Impossible Housing

Spectator

The Housing North Housing Needs Assessment (HNA) has once again determined we need a virtually impossible number of residential units in the next year.

Let’s back up a bit. Housing North, according to their website, builds awareness and attempts to influence policy, increase capacity, and find solutions for housing issues in 10 northwest Lower Peninsula counties. According to the U.S. census, these counties—Antrim, Benzie, Emmet, Grand Traverse, Kalkaska, Leelanau, Manistee, Missaukee, and Wexford—include approximately 300,000 residents with around 190,500 residential housing units. Grand Traverse County alone claims about 100,000 residents and just more than 49,000 residential housing units.

Housing North produces their housing needs assessment based on a variety of metrics including demographic and economic data, on-site market research, and “primary data collection” partnered with Bowen National Research. NHA says our 10-country region needs 30,000 new residential units by the end of next year: 8,800 rental units and 22,000 for sale units. It is an impossible goal.

Think about those numbers for a minute and then consider the people living in those 30,000 new units. According to Census.gov, the average household contains between 2.05 and 2.45 people, so let’s take the average of 2.25 humans per household. That would be 67,500 new residents, a modern day record-breaking 23 percent one year population explosion. There is no mention of who the people are who so desperately seek homes in our region. (There were much bigger increases in the 1830s, 1840s, and 1850s due to the completion of the Erie Canal and dramatic increase in westward expansion of European settlers. The biggest previous modern day population expansion in Michigan happened from 1955 to 1956, and that increase was just 3.16 percent.)

But not just more people. Data USA says the average household now owns two vehicles, so 30,000 new residential units puts 60,000 more cars on the roads. Not to mention thousands of children in schools and thousands of new people who need basic services like healthcare or social services. And where will they work?

Then there are the actual realities of homebuilding. While there are currently no dire shortages of homebuilding materials, there are increasing costs and transportation/delivery bottlenecks with increasing demands. Diesel fuel increases means just getting materials delivered is now more expensive. Even worse, labor shortages, especially in the trades, impact construction schedules and costs. Labor now accounts for slightly more than 50 percent of a new home’s cost.

This is not a local problem, as Michigan claims to need up to 115,000 new housing units within a year, and nationally, according to the National Association of Realtors, we are underbuilt by about four million housing units. The National Low Income Housing Coalition puts the number closer to seven million.

There are areas with limited land and zoning restrictions seeing housing costs continuing to explode. But there are areas of the country where the housing bubble has burst with some government assistance. Home sale prices and rents have actually started declining in places like Jacksonville and Tampa, Florida, and especially Austin, Texas.

Austin in particular has seen a serious retraction in their home sales with prices decreasing as much as 25 percent from their high in May of 2022 during a post-COVID boom. Comparing Austin, with a population that just edged over a million, and our little region is a bit like comparing one apple to an orange grove, but maybe what has happened there is instructive or perhaps we would prefer to avoid their example.

They significantly eased land use and zoning restrictions, encouraged a dramatic increase in multi-family housing—they built an almost incomprehensible 50,000 new rental units in 2023-2024—and rent prices have dropped 19 percent since 2024. They currently have 16,500 residential listings, a near glut, and almost 58 percent have reduced their initial asking price as homes now take nearly 80 days on the market before receiving an offer. And even in bright red we-hate-socialism Texas, there are subsidies aplenty ranging from down payment assistance to reduced rents.

We are not going to build 30,000 new residential units in the next 14 months, and it’s a little silly to suggest such a thing. Nor are we going to level the landscape so we can build, build, build like they have in Austin. And we probably won’t choose the approach of some upscale communities that have now recognized that not everybody who wants to live there is going to be able to live there, no matter how much the local government tries to help.

While we’re trying to move at speed to build ever more housing we might want to step back, take a breath and ask ourselves if a charmless city of big box condos and apartments is truly where we want to be headed and why we’re in such a big hurry to get there.

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