Housing

Michigan cannot simply build a new home every time someone wants to buy a house for the first time.  We must first ask "Why are we building new homes?"  "Are they the wrong homes?"  "Were they of poor quality?"  "Were they in the wrong location?"  "Are we letting good homes decay and rot?"  Yes, we will always need replacement homes - but let's look at the whole picture before jumping into action.  Some of the issues:

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• It is almost impossible for a bank to lend on a fixer-upper without a massive down payment:  We need programs for this and it is possible to fix this issue.  The tightening of appraisal processes after the housing crisis has severely exacerbated this problem.
• Many young adults no longer have the skills nor the desire to take on a fixer-upper:  Let’s address this – there are ways to do so.
• Foreclosure costs skyrocketed to $50,000 to $75,000 – making it difficult for banks to lend on inexpensive homes.  Retail banks used to make 60% of mortgages.  Today they make 30% of mortgages.  Let’s unwind some of this excess cost.
• Corporate investors are stepping into this void – this must be carefully managed - but not eliminated.  
• Consider bringing back, where appropriate, owner-occupied multi-family housing, including flats, duplexes and row homes.  Even the boarding house has a place.  You used to be able to rent a room for a month for between $100 and $150 in today’s dollars.  Study the communities experimenting with this to see what works.  This is difficult to do but it is possible.
• Address zoning to allow flexible housing but enact this from the bottom level up.  Local control of these issues is paramount.

• Study what is happening in the low end of the market that is not being captured in the data.  Very few homes under $100,000 now appear anywhere.  But they do exist.  It is difficult to lend on such a home so they sell for cash or land contract.  And those land contracts are not being filed.  Let's understand this before we launch grand home building plans.