility bills for Michiganders are set to hit an all new high next year as rising costs for methane gas and fossil fuels get passed on to customers.”
Jameson said that investing in weatherization and transitions to electric heat pumps and other energy technology would help consumers avoid the “sticker shock brought on by a dependence on volatile fossil fuels.”
According to a report from the Department of Environment, Great Lakes, and Energy, every $1 invested in reducing energy waste in homes – through more efficient windows, lighting and other technologies – could save homeowners $3.20 or more on future energy bills.
Laura Sherman, the president of the Michigan Energy Innovation Business Council, said weatherizing homes is not only good for the environment, but also for the economy.
“Weatherization is an important tool for reducing home energy costs while ensuring our homes are safe and comfortable,” Sherman said. “These projects also support and help grow Michigan’s workforce.
“Advanced energy companies employ close to 120,000 people in Michigan, with the majority of those jobs connected to energy efficiency,” she said.
Weatherizing not always always possible
However, weatherizing older houses is challenging due to other side effects of their age.
According to the Department of Environment, Great Lakes and Energy, 25% of all weatherization projects across the state are deferred because the buildings need a new roof or upgrades to remove carbon monoxide to qualify for funding administered by the state.
That proportion is even higher in older areas like Detroit, where the deferral rate is as high as 75%.
Briana DuBose, the director of strategic community initiatives for Detroit nonprofit EcoWorks, said further investment would help address socioeconomic disparities in the impacts of climate change.
“Low-income communities and communities of color are shouldering the impacts of our climate crisis and are the least able to cope with rising costs,” DuBose said.
DuBose said the full investment of $1.6 billion would have ensured that “we are building wealth by investing in communities that we have historically left behind.”
Buildings and appliances are the third-highest producers of greenhouse gas emissions in the state.
“Buildings are responsible for close to 20% of Michigan’s greenhouse gas emissions, and combustion of fossil fuels indoors from heating and cooking leads to unsafe levels of toxic air emissions in our homes,” DuBose said.
The state’s first Statewide Housing Plan
Reyna said proposals for more state spending on affordable housing could face challenges from legislators and groups who oppose development incentives.
Whitmer signed an executive directive earlier this month reorganizing how the state funds and builds housing. The change shifted the administration of some grants from the Michigan Strategic Fund to the State Housing Development Authority, a move that her office says allows more flexible funding to promote and expedite housing innovation.
Last year, Whitmer released the state’s first Statewide Housing Plan with goals to build or rehabilitate 75,000 housing units, weatherize and improve energy efficiency for 15,000 homes, and make housing more secure for 100,000 families.
