Housing Incentives Are a Reality Check, Not a Handout

Guest Opinion

By Kent Wood | Feb. 14, 2026

No one disputes that housing in northwest Michigan has become expensive—uncomfortably so for many families who live and work here year-round. Home prices are rising faster than inflation. Construction costs remain elevated. Labor shortages persist.

These are not abstract trends; they show up in longer commutes, vacant job postings, overcrowded homes, and young people leaving the region entirely.

What is often lost in the debate, however, is how we respond to those realities—and whether we are willing to use practical tools to keep our communities functioning.

Housing incentives are frequently portrayed as subsidies we “can’t afford” or as an unsustainable experiment in social engineering. In truth, they are a response to a market that no longer produces housing aligned with local wages—and one that, left alone, will continue to drift further out of reach.

The math matters. Building housing today costs far more than it did even five years ago. Materials, labor, land, infrastructure, and financing have all risen sharply. At the same time, wages in education, health care, hospitality, manufacturing, public safety, and local government have not kept pace with housing prices. That gap is real, persistent, and well documented.

Incentives exist to bridge that gap—not to eliminate it entirely, but to narrow it enough that housing for working households becomes feasible. Without them, many developments simply will not happen, or they will happen only at price points that serve a narrow slice of the market (think large homes on large tracts of land or condos and apartments that serve as high-price seasonal homes or vacation units).

That is not ideology. It is economics.

Importantly, housing incentives are not blank checks. They are conditional, time-limited agreements that exchange public benefit for public support. Projects receiving incentives are typically required to restrict rents or sale prices, limit eligibility to households earning within defined income ranges, prohibit short-term rentals, and maintain affordability for a set period of time. If those commitments are not met, the incentive goes away.

That is a policy choice rooted in accountability.

It is the same concept as the Principal Residence Exemption (formerly the Homestead Exemption), which exempts a primary residence from the portion of local property taxes that fund school operations. It is also similar to deductions and credits in the state and federal income tax systems. At its core, the legislature has determined that these investments provide public value and are worth more than the taxes that would otherwise be collected.

Tax incentives are not meant to replace the market—they are meant to correct for its blind spots.

In a region shaped by seasonal demand, tourism-driven investment, and limited developable land, the market naturally favors higher-end housing. The result is predictable: fewer options for the people who staff hospitals, teach in schools, maintain infrastructure, and keep local businesses running.

Unfortunately, doing nothing does not preserve affordability. It accelerates displacement.

The consequences of inaction are already visible. Employers struggle to fill positions. Longtime residents are priced out of their communities. Young people leave and do not return—or worse, return and have to leave again. Emergency services, schools, churches, and small businesses feel the strain.

Housing is no longer a side issue; it is a foundational one that affects economic stability, public safety, and community cohesion.

Northwest Michigan will continue to be a desirable place to live. That is not going to change. The question is whether we plan for that growth intentionally or allow it to happen in a way that excludes the very people who make our communities livable.

Time will tell whether specific policies need adjustment. We believe that is how good governance and public policy works. Decisions should be informed by data, evaluated regularly, and refined as conditions change. But dismissing incentives outright ignores both the scale of the challenge and the cost of inaction.

Housing is not just a private concern. It is infrastructure. And investing in infrastructure—carefully, transparently, and with clear expectations—is how communities protect their future.

Northwest Michigan is not trying to be something it isn’t. It is trying to remain a place where people who contribute here can continue to live here year-round. Housing incentives are just one of the tools helping us do exactly that.

Kent Wood is the policy advisor for Housing North, a 10-county housing agency serving northwest Michigan.