Affordable Housing Fantasies

Spectator

We are told, ad nauseam, there is a housing crisis or a housing shortage or a housing affordability crisis or something. It’s true enough that housing, especially locally, has become expensive well beyond normal increases and well beyond inflation.

Inflation ended 2025 at 2.7 percent, but according to the Joint Center for Housing Studies, home prices increased 5.2 percent nationally and 5.6 percent locally.

Tariffs are not helping one bit, adding as much as $10,000 to the cost of new homes, according to the National Association of Home Builders, because of the extra costs on imports from China, Mexico, and Canada on items like steel, aluminum, drywall, cabinets, fixtures, and various kinds of fasteners. The recent threat of a 100 percent tariff on all imports from Canada would make things substantially worse as we import 12 billion board feet of lumber, about 24 percent of all we use, from Canada annually. Doubling the cost of a quarter of all the lumber we use would add substantial costs.

As it is, homes are already overpriced and not likely to come down any time soon. According to Redfin, the median listing price for a home in Grand Traverse County at the end of 2025 was $498,000, with the actual average sale price closer to $385,000.

(It should be noted here that while average and median listing and sale prices should be a fairly straightforward exercise for several companies, Zillow, Redfin, and the Federal Reserve Bank of St. Louis all claim different numbers for those categories because they all include different geographical areas.)

Benzie and Antrim Counties are similar to Grand Traverse County for median, average, and sale price figures. Our Leelanau County neighbors win the housing-is-too-expensive sweepstakes with the average sale price of a whopping $841,000 according to our sister publication The Ticker. At the other end of the pricing spectrum is Kalkaska County with average sale prices ranging from $170,000 to $210,000 according to Redfin.

Adding to the costs are some lingering supply chain issues and the immigration crackdown that has deported or discouraged many experienced construction workers from ever entering so we have an acute labor shortage in the home building industry.

Northern Michigan is not alone in this dilemma. We’re joined by the West Coast and the Sun Belt, where affordable home ownership has gone from the American dream to the impossible dream in less than two decades.

Most of California and the Pacific Northwest are in a real housing crisis. The average cost of a new home statewide in California is now $900,000, and in San Francisco it’s a ludicrous $1.44 million. Los Angeles, New York City, Silicon Valley, and Sun Belt cities are reaching price points only the top income earners can afford.

At the other end of the housing price point disasters, according to Rocket Mortgage, are West Virginia, Arkansas, Mississippi, and Ohio with most homes priced below $300,000 and many below $200,000.

Yes, a significant part of the issue is simple cost, but there is also a desire-outstripping-reality component. Many believe housing is a human right, though we can’t find it in the constitution or in statute. Maybe so, but that right would never include housing where we want it in the residence we want at a price we can afford.

We’re certainly not getting much help from the White House, though the president said he wants to prevent hedge funds and insurance companies from buying up single-family homes as investments. It’s not clear if he can do such a thing and might have just been one of his bits of rhetoric. We’re not hearing from the invisible Secretary of Housing and Urban Development (HUD), whose name you likely do not know without a Google search. It’s Scott Turner, former NFL defensive back and head of the White House Opportunity and Revitalization Council. Turner has been oddly quiet as the housing debate swirls around him.

What we seem to want to do locally is simply subsidize everything while encouraging ever greater density. (Density advocates should take an aerial look at some new construction and ask if five to six houses per acre with no yard, no trees, no nothing, and your neighbors practically close enough to touch is what folks coming to Traverse City really want.)

Here, it seems we all have to pay for everybody’s housing. We have programs that reduce the amount of property tax that would have gone to the general fund, another program that “captures” taxes that would have gone to the general fund, and we have pots of taxpayer money available in many circumstances. It’s hard to imagine that as a sustainable system over time.

We can’t have what we can’t afford, and we can’t keep asking other people to help us pay. We’ll need a new paradigm that might not include trying to shove everybody into downtown Traverse City.

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