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Granholm: Stimulus Helping Michigan Housing CrisisPrint

Thriving Communities | May 7, 2010 | By Glenn Puit

Governor Granholm says that President Obama’s American Recovery and Reinvestment Act is helping Michigan deal with its acute housing crisis.

When I caught up with Governor Jennifer Granholm at last week’s 12th Annual Michigan Conference on Affordable Housing, in Lansing, she was determined to tell me just how strong an ally Michigan has in President Barack Obama, particularly when it comes to the complex issues of affordable housing and economic stabilization.

The governor said the president understands that spurring an economic recovery in Michigan not only requires addressing the home foreclosure crisis, producing jobs, and revamping its industrial sector, but also addressing affordable housing and revitalizing Michigan’s urban centers.

Solutions can’t come soon enough for Michigan. The state has one of the highest foreclosure rates in the nation, reflecting our dismal 14.6 percent unemployment rate.

From Detroit to Grand Rapids to Traverse City, shelters and charitable organizations report increased demand for services. In Traverse City, for example, Martie Manty, director of the Father Fred Foundation, said the non-profit is seeing people they’ve never seen before: previously middle class people now devastated by the economic downturn, lost jobs, and, ultimately, lost homes.

“We have lots of people saying, ‘I never would have expected to have to come into Father Fred for help,’” Ms. Manty said.

Angie Gaabo, executive director of the Community Economic Development Association of Michigan, added that, despite the sharp, statewide decline in housing values, there’s still a serious problem regarding affordable housing.

“There is a mismatch between the availability of safe, decent, and affordable housing and what people can actually afford,” Ms. Gaabo said. “The problems with the credit market have made it very, very difficult for people to take advantage of the situation.”

In my interview with Governor Granholm, she noted that President Obama has helped steer more than $1 billion to housing in Michigan since he took office.

“People are really struggling right now,” Ms. Granholm said. But, thanks to Washington, she explained, “we’ve got some significant resources to really have an impact on keeping people in their homes, providing help for those who don’t have any homes, and for the rehabilitation of places, spaces, in urban centers that are greatly in need, and making sure we invest ‘in’ (our cities) rather than invest ‘out’ (in the exurbs).”

She said that the American Recovery and Reinvestment Act (ARRA)-also known as “stimulus funding”-is a big help to Michigan, and that, without it and new support from the U.S. Department of Housing and Urban Development, Michigan’s economic collapse would be even worse.

HUD Secretary Shaun Donovan was at the Lansing conference; during his keynote address he ticked off some large numbers describing the federal aid that’s helping to keep Michigan afloat. They quickly explained Ms. Granholm’s enthusiasm.

According to Mr. Donovan, the federal government has sent close to $10.6 billion in ARRA funds to Michigan. He said that the Act extended and increased unemployment insurance for more than 920,000 Michiganders, helped communities avoid laying off 9,000 teachers, and created or saved nearly 70,000 other jobs.

Mr. Donovan also pointed out that HUD invested more than a half-billion dollars in Michigan through ARRA, including nearly $60 million in public housing capital investments to make sure families have a roof over their heads. He added that the state now has more than $53 million in homelessness prevention and rapid re-housing funds to rescue families from homelessness.

In addition, he said, the administration also dedicated more than $63 million from the federal Tax Credit Assistance Program funds to jump starting stalled construction on more than 2,100 affordable homes in Michigan.

And an additional 2,000 units of affordable housing will be renovated soon, using $25 million in Green Retrofit funds, part of a $250 million ARRA program to make HUD-assisted multifamily housing more energy efficient-and affordable.

The first Michigan recipient, Mr. Donovan said, will be Cleveland Manor, a senior housing development in Midland. The retrofits are supposed to cut utility bills in those housing units in half.

Given these numbers, it’s no wonder Governor Granholm says Michigan has an ally in Washington.

Glenn Puit is a policy specialist at the Michigan Land Use Institute. Reach him at glenn@mlui.org.