Michigan gets $8 million for affordable housing

Tax credits can be a powerful tool in the fight for affordable housing. The Michigan State Housing Development Authority (MSHDA) approved more than $8 million in federal Low Income Housing Tax Credits on Wednesday, June 16.

The credits are designed to stimulate the creation of affordable housing by giving private investors incentive to promote and develop affordable housing projects. According to the MSHDA, every dollar in tax credits saves a development more than 10 dollars in rental and other costs.

A development is eligible for the credits if the rental housing has at least 20 percent of its units for households with incomes at or below 50 percent of the area median, or 40 percent of its units reserved for households with incomes at or below 60 percent of the area median.

Not only do the credits help affordable housing, they also directly affect the job market. More than 1160 jobs will be created because of the credits, according to the MSHDA.

Credits can also be sold, if the proceeds from the sale are applied to lower the rent of the rental units.

The program is so popular that usually only one in three applications is approved for the program. The 2004 credits were awarded to 674 units of housing across the state, in Wayne, Van Buren, Tuscola, Muskegon, Mecosta, Berrien, Genesee, Houghton and Kalamazoo counties.

Since the program’s inception in 1987, more than $100 million in housing credits have been awarded in Michigan, benefiting more than 28,000 rental units.