Clash of the Titans! King Kong versus Godzilla! The irresistible force meets the immovable object. Affordability vs Local Control. In Lansing we’re seeing the Battle of the Giants play out. The issue is “Affordable Housing,” a key component in the “Abundance Agenda” championed by progressive columnist Ezra Klein of The New York Times.
Affordable housing is something that everybody wants, like getting to Heaven. But how do you do it? That’s where the details are, and details are where the devil is, depending who you talk to.
In one corner are the Affordability people: proponents of a package of state legislation in Michigan’s capital city. This would be House Bills 5529—32, and 5581—85. Taken together, they seek to encourage building more ‘affordable’ housing by removing local impediments to construction of cheaper residences: city, village, and township zoning ordinances. Every community in Michigan has zoning requirements.
These rules limit what housing can be built, and getting rid of them would allow more ‘affordable’ residences to be built, according to the Affordability folks. They have a lot of money, support, and lobbying power on their side. Their goal is to ‘pre-empt’ local zoning power and centralize it in Lansing. This is the irresistible force.
And the immovable object? Just about every local elected official in the state. The Local Control folks. The Michigan Municipal League, Michigan Townships Association, and Michigan Association of Counties all are adamantly against this legislation. Why? Because planning and zoning decisions have always been made at the local level.
These pesky local rules (that the Affordability forces want to crush) are made by folks right in the community, who can be easily accessed, talked to, and fired by their constituents. Most every local unit of government in Michigan has its own master plan to guide its zoning rules. Grabbing this power and taking it up to Lansing makes these decisions an inside-the-beltway job, subject to big money and big influence.
Who’s the most powerful lobbyist in Michigan? An elected official from your district, particularly a state legislator! And these Local Control folks are out in force. So who’s going to win? This round? Lansing Godzilla or Local King Kong? Any Representative or Senator who wants to survive the next election will probably defer to King Kong. But that doesn’t mean Godzilla will just slink away.
Former state Rep. Chuck Moss (R-Birmingham), an attorney and former Detroit News columnist, pointed out in his Oakland Co. cable show that, here in Michigan, we have one of the easiest Constitutional Amendment processes in the country. Time and time again we’ve seen groups that can’t get things approved by the Legislature come up with a new strategy. They form an NGO/Non-profit with a sweet name like “Citizens,” “Families,” “Kids,” or “Puppies” in it. Godzilla will regroup on Monster Island and come back for a return match as “Michigan Citizens For Families, Kids, and Puppies,” as a ballot initiative to amend the Constitution and get signatures for the “Home For Christmas” proposed Amendment.
There’s more than one way to skin a cat—or stomp on Lansing.
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The Green Party, Libertarian Party, and Republicans are all champions of local control of just about everything – the Democratic Party is the political group that supports strong centralized power at the federal and state levels.
Chuck Moss is a former mayor of Birmingham – which has some of the most restrictive and complicated rules on housing, zoning and building of anywhere in the State of Michigan. he also served in the Michigan Legislature as chair of the House Appropriations Committee.
No suburban community wants cheap housing projects that will attract poor people and lower property values for existing residents. Especially if you reside in affluent communities such as Birmingham.
Cheap housing is equated in the public’s mind with high crime and urban decay – creating depressed property values. Ol’ Chuck knows the score on this phenomenon better than anyone.
Come on, Leanne — you are smarter than that. Republicans are in favor of local control until they are in power and a locality does something they don’t like.
Interesting article, Bill. As I gave blood this morning (power red), the Red Cross strongly encouraged me not to consume caffeine and alcohol. If my response seems a bit rambling, blame blood loss and the Red Cross. I apologize ahead of time. There are multiple causes of housing affordability and more than enough sources to blame for it. So here goes.
HOUSES: A long time ago, when I was a wee lad, the average houses was smaller than today. The family home in Detroit was about 1000 sq. ft., with a basement. The house we had when we moved to Plymouth to be closer to dad’s workplace in 1967 was a smidgen more than 1200 sq. ft. (it had a family room). It also had a basement. Today, the average house runs about 2200 – 2300 sq. ft. If you more than double the size of the average house, costs will rise. But the costs are not solely related to house size. Gone are linoleum floors and Formica countertops, replaced with more expensive products. Lots tend to be a bit larger – especially in many suburbs – and that costs money. SOLUTION? If you want cheaper houses, the old school starter home – which for many was a family home not a starter home – is the way to go. The house is where you raise your family. It is NOT an investment opportunity.
HOUSING COSTS: Housing costs have soared well above the rate of inflation one would normally expect even with doubling the size of the average house. There are multiple sources of blame. Here are some:
It used to be a rule that you should only spend 2.5 times your annual income – without overtime – on your home. This kept costs down. Remember Murphy’s Law. And remember that Mr. Murphy was an optimist. Spending more than that on your home gives you less room for financial error. And that does not benefit you.
Politically, the “ownership society” with its attendant liar loans and willy-nilly issuance of mortgages during the Clinton Administration created a bubble that blew up during Bush the Younger’s second term. Lots of homes went into default and the government wound up with lots of houses they did not want and wanted to get rid of. Quickly. During the Obama Administration, it seemed they felt that home ownership itself was the problem. They seemed to prefer renters. Shades of the World Economic Forum telling us we will own nothing and be happy. Their solution was to sell many of these houses to private equity, hedge funds and other masturbators of money to get the liabilities off the Federal books. They want to make a profit so if the house is sold, it sells for a higher price. And this is made worse with many houses now being built by large companies to specifically rent. High housing costs are part of a plan. And it seems to be working.
Leanne is right. Especially here in Michigan. Here, local governments like bigger houses. They have a higher SEV and that means high tax revenues. Governments like money. Walk or drive through my hometown of Plymouth and you will see all these “McMansions” where smaller family homes used to be. Working stiffs can’t afford those. There seems to be a sense that the governments don’t care. Big houses = big tax revenue. That matters more to them.
And this creates another pathology. Those who can afford those houses really don’t want lesser mortals moving near them. Again, picking on my hometown, the Christian Science congregation has a church building that the congregation can no longer run. The congregation is small, the costs are daunting, and they needed a solution. And they thought they found one. Brookside Development. They planned on building something called Champion PUD. This would have resulted in 17 townhouses and three houses that would be called “detached condos”. The hue and cry over this development was something to behold. Boatloads of “Stop Champion PUD” signs sprouted all over the west side of Plymouth like weeds. They objected to the height (2 ½ stories) as too tall. Never mind the Arbor Health Building is that tall and it is one softball toss east of the Christian Science church. The school board building is only two, maybe three softball tosses across the street from the Christian Science church. And don’t get me started on the “carpocalypse” the 20 families will cause. As long as those with lots of money wish to separate themselves from the rest of us, housing costs will remain high.
And in Michigan, schools are kind of happy. Rental properties are a boon to the schools, 18 mills vs. 6 mills (unless you’re a member of the Federal Reserve). They aren’t complaining.
Economically, part of the problem is that wages for the average Joe and Jill have not kept up. Free trade hollowed out our manufacturing base and the generally good paying jobs they provided. All this mostly benefited large corporations, shareholders and the stock market. That’s why you rent. You can’t afford to buy.
And socially, this destroys communities. Renters tend to move more often than homeowners. This does not build communities, but it does create a caste of mobile serfs, the problem that Prof. Joel Kotkin has been warning us about.
As for local control, it’s a tool used by those for their own benefit and discarded when it does not help them. When it’s in their favor, it’s all local control. When it isn’t, it’s not. In Washington State, Democrats want a state commission to replace sheriffs – elected by the people – that they don’t like. So much for preserving democracy. The GOP in Michigan ignored local control – sometimes – during the Engler and Snyder administrations when ignoring it benefited business interests they wanted to help or cities they wanted to punish. Democrats like local control for prosecutorial discretion, “sanctuary” policies in not helping deal with the illegal aliens that the Biden administration let in and other stuff. I do find it odd that they resort to using concepts from medieval Catholic Church, about the only thing from the Catholic Church they like, to justify actions that approach the threshold of justifying use of the Insurrection Act. Apparently local control is in the eye of the beholder.
Happy spring to the TBR family!
All in all, this bill package creates the opportunity for an interesting debate on the merits of local governmental control vs. private property rights, something to be celebrated by those who support free market economics.
In effect, this legislation proposes a return of property rights to the property owner by minimizing local governments influence on how one can use their property.
After years of observing a high level of unreasonable input and scrutiny that builders and developers are subject to by local boards and commissions, it is refreshing to see an effort to level the playing field.
The affordability of housing is a multi-faceted and complex problem. I have identified over 20 different factors effecting the cost of housing and I am sure that there are many more. A community’s standards regarding the density of housing in their community is one area for consideration regarding the housing issue.
While the reforms suggested by this legislation may seem sweeping, reviewing standards for lots sizes, setback requirements, dwelling space sizes and other land use issues are an important conversation to have.
A one size fits all approach may not be appropriate for all areas of an established community, updating standards to allowing the market to provide more options to satisfy demand is a worthwhile consideration.
As a Realtor, do you think your industry has overemphasized the role of housing as a core middle class asset?
Do you think all the various tax advantages bestowed on real estate have jumped the shark, raising home prices faster than incomes?
Realtor? I thought he was a film producer? Recall Star Wars?
George S. Lucas is an experienced real estate broker out of Sawyer. Ran in the 38th District against Kevin Whiteford in the 2022 and 2024 Republican primaries. Well known and respected along the Lakeshore.
George Lucas says
(Edit)Owning a home does give one the opportunity to build equity/wealth, but I believe that looking at one’s home as an investment has been oversold. Personally, when factoring-in the costs of insurance, maintenance, property taxes, mortgage interest, improvements, etc., owning a home can also be viewed as a liability.
I’d venture to say that in most cases, homeownership provides a hedge against inflation rather than an investment opportunity, assuming that the market doesn’t tank. Better than renting for most people, but an investment in a S & P 500 index fund, for example, is probably a better place to park one’s money if one is looking for a true investment.
In regard to taxes, I personally prefer a low, broad, flat income tax without any deductions. Not a lot of opportunity for social engineering or lobbying with that approach.
The $500,000 for a couple/$250,000 for an individual tax exemption for the capital gains tax on the “profit” from the sale of a primary home is an interesting question. After factoring-in the costs of ownership and inflation, applying the term “profit” to an unadjusted capital gain is questionable at best.
If various and sundry people did not attempt a do-it-yourself colonoscopy by placing their head in their rectum, this issue would be non-existent. Every major core city in Michigan has seen bulldozers running rampant leaving blocks of desolation where solidly built houses once stood. Most of these houses would have been suitable candidates for upgrading at a fraction of the cost of a new house. In 1990 I did just that. The purchase price of the house and cost for improvements totaled less than half of what it would cost to build the same house from the ground up. The house, built in 1935, still stands.
All of the funds spent (including kickbacks, bribes, gifts, etc.) on demolishing neighborhoods could have been better spent on rehabbing houses and keeping costs of housing reasonable. Another benefit of keeping these neighborhoods intact is the closeness to goods and services, most of which are on the bus line. Not having to install utilities, roads, water, sewer, etc., is also a benefit in keeping existing housing in good repair. It also enhances the tax base.
The ‘solution’ to this non-existent ‘problem’ is obvious. Stop tearing down houses; instead rehabilitate those houses for a fraction of the cost of building a new house. Housing magically becomes affordable.
About two weeks ago, Rep. Kristian Grant gave a presentation describing this package of bills. Yours truly proposed the above-described concept, which apparently had not been thought of. We’ll see if the idea makes its way into the package. Much more practical to spend $4,500 towards upgrading a house than buying a new coffee maker.
To give one an idea about the explosion of prices for small homes, I saw an old 1,000 square foot home in Hazel Park recently sell in the Nine Mile and John R Rd. area for $299,000.
I saw another several blocks away that was purchased for $26,500 in 2011, be appraised today at $167,500.
Lower middle class families are being priced out of home ownership. A number of people in that area now live underneath the rotting old Eight Mile Road/I-75 overpass. The lucky ones have a house to rent from a landlord at exorbitant rental rates.
Thanks, Bill, for promoting a great discussion on this topic. I appreciated reading each of the comments. It’s interesting to learn how different people interpret this issue.
These affordability bills are (in my opinion) ridiculous. I have a different take on what has happened (in part) to affordability, and I’ll apologize for hijacking your argument and turning it into my own argument.
Upon retirement from full-time employment, we moved to the home we purchased a few years earlier. We moved there to enjoy the immediate surroundings and nearby neighborhoods that resembled the character we wanted. It’s nice, big, and open. That’s what we wanted.
We were careful to consider any open or vacant land in the area, and what that zoning meant in terms of future development. In terms of appearance and other amenities, the HOA that oversees our neighborhood does a great job for us.
I’ve been in government for 38 years, and I know things change – including zoning. Typically, approved zoning changes might move fractionally to a side, but wholesale changes immediately adjacent to residential are infrequent. And that’s a good thing.
The referenced legislative bill proposals suggest dramatic changes which – if mandated – would certainly change the surroundings and character of nearby properties. And then those who live nearby would be forced to accept it. Builders must be salivating with excitement, but I don’t like it.
We’ve owned a vacation home on Houghton Lake for nearly 20 years. We applied certain parameters to our search criteria before we made the purchase: paved roads, full time fire and police, a pleasant neighborhood not near a business district, good mobile phone reception, and a few other items. Then we found it, we invested a lot of money into it, and we pay high non-homestead taxes on it.
We were 5 lots away on both sides from tiny, 8 foot wide public access areas, we were about 1.5 miles away from a motel, and only about the same distance from the commercial activity of local shops and stores. It was a great neighborhood, but it has changed over the past decade.
I respect people, property, and individual rights. I’m also a rule-follower, and unlike some folks, I like the laws that contribute to a civilized society and to preserve order.
I’ll admit I like to know our neighbors and to enjoy those friendships. I’m not fond of weekend warrior clans that are not as invested as we are, and while others may say that sounds selfish, I’m ok with that.
Here’s the hijack:
Things were good. Then Short Term Rentals (STR’s) became a thing. It’s no longer as good, STR’s infringe on traditional neighborhoods, and they have seemingly eliminated the chance for average people to actually own a cottage.
A house or cottage goes for sale, and there’s an STR operating in the blink of an eye. Neighbors? Gone. The long term renters down the street? Gone. We now have 5 STR’s within 300 feet of both sides of our cottage. When did existing zoning become so non-important?
The affordability for a family to own a home or to lease one for a year or more has vanished. And not just in resort areas. Suburban neighborhoods are seeing the same thing, and the STR craze is responsible for some of that.
The “Wild West” no real rules of the STR intrusion into residential neighborhoods is a mess. Governments choose to ignore these intrusions in the name of “new money.” For some reason, heritage businesses (motels and hotels) are being discarded in favor of stuffing two or more families into a single family residence for a week or a weekend.
We now have numerous motels within residentially zoned neighborhoods, new neighbors every week, a strain on infrastructure and manpower, and much of it in the name of property rights.
I developed my own “white paper” on the ills associated with STR’s in residential neighborhoods. Aside from the obvious problems, there’s also other issues that municipalities choose to ignore, and I share my thoughts with those who ask.
I do not support ANY STR’s within residential neighborhoods, and became aware of a recent case: Timber Lake Drive Prop Owners’ Association v Gribi, unpublished opinion of the Court of Appeals, issued September 18, 2025 (Docket No. 369520), 2025 WL 2682064, where the Michigan Court of Appeals held that a long-term rental violated a HOA’s commercial use restriction. This was news to me, and I’m very pleased to have learned it.
This is significant for owners of property within an HOA in Michigan. If the By Laws restrict commercial activity involving occupancy, those By Laws prohibit STR’s – AND long-term rentals. But not everyone lives in an HOA community.
There are more than 10,000 identified STR properties within Michigan neighborhoods. There are many more that are not identified as such. All of those represent lost opportunities for affordable housing.
Some states and some communities across the country have recognized STR’s as an issue that deserved legislative attention. Far more states and communities – including Michigan and communities within it – choose to ignore existing zoning and to ignore real STR regulations. And instead they offer the disruptive insanity associated with HB 5529-32, and HB 5581-85.
Perhaps if local, county, and state politicians chose to focus on reining in STR’s, some level of housing affordability, and a different level of respect for existing property owners might return. I’m not holding my breath.
Another interesting topic. The challenge here is a clash between two private property rights, the right to rent one’s property vs. the neighbor’s right to the quiet enjoyment of their property.
I believe that controlling the level of occupancy/the intensity of use of an STR is a giant step towards achieving the desired balance as occupancy level has a direct impact on the top complaints emanating from STR’s, which are excessive noise, garbage and parking. Further, limiting occupancy levels erodes the pricing power of a property which has a direct negative impact on the profitability of some STR’s. A nice way to cull the heard while protecting both property rights.
In a recent study of Michigan resort communities regarding STR’s impact on property values, the conclusion was that even if all STR’s were eliminated, the values would remain high as those properties would be purchased as vacation homes or homes for wealthy retirees. As I live and trade in a resort community, I believe this to be true. I’m not sure how STR’s effect property values in year-round communities as I have no experience in that type of a market.
Categorizing STR’s as a commercial activity is an interesting approach. I suppose that it works up to the point where someone realizes that by definition, a short-term rental and a long-term rental are both commercial activities. That would be an interesting court case.
The most recent bill at the state level regarding STR’s failed in last session. It was deeply flawed as its key characteristics were to create a new bureaucracy and create a new tax, but to do nothing to address the most common issues associated with STR’s.
My guess is that there will not be any meaningful legislation regarding STR’s at the state level in the near future, so each community will need to address this topic individually. Local control?
Chikaming Township in Berrien County just revised their ordinance regarding STR’s and I think that they did a decent job of trying to achieve balance on this matter. Some of the key points were:
– Capping the total number of STR’s in the township.
– Establishing annual fees that are significant enough to support a meaningful enforcement effort.
– Limited occupancy to one person per 50 square feet in a legal bedroom.
– Requiring that all non-rental guests vacate the property by 10:00 PM.
One can read the ordinance online at chikamingtownship.org.
From the standpoint of transparency, even though I am a licensed real estate broker and have studied this issue, beyond protecting the two aforementioned private property rights, I am indifferent on this topic.