LANSING — Jan Munk was drawn to her eastside neighborhood more than four decades ago by its diversity and affordability.
The neighborhood, just a mile and a half from the heart of downtown, isn’t as nice as it once was, she says, but she’s hoping that a new initiative to rehab nine older homes bought for possible expansion by Sparrow Hospital but recently donated to nonprofits will help revitalize streets around her home.
Habitat for Humanity Capital Region and the Ingham County Land Bank will renovate the homes.
“Houses in our neighborhood are over $200,000, that’s never happened here,” Munk said. “I know I could sell our house. But what kind of place could you move to? My kids grew up here and I’d like to stay.”
Michigan’s population is stagnant, and that isn’t likely to change unless the state’s housing crisis is addressed, experts say. In the Lansing region alone, officials estimate 7,500 housing units need to be built soon just to keep up with the demand. The pace of rehabilitation of the region’s older housing stock needs to quicken as well.
The lack of housing stock has sent home prices spiraling upward, at time when inflation has made rehabbing older homes expensive and, in some cases, nearly cost prohibitive.
It’s a real-world problem officials are grappling with now. With several major employers set to open in the next year — including an Ultium battery plant and Amazon fulfillment center in Delta Township — the Lansing area is expecting to get more new jobs in a shorter time period than it has in years.
But where those new workers will live could be a big problem, said Ken Fletcher, Delta Township’s supervisor.
There are just over 100 homes on the market with price points under $100,000, largely in Lansing, but experts caution many of those homes could need significant, expensive repairs. There’s another 111 priced between $100,000 and $200,000, and more than 80 of those are in Ingham County, primarily in Lansing. For residents wanting to buy homes in Eaton and Clinton counties, or the more affluent areas of Ingham County, the vast majority of homes will be priced between $200,000 and $400,000 or more.
The Amazon and Ultium developments are expected to create more than 2,200 jobs by the end of 2025.
There aren’t enough homes
Like the rest of Michigan, the low supply of quality housing is a big driver of increased housing costs, said Hillary Doe, Michigan’s chief growth officer.
She cited Federal Reserve Bank data, from Chicago’s branch, showing that Michigan needs to figure out housing before it can grow. That’s going to take fixing up old homes, building new single family homes and standing up new apartment buildings, Doe said. The downtown Lansing area added at least 600 housing units in the last two and a half years with hundreds more that are under construction.
There simply aren’t enough housing units, and that lack of options causes housing costs to rise, said Amy Hovey, CEO and executive director of the Michigan State Housing Development Authority, which offers programs for renters, owners and developers.
“The big issue we have in our state is supply, we don’t have enough housing to meet our needs and we can’t just build our way out of it without some incentives or subsidies,” she said.
State housing leaders announced earlier this month a new statewide grant program with $60 million to fix dilapidated homes or build new ones.
Doe came to Lansing a few days later, for a separate housing announcement for new apartments units at the REO Gateway Apartments, at Washington Avenue and Malcolm X Street, beside Interstate 496.
A fourth building at REO Gateway, that will rely on state funding, was announced. It will have two dozen new units, in addition to the complex’s 72 existing units, which started opening for lease last year.
The apartments took about a decade to build from the concept, said developer Brett Forsberg.
That timeline needs to be dramatically compressed, he said, if Michigan wants to build more housing.
How many houses do we need?
State data puts the number of new homes that need to be built at around 7,500 in Greater Lansing.
Alan Fox, Ingham County’s treasurer and a board member of the Ingham County Land Bank, said the number may be closer to 10,000, but coming anywhere close to either number would take many years and plenty of effort.
Fletcher said Delta Township has gotten serious, and creative, about opening up housing options in preparation for the township’s new employers.
The township has recently changed its ordinances to allow for more variety of homes — like smaller cottage homes and more permissive multi-family projects — and is working to expand sewer access to open development in the western parts, Fletcher said.
The township recently approved an expansion that would nearly double one of the area’s larger apartment complexes, adding another 354 units in 11 new buildings.
Developers have been more interested in apartments and multi-family units than neighborhoods of single-family homes, potentially because of the current interest and construction costs, he said.
Some of that may be changing soon.
Even as costs remain high, the number of new home permits in February was 38% higher than February 2023. That may be, in part, a one-time statistical blip because of potential new state regulations and a mild winter, said Bob Filka, CEO of the Home Builders Association of Michigan.
“There are too few housing options available and we’ve had a mild winter,” Filka said. “This, along with the potential of significant new housing costs being imposed by LARA (Michigan Department of Licensing and Regulatory Affairs) later this year, with new costly proposed code requirements, explains the acceleration we’re seeing.”
He said builders worry that sprinklers and other potential code requirements could increase costs for a single home by $20,000 or more.
Filka said regulatory and construction costs already make it “usually impossible to build a home for less than $350,000 or $400,000 and make money in the mid-Michigan market.”
Not even $15 billion would fix it
Fox said the housing shortage is a $15 billion problem, assuming 7,500 homes could be built for a likely unrealistic $200,000 each. But it would still be difficult, if not impossible, to find the people, the material and the land to do it in a reasonable time period.
The county doesn’t have billions. It does have $9 million remaining in pandemic money dedicated toward housing and county commissioners are starting to float a proposal to add a county millage to support housing.
The existing money won’t go far if the county builds homes; it’d be a few dozen houses.
So instead, Fox and county officials are planning to use it to fund educational programs, attract private investment and otherwise try to stretch the money.
Encouraging homeowners to keep up with repairs, connecting investors with local real estate options and helping renters to save up money are some of the ways the area’s housing situation will get better, he said.
And nonprofits will play a role.
It will take several years for the homes Sparrow Health System once bought for possible expansion of health facilities to be rehabbed, said Brent Taylor, executive director of Habitat for Humanity Capital Region, adding that his organization is about six months into that process. They are working on about half of the homes.
For the Sparrow homes, Taylor said it was important to renovate those as single-family homes. Having a broad mix of housing — rentals, single-family homes and others — is important, although one of the gaps in the market now is single-family homes, he said. Many of the homes Sparrow donated were split over the years into duplexes and will be converted back into large single-family homes.
The homes tick all the boxes for Josh Hamilton, who lives in the neighborhood and works for University of Michigan Health-Sparrow. As he waited for the school bus to drop off kids Monday, Hamilton said he wanted the vacant homes to be fixed up and owner-occupied so he’ll have some new neighbors soon.
“I’m excited to see it happen,” Hamilton said.
‘We can’t just build our way out of it’
The state has been in a housing crisis for years, Hovey said.
“We can’t just build our way out of it without some incentives or subsidies because of what it costs for people to build,” Hovey said. “Because what it costs to build, the average Michigander can’t afford to pay.”
The incentives and subsidies would come from a variety of state and federal programs, along with municipal and county-level programs. There are so many options that working with a local housing agency can help people find programs, Hovey said.
She said the state’s efforts at attracting jobs are running into problems because potential recruits can’t always find housing. That means companies sometimes pull out of Michigan plans or don’t consider the state due to a lack of housing.
“You cannot imagine how frustrating it is for an employee to have to pull out of a job, and say they can’t find housing so they can’t take that job,” Hovey said. “That happens across our state, including in Lansing.”
Rawley Van Fossen, Lansing’s director of economic development and planning, said the Capital Area Housing Partnership, Habitat for Humanity Capital Region, the Ingham County Land Bank and Eastside Community Action Center are four of the groups doing the work on the former Sparrow homes. Together they can probably do dozens a year, welcome relief for some but it doesn’t go far enough.
Fixing up those homes — and others like them in Lansing, which has many homes 75 years old or older — will often cost more than they will be valued at afterward, said Van Fossen, who until recently was the executive director of the Capital Area Housing Partnership.
Van Fossen said it can cost a homeowner or a property developer a few hundred thousand dollars to buy a Lansing property, get the professional planning work necessary for the renovation, get permits, hire a contractor and pay for the renovation. At the end, the home may appraise for $170,000, on a good day, he said.
“There’s a gap,” he said, acknowledging a major factor that can keep people from improving homes in Lansing. “A private developer or someone who is not mission based, they’re not going to do that. We can’t rely on our nonprofits.”
Most people will need more financial support.
He said some of the city’s best tools are education and connections to a wide variety of financial supports: Teaching real estate and financial literacy at community centers and being able to walk people through the permitting and construction process. The state offers several programs to help fund repairs, renovations, new homeowners, early-stage developers and large-scale developments.
Utility companies can also offer incentives for appliances and modernizations, Van Fossen said.
Anyone who wants to do significant renovations for themselves, or even get into developing houses or flipping them, can go to Lansing’s offices and get some help with the wide variety of programs, Van Fossen said.
To get more affordable housing, Filka suggests density like smaller lots and multi-family options like townhomes or duplexes, as well as taking advantage of state subsidies like tax credits and construction subsidies.
Contact Mike Ellis at mellis@lsj.com or 517-267-0415
LANSING — The area has a number of commercial properties for sale, some that seem to have been on the market for long periods without a buyer — despite seemingly having a lot to offer prospective buyers or tenants.
Real estate brokers say there are many reasons a piece of property can sit on the market, even if it makes those who own the property and passersby wonder what’s taking so long.
In 2019, when the Centennial Group put a 70-year-old former bus station on South Washington Avenue, its headquarters for nearly two decades, up for sale, company CEO Salvatore Durso thought a buyer would come along quickly, but that hasn’t been the case.
The insurance company, which moved to a building down the street, invested about $1.2 million in renovating the property at 511 S. Washington Ave., which had become an eyesore by the late 1990s, with broken windows and people with nowhere else to go frequently staying the night inside.
“It was a classic urban blight when we bought it,” Durso said.
Centennial Group brought the building back to life, restoring the original terrazzo tile floors and enclosing a portion of the structure where buses would park to pick up riders.
“We felt pretty strongly that we would be able to sell the property even though we weren’t using all of it,” Durso said.
Then the COVID-19 pandemic hit, changing the landscape in downtown Lansing. Downtown companies sent their workers home to work remotely. Today, filling vacant office space is still a struggle, and Centennial Group’s former home is still for sale.
It’s one of several large, visible commercial properties in the Lansing area that have been for sale for more than a year. Here’s a closer look at five of them and how real estate brokers see them being returned to use.
511 S. Washington Ave., Lansing
Centennial Group’s 10,665-square-foot, two-story building on South Washington Avenue has been on the market for four years. It has high ceilings, a front reception and lobby area, conference and training rooms, lots of open space and more than 30 parking spaces on the property, the property’s broker said.
There are pieces of history in the building’s basement, too, including signage and seating from when it was a bus station.
The property, priced at just over $1.19 million, has character, said Woodworth Commerical’s Todd Kosta, who represents the listing.
“You would never see these floors or this beautiful staircase today,” he said recently during a tour of the building. “We’ve had some people look at this and talk about restaurants or something like that.”
But Kosta said it’s likely it will be utilized as office space.
“We’re starting to see a lot of people coming back to the office,” he said.
3992 Coleman Road, East Lansing
Owner Mike Howard said the 1,830-square-foot former Tim Hortons at the corner of Coleman and Chandler roads is perfectly positioned to serve a fast-casual restaurant.
The property has been vacant for five years and on the market to buy or lease for about a year. Howard, a real estate agent with Colliers, bought it last spring, and has primarily marketed it to national companies.
Howard is in the process of working through a pending lease with a “national pizza chain,” though he declined to name them because the paperwork hasn’t been finalized. The business, which could open in six to 12 months, will utilize a pickup window on the building, he said.
“I’ve got some work to do on the outside of the building,” Howard said.
172 E. Edgewood Blvd., Lansing
The 5,286-square-foot former Hooters restaurant off East Edgewood Boulevard has been vacant since the chain closed the location in July 2019.
Kosta has been representing the property, on the market to lease, for six months. It sits on over an acre of land near Celebration Cinema Lansing & IMAX and Texas Roadhouse.
The property’s owner would prefer to lease it, but would entertain offers to buy it, though there is no price listed, Kosta said.
The building already has kitchen equipment, including a large oven hood, multiple fryers, a grill, a walk-in freezer and a refrigerator, but Kosta said whoever leases or buys it would likely want to make it their own.
“It’s going to take a substantial investment for somebody to do that,” he said. “I have seen interest, not from the regional or national restaurateurs we would like. We got a lot more interest from local mom-and-pop operators, which just makes it that much harder of a business model for them to come in there and do the kind of revenue that’s needed.”
2006 W. Willow St., Lansing
The nearly 7,000-square-foot building on West Willow Street has been vacant and on the market since late 2021 when DeLuca’s Restaurant closed its doors after more than 60 years of business. The property is listed for $649,900.
It remains for sale, despite having quite a lot to offer prospective buyers, said Gino Baldino, a real estate agent with NAI Mid-Michigan, which has represented the property for just over a year. Whoever buys it will get all the kitchen equipment, ovens and seating that is still inside, the restaurant’s liquor license, and ample parking on nearly an acre and a half.
“It’s a great building,” Baldino said. “The owners still maintain it very, very well. It is basically ready to go.”
Over the years, agents have shown the property to several prospective buyers, he said.
“I get inquiries,” he said. “Sometimes they go in spurts. Sometimes I get two or three calls in a week and sometimes, for a couple of weeks, I don’t get a call.”
Most of the people he’s shown the property to were considering opening their own restaurant, Baldino said.
809 E. Michigan Ave., Lansing
The nearly 15,000-square-foot building on East Michigan Avenue where Jon Anthony Florist has operated for at least 50 years sits on just over an acre and has over 200 feet of street frontage.
The property has been on the market for two years, listed for $1.6 million, but the flower shop, which dates back to the 1940s, still operates there. When the property sells, the flower business won’t close. It will likely move to a new location, said Pamela Sage.
Sage’s parents, and the founders of the flower shop, John and Harriet Anthony, passed away in the last five years.
“I’m the executor of their estate,” Sage said. “So we need to sell the property and settle with the rest of the inheritors.”
The decision to sell the property was emotional, she said.
“It was so much of my parents’ life. They absolutely loved their business. My mother worked there until she was 96,” she said.
Kosta, who is representing the property, said it’s been marketed to national companies, including restaurant groups.
“This property really just sets up well for redeveloping,” he said. “It’s an older building. I don’t think somebody will reuse the building, but to come in there and demolish it, you have a really good site. This has a lot of potential being right on Michigan Avenue.”
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Contact Reporter Rachel Greco at rgreco@lsj.com. Follow her on X @GrecoatLSJ .
LANSING — Priced at $255,000, a Roundtop Road home with vaulted ceilings, hardwood floors and an address within the Grand Ledge Public Schools district hosted a busy open house on Sunday.
Realtor Laura Guild warned that serious lookers should drop their highest and best offers, because the house was likely to be sold fast.
Patrick and Pat St. George, a retired couple now living in a Delta Township condominium, refused to get in a bidding war. They aren’t ready yet, having just started looking for a new home, one where they said they can “age in place.” Their wish list: A home that at minimum has a laundry on the first floor, good accessibility features and a price point within their range.
Patrick, 81, and Pat, 79, are hopeful since they feel more fortunate financially than young professionals starting out and paying off years of student loan debt.
“Everybody says the economy sucks and that the interest rates are too high and it’s the worst time in the world to sell your house. The flip side is offers are going in just bam, bam, bam,” Patrick said.
The St. Georges may have to look longer than they expect to get a home with those features. Then again, they may not.
The residential real estate market in Greater Lansing is expected to have slightly more homes sold at modestly higher prices than 2023, although what the Federal Reserve does with interest rates could alter the difference, experts said.
Regardless, don’t expect a return to the skyrocketing housing prices seen in 2020 and 2021 when interest rates briefly dropped below 3%, the lowest in many years.
About 85% of mortgage holders are locked into sub-5% interest rates, which kept many homeowners from selling their home and buying another at interest rates that peaked at 7.8% the week ending Oct. 26 and fell to an average of 6.6% by Dec. 28, according to Freddie Mac.
A Realtors.com forecast calls for a 1.2% increase in home sales across the Greater Lansing region, with prices expected to rise by 6.2% compared to 2023 prices.
“The higher rates affect the home buying power and there’s a housing shortage,” said Doug Petroff, president of the Greater Lansing Association of Realtors. “When there’s an egg shortage, the price of eggs goes up. Same with housing, except it’s more expensive. We have a lack of inventory in the local area.”
Average home sale prices continue to rise
Average home sales prices in Greater Lansing rose 4.6% last year, according to figures from Rooted Real Estate of Greater Lansing. Those numbers include home sales in Eaton, Ingham and Clinton counties and Portland.
Every major community except for Mason saw increases in average home values, led by Bath, where average home prices rose almost 20% in a year from $249,157 to $298,700. Bath Township is one of the fastest growing parts of the Greater Lansing area, second only to Okemos.
There were also double-digit gains in average home prices in Portland, Potterville Grand Ledge, DeWitt, Laingsburg and the Holt/Dimondale area.
DeWitt had the highest average home prices in the area, with 12.8% growth to $381,746, followed by Okemos, where average prices rose 4.9% to $369,172.
The smallest growth in average home prices was in East Lansing, where home values rose 3.5%, to $287,603 from $277,795.
Lansing saw prices rise 9.4% from $127,312 to $139,275, while East Lansing saw the smallest increase in average prices. Mason average home prices fell 7.7%, dropping from $260,155 to $240,200.
A Realtors.com forecast calls for average home prices to continue to rise, up 6.2% over 2023 averages and 42% higher than the 2017-2019 period.
The median home price in the Greater Lansing area was about $174,000 in January 2022. It hit a high of $237,000 in June and was at about $200,000 in December, according to figures from the Greater Lansing Association of Realtors. The local market tends to favor the summers, with higher average sales prices and in recent years more than 700 homes for sale, compared to about 350 during the winter months.
The region remains popular
Petroff said the affordability of the area, compared to other parts of Michigan and the Midwest, is a big attraction along with Michigan State University and Lansing being a capital city.
The area remains one of the most affordable metro areas, with median incomes in Lansing of around $51,000, which Realtors.com says is about 60% more than the minimum to qualify for a mortgage. Realtors.com said Grand Rapids is one of the most affordable communities in the nation, with higher median incomes and higher average home prices than the Greater Lansing area.
Lansing is forecast by Realtors.com to be the 22nd best of the nation’s 100 largest metro areas. The list does not distinguish between a buyer’s or seller’s market and is based on an expectation of changes in price and the number of homes sold.
Grand Rapids area home sales are expected to rise at a faster level, about 6.1%, and median sales prices are expected to rise 7.2%, where Realtors.com forecasts the western Michigan region as the ninth best market in the U.S.
The Detroit area, ranked at No. 36, is just out of the top third of the nation’s metro areas. The Realtors.com forecast calls for a drop in home sales (6.7%) and an increase in sales prices (10.9%).
Housing shortage driving prices up
The national housing shortage is also one of Michigan’s problems, said Brian Connolly, an assistant professor of business at the University of Michigan, with a focus including real estate.
“There’s a problem of both high housing costs and also low inventory,” he said. “There’s just not a lot of housing available, whether it’s rental or for sale, particularly in the really fast-growing markets across the country.
“The actual cost of homeownership has gone up dramatically because the monthly payments on an 8% mortgage are so much higher than they were on the 2% or 3% mortgages so if the mortgage rates come down you would expect to see sellers that have been sitting on the sidelines may be more inclined to sell.”
And it would increase the buying power of buyers if interest rates came down, he said.
“So any drop in rates would sort of help to unfreeze the market a little bit but at the same time the rate drops tend to go with an increase in home prices as well,” Connolly said.
Michigan’s current housing costs are low compared to other states but the state has an aging housing supply. Nearly half of the homes were built before 1970, and even with 22,000 new housing starts in 2022, the state is well below the national pace of new homes, according to a report from the Growing Michigan Together Council.
The group was created by Gov. Gretchen Whitmer to help address how Michigan can attract new residents and reverse its stagnated population.
“Develop and revitalize housing stock to meet Michigan’s housing demands,” is one of nine suggestions from the group, which also recommended attracting young talented workers, restructuring primary and secondary schools and having more public transit.
“(E)xisting housing—historically, the main supply of housing for middle- and low-income families—is scarce,” the report said, noting that rentals are also difficult to find with the state’s units for rent declining by 40% from 2010 to 2019.
Michigan remains affordable compared to other states
Connolly said research still needs to confirm it, but he suspects renewed interest in Michigan is similar to his own experience: He worked in Denver for years and sold his home there, at a good profit, to move back to the more affordable Michigan where he grew up. But now, he’s unlikely to be able to afford the same house in Denver if he ever wanted to go back, because higher housing prices and interest rates would make the same house nearly unobtainable.
“Housing prices are elevated here in Michigan as well, but it’s still quite affordable compared to the coastal markets and markets in the South and West,” Connolly said.
Some home buyers and sellers may have been spooked by interest rate hikes in the last half of 2023, pushing them off the market for now, said Faith Steller, a RE/MAX Realtor who has been in the local market since 2008.
“For some people a rate hike didn’t matter but some pulled back and some of them are wanting to come back out into the market, thinking rates are coming down a little bit,” Steller said.
Contact Mike Ellis at mellis@lsj.com