A Flexible Regional Housing Fund Is Essential for Northern Michigan

Guest Opinion

By Yarrow Brown | June 14, 2025

Northwest Lower Michigan is a place of incredible natural beauty, vibrant communities, and economic opportunity. Yet, for many who live and work here—or hope to—the region’s lack of attainable housing seems like an insurmountable barrier. Addressing this crisis requires innovative solutions, and a flexible access to capital for housing development is precisely the kind of tool the region can use for decades to make meaningful progress.

In 2023, Housing North commissioned a Housing Needs Assessment for northwest Lower Michigan. The report revealed a staggering reality: our region must build over 31,000 homes by 2027 to meet demand. Of these, 22,000 are needed for households earning less than 120 percent of the Area Median Income (AMI).

That’s the nurse, the teacher, the restaurant manager, the police officer—people whose work is essential to the fabric of our communities. Yet, these workers are often priced out of the very areas they serve, forcing long commutes or untenable housing situations.

There are many barriers to building and maintaining housing affordable to the workforce. The cost of land, labor, materials, and taxes, in addition to zoning and regulatory restrictions, all have major impacts on the housing market. However, one of the littlest known but most significant barriers to developing affordable housing is the high cost of financing.

Conventional loans often come with interest rates and terms that make it difficult for developers to build workforce attainable housing without significant subsidies. Enter the concept of a regional housing fund. Regional housing funds have not yet become widely used yet, but the few that exist are impactful models for tackling housing shortages.

By pooling resources from local governments, businesses, philanthropy, and private donors, such a fund creates a dedicated pool of capital to be used within the region with flexible terms and friendly interest rates to help finance gaps in housing projects across multiple counties. This approach allows for a dedicated set of funds to be available regionally, without competition from projects in other parts of the state.

What makes this fund particularly powerful is its flexibility. Unlike traditional financing, a regional housing fund can be structured to adapt to the specific needs of individual housing projects.

For example, it could provide financing for land acquisition, construction, rehabilitation, or even the preservation of existing affordable housing. By offering loans at very low interest rates, these funds are consistent sources for local projects that fill gaps to remain financially viable while keeping housing costs affordable for residents.

A low-interest loan can make a critical difference in the financial viability of a housing project by lowering monthly debt payments, freeing up resources for construction, and ensuring units can be rented or sold at prices within reach of local workers. Over time, as loans are repaid, the fund replenishes itself, creating a sustainable model for long-term housing development.

The focus is not on maximizing returns for the fund but on getting housing projects completed—and being around year after year to ensure consistent access to capital for our region.

Housing North has demonstrated the potential of this approach through its pilot projects. In 2023, the organization launched the Rapid Response Housing Fund (RRHF) in Leelanau County, securing two affordable housing units that would otherwise have been lost to short-term rentals or market-rate conversions. The project also acquired land that can support future opportunities designated for workforce housing, in partnership with a community land trust. These units will remain permanently affordable, thanks to the land trust model.

Since this was launched, Housing North has raised an additional $100,000 and are working to deploy these funds in 2025 through two different projects. This success is just the beginning. A fully realized and capitalized Rapid Response Housing Fund would build on these achievements, building low-cost capital options across the 10-county region to provide more families with secure, attainable housing options.

To address our housing crisis, we need bold, coordinated action and lasting investment. Housing North is seeking a $10 million appropriation from the State of Michigan to expand a flexible Regional Housing Fund that can grow with matching contributions from local governments, businesses, and philanthropy.

This initial funding will jumpstart a proven model, unlocking long-term capital for housing development across the region. Over 100 local leaders have already signed on in support—now we need state and regional action to follow.

The housing shortage didn’t happen overnight, and it won’t be fixed overnight. But with smart, sustained investment, we can build a future where teachers, small business owners, and essential workers can afford to live in the communities they serve.

Let’s work together—public and private sectors alike—to create housing solutions that last for decades. The time to act is now.

Yarrow Brown is the executive director of Housing North, a 10-county housing agency serving northwest Michigan.