A bipartisan housing tax credit package sponsored by Ann Arbor Senator Jeff Irwin cleared a key Michigan Senate committee on Tuesday, advancing what the Democrat called one of the few major legislative achievements still possible in a divided statehouse.
The three-bill package would create a state-level low-income housing tax credit administered by the Michigan State Housing Development Authority. The credits would supplement the federal low-income housing tax credit, the primary financing tool for affordable housing development across the state.
A tax credit instead of a budget line
The proposal would set aside $100 million in 2027 to fund the credits, according to a Senate Fiscal Agency analysis. The legislation mirrors the "build, baby, build" approach that Governor Gretchen Whitmer endorsed in her State of the State address earlier this year.
"This is one of the few ideas that's at the intersection of important and possible here in Lansing," Irwin said.
Irwin, who chairs the Senate Housing and Human Services Committee, argued that a tax credit is politically easier to pass than a direct budget appropriation.
"I do think that a tax credit is always an easier decision than a budget line item for various reasons," he said. "But I think what's really driving this is just that all legislators are hearing from their residents that housing affordability is a crucial issue."
Opposition from the right
The committee vote was not unanimous. Senator Jonathan Lindsey (R-Coldwater) cast the sole "no" vote, arguing that the tax credit would benefit a small number of developers without addressing Michigan's broader housing affordability crisis.
Lindsey's objection highlights the tension in Lansing between targeted development incentives and broader structural reform. The Senate Fiscal Agency analysis confirmed the $100 million cost, meaning the credits would reduce state tax revenue available for other programs.
What happens next
The bills now move to the full Senate floor for consideration. If the Senate passes the package, it would go to the House, where the Republican majority could advance, amend, or block the measure.
The housing tax credit comes as Michigan lawmakers face a tightening budget outlook and limited legislative time remaining in the current session. Irwin's framing of the bill as both important and achievable suggests he sees a path through a divided legislature.
For Ann Arbor and other Michigan communities grappling with rising housing costs, the credit represents a potential tool to incentivize more affordable units. Whether it survives the full legislative process remains to be seen.
"All legislators are hearing from their residents that housing affordability is a crucial issue," Irwin said.
That message from constituents is the engine behind the push. The question now is whether the math works in Lansing.