Michigan Growth Advisors – Latest News – New Incentives to Finance Housing Development Approved by the Legislature
The Michigan Legislature recently passed arguably one of the most sweeping changes to the brownfield program since its creation in 1996. Michigan’s Brownfield Redevelopment Financing Act has long been the go-to tool for providing incentive into commercial real estate development projects involving contaminated, blighted and functionally obsolete properties. Senate Bill 129 greatly expands the incentives which are available to projects looking to build or renovate housing within the state. The bill creates a new category of eligible property “Housing property” and creates new categories of reimbursable eligible activities related to the development of housing property. With this change, any development with at least one housing unit within it can now leverage the brownfield program to provide incentives to a project.
Senate Bill 129 expands the brownfield program to allow the growth of property taxes that result from a development project to be captured and used to reimburse a developer for project costs associated with site preparation and public infrastructure improvements related to development of any housing property, including single family, multi-family and mixed-use project. Additionally, the program would be able to reimburse financing gaps associated with the development of affordable housing, among other changes.
If you are an owner or developer of housing property, or are considering acquiring or developing housing property, then these new tools should be considered for all of your projects. Our team has assisted with hundreds of brownfield projects and can help you model the potential financial value of the program for a particular project and otherwise help navigate the review and approval process. We would welcome the opportunity to discuss your project and see if we can identify an opportunity to improve the economics of a project to allow it to move forward.
Proposed Amendments to Public Act 381 | Senate Bill No. 129
- Brownfield eligible property is expanded to include “Housing Property,” : property on which one or more units of residential housing are proposed to be constructed or rehabilitated and located in a mixed-use project, would become brownfield eligible property. Housing property does not otherwise need to be contaminated, blighted or functionally obsolete as is the case under current law.
- The definition of “eligible activity” would expand to include:
- Housing development activities:
- Reimbursement to owners of rental housing for qualified rehabilitation
- Costs of demolition and renovation of existing buildings for projects supporting income qualified households
- Temporary housing relocation costs for income qualified households for up to 1 year
- Acquisition cost for blighted or obsolete rental units in support of income qualified households
- Reimbursement to developers to fill financing gaps associated with the development of housing units priced for income qualified households
- Site preparation in support of income qualified household developments.
- Public infrastructure improvements for any housing type, including market rate developments.
- Housing development activities:
- Projects utilizing a Payment in Lieu of Taxes (PILOT) – typically, Low Income Housing Tax Credit projects – can now capture the PILOT payment under a brownfield plan to reimburse eligible project costs.
Written by: Joe Agostinelli, Michigan Growth Advisors Founder
email@example.com | 269.567.0669
Joe Agostinelli, founder of Michigan Growth Advisors brings a fully integrated perspective on the current state of today’s economic development landscape.
Joe’s expertise has touched every aspect of economic development in Michigan, including legislative policy, partnering with state and regional economic development organizations, private real estate development and consulting on all the above within the ever-evolving market. He understands the growing pains businesses have today and knows how to equip them with the right tools at the right time to ensure long-term success.
With the longstanding recognition, proficiency and horsepower of Michigan law firm, Miller Johnson, Joe and the Michigan Growth Advisors team are here to support new and prospective clients, and cater to existing publicly incentivized Miller Johnson clients to bridge the gap between a project’s cost and financial viability.
About Michigan Growth Advisors
Michigan Growth Advisors, a subsidiary of the award-winning law firm, Miller Johnson, delivers economic incentive solutions available through local, state, and federal programs. With a collaborative approach to incentive procurement, Michigan Growth Advisors proactively identifies and secures public incentives available to meet specific client needs. More information about Michigan Growth Advisors can be found here: https://michigangrowthadvisors.com/