As ARP money expires, officials look to millage to keep program going

Ingham County commissioners earmarked $9 million in American Rescue Plan funds to add more “affordable, accessible and sustainable housing” through the Ingham County Housing Trust Fund in April 2022.

Some of those federal dollars were used for new-build, single-family home projects, including a pair underway in south Lansing at 2101 Reo Road and 4512 Ingham St., plus seven more in various stages throughout the city. They also helped boost partner organizations like the Eastside Community Action Center, which uses those funds to rehab and rebuild old homes in and near the Potter-Walsh Neighborhood.

With those ARP dollars set to expire in 2026, Ingham County commissioners voted 11-3 on June 25 to place a Housing and Homeless Millage on the Nov. 5 ballot to maintain the county’s housing initiatives.

If passed, it would increase local property taxes by 50 cents per $1,000 of taxable value through 2027. The county expects to raise an additional $5,618,512 in the first calendar year of the increase.

According to the ballot language, the money raised would be used “for the purposes of expanding and improving the quality of housing available to low- and moderate-income families and to prevent and reduce homelessness.” That includes restoring or repairing “detrimental housing conditions” in existing properties throughout the county.

Ingham County Treasurer Alan Fox, who helped craft the proposal, said the ballot language was intentionally written to allow more flexibility in how the millage funds could be spent.

“The county had a health services millage that was adopted just before Obamacare. It was intended to essentially deal with uninsured people, but that millage was so narrowly drawn that the county had millions and millions of dollars sitting there that it wasn’t allowed to spend on anything except providing Obamacare,” Fox explained.

“We learned from that that if you have an issue of overwhelming concern — and housing is comparable to health coverage and health insurance in that manner — that drawing a millage narrowly risks putting us in a spot where you’re taxing people but not able to do anything with the money,” he added.

Fox noted that the millage funds would be spent at the discretion of the Ingham County Board of Commissioners, “with the advice” of the Housing Trust Fund’s board. The fund was created to administer $9 million in ARP money for affordable housing. Its board was expanded this summer from seven to 11 members “to include more points of view,” Fox said.

“We want the Board of Commissioners to be able to respond to not just the circumstances as they are today, but the circumstances as they are a few years from now, which may be completely different,” Fox said. 

He said the money it would raise could be used to bolster existing “funding stacks” associated with existing project proposals that require additional funds to get off the ground.

“I’m not worried about running out of projects,” he said, noting that the county has plenty of submitted proposals. “I’m more worried about figuring out how best to prioritize them.”

Fox said the goal should be to select proposals with “the most short-term impact,” which he described as “projects that are ready to get going, where the thought has already been put into it, the permits are already drawn or close to being drawn and the neighborhood’s already been consulted.”

“There are plenty of those around,” he said.

Some Trust Fund money has also been spent on multi-tenant builds, including $1.5 million towards a 76-unit, mixed-use apartment complex at the former Walter French School in Lansing, Another $500,000 went into the Pointe West Condominiums in the 1200 block of Saginaw Street, which will hit the market this December with up to $30,000 in down-payment assistance available for buyers.

Ingham County Land Bank properties like the old Pleasant Grove School, old Leslie High School and the RC Bottling Plant could house similar projects, Fox said.

The American Rescue Plan, a federal program, is paying for construction of this single-family house at 4512 Ingham St. in south Lansing. With ARP …

Eric Schertzing, who served as county treasurer for 21 years through 2022, is another prominent supporter of the millage increase. Because Ingham County doesn’t impose its own sales tax, he said, millage proposals are a particularly important funding source.

“The public finance system in Michigan is, at best, suboptimal. It’s very limited in the ways that local governments can raise money. Local income taxes are only in certain cities, so county finances are typically more stable because they’re more diverse,” he said.

Schertzing, now the executive director of the Michigan Association of Land Banks, cited the county’s Land Bank and Housing Trust Fund as a pair of pivotal tools that have helped the county make big strides in how it addresses housing and homelessness. He said the funds raised through the proposed millage increase would bolster these initiatives in both the short and long term.

“Local millage dollars are very flexible for leveraging other dollars. So, the hope is that the voters will embrace the millage so that there are additional resources in that housing space that we can then leverage with other federal and state funds,” Schertzing said.

Fox sees the need to address homelessness and housing affordability in the county as “self-evident.” But some Republican Ingham County commissioners feared the millage increase would only add to some of their constituents’ financial struggles.

Prior to the June vote to place the question on the ballot, Commissioner Monica Schafer said she planned to vote against the motion out of concern that her constituents were already overburdened by taxes and inflation. Commissioner Karla Ruest echoed Schafer, adding that she believed the millage would raise the rent for most residents. Commissioner Randy Maiville cited fears that it would also encourage businesses and developments to relocate outside the county.

Fox dismissed their concerns.

“We’re not going to be plucking it all down in one place and having a big ribbon cutting,” Fox said. “We’re going to be trying to spread it to organizations and projects that have long-term benefits.”