More HUD funding needed for Michigan affordable housing

It’s so hard to find subsidized housing in Michigan that the state Housing Development Authority had already gotten permission to pay 120 percent of a federal figure for fair market rents here — and sometimes that still wasn’t enough.

“That helped, but it still didn’t cover that gap,” said Lisa Kemmis, director of rental assistance and homeless solutions for MSHDA. “Even at 120 percent, it’s closer, but it’s still not where the market will support. … It’s tight.”

Across the state, thousands of low-income people who have access to housing vouchers that help pay their rent are having trouble finding landlords who will take them, when they can get more income on the open market. A federal measure that dictates what local agencies can pay was recently raised, but even with that increase, it’s not clear that it will be easier to find shelter.
Kemmis has looked for other means to incentivize landlords to offer their apartments for subsidized housing. A $600 bonus for landlords who sign on has had some success, as has a $3,000 guarantee above a tenant’s security deposit to help ensure any damage will be paid for.

“We had to employ strategies to attract and retain landlords,” Kemmis said. “They can probably achieve higher rent not accepting a voucher.”

Next month, the amount of money landlords can get will increase. HUD recently announced that it was raising fair market rent rates by an average of 10.3 percent across the state, including by 11.9 percent in metro Detroit and 9.7 percent in Ann Arbor. That puts rates at $1,213 a month for a metro Detroit two-bedroom apartment and $1,384 for a two-bedroom apartment in Ann Arbor.

Nationwide, there is an increase of 10.4 percent, on average. Since 2016, HUD said, the annual increases have been around 4 percent.

The voucher program uses federal HUD dollars to pay private landlords rent, covering some or all of the cost of housing for low-income families, the elderly and the disabled. There is high demand for the program, and local waiting lists — some of which have thousands of people on them — have largely been closed for years.
Housing providers have leeway to spend their funds on housing voucher recipients up to 110 percent of the federal measure, which is an estimate of how much it would cost to cover both rent and utilities on rentals in an area at or below the 40th percentile in costs. . But the extra 10 percent Kemmis is using required special permission, and she’s hoping for continued approval, even with the large increase in rates.

“Another 10 percent, we see it giving our families a better opportunity to access affordable housing,” Kemmis said.

When the new rates go into effect Oct. 1, Kemmis said they will help provide leeway for about 2,500 families — including about 500 in metro Detroit — that have received housing vouchers, but are still looking for places to use them. There are about 27,700 housing vouchers in use statewide, MSHDA said, including about 8,000 in Wayne County.

But the more she spends, the fewer families can be served.

In Ann Arbor, where rents can “wildly exceed” 110 percent of the fair market rent, Jennifer Hall, the executive director of that city’s housing commission, said she’s started to intentionally spend more money than she has. She already can’t use close to the 1,938 vouchers she has access to, and with 20 percent of tenants who have vouchers unable to find housing, Hall said she regularly exceeds her allotment in the hopes that HUD will use money other areas haven’t spent to cover the gaps.

“They don’t promise they have enough money,” she said of the gamble. “The first year, I was scared to death.”

But now, she said, it makes sense from a strategic perspective to show the need — and hope the funding follows. The waiting list for access to housing vouchers was last opened in August 2020; there are about 2,900 people on it.

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