Sen. Irwin's Affordable Housing Tax Credit Bill Heads to Whitmer's Desk — What It Means for Ann Arbor

Affordable-housing projects do not get built on legislative votes alone; they need enough financing to reach construction. Senate Bill 966, sponsored by State Sen. Jeff Irwin, has cleared the Michigan Legislature and is awaiting Gov. Gretchen Whitmer's signature. For Ann Arbor and Washtenaw County, the bill could give developers another way to close the funding gaps that can stop a project before construction begins.

Irwin represents Michigan Senate District 15, which includes parts of Ann Arbor along with Saline, Ypsilanti, Manchester, Milan and other Washtenaw County townships. His bill would establish the Michigan Housing Opportunity Credit, a state tax-credit program meant to work alongside the federal Low Income Housing Tax Credit and spur more affordable development.

State Sen. Jeff Irwin said, "Housing costs are crippling family budgets and making it harder for young people to find a future in our state."

The measure is part of a comprehensive affordable housing package that also includes House Bills 5806 and 5807.

The Michigan State Housing Development Authority would administer the program. Its annual cap would begin at $42 million and increase each year with the Consumer Price Index, generating roughly $160 million in tax-credit equity annually. The program is expected to create up to 4,000 affordable units per year across Michigan.

For projects using 4% federal Low Income Housing Tax Credits, the state credit provides additional equity to make developments financially viable that otherwise could not secure sufficient funding. For 9% federal LIHTC projects, it stretches limited federal resources, enabling more units or deeper affordability. At least 45% of the Housing Opportunity Tax Credit is reserved for 4% federal LIHTC projects.

All housing created under the program must remain affordable for at least 30 years. MSHDA mirrors federal LIHTC administrative elements to reduce bureaucracy and costs, with applications accepted concurrently with existing LIHTC programs. The state credit has a six-year credit period, shorter than the federal program's ten-year period. Applications will be accepted in the first and third quarters annually, mirroring federal 9% LIHTC cycles. The legislation also includes preferences for projects that use made-in-Michigan materials.

State Sen. Jeff Irwin said the goal is "More housing, leading to more options and affordability."

Whitmer has endorsed using tax credits to support affordable housing and indicated support for the legislation. Both Whitmer and Irwin are term-limited, with their current terms ending January 1, 2027 — the same date the first award cycle for the Housing Opportunity Tax Credit begins.