One of the state’s largest single-family homebuilders plans to increase its investment in workforce housing by nearly 30% using newly available state incentive programs.

Portage-based Allen Edwin Homes pledged at a news conference Wednesday at the Mackinac Policy Conference to build 2,500 new units of workforce rental housing over the next 10 years in communities across Michigan, supported by the state’s housing brownfield tax increment financing program.

The incentive tool was expanded in 2023 to include workforce housing development and rehabilitation as an eligible activity for TIF reimbursement.

The Michigan State Housing Development Authority, which administers the housing TIF program, defines workforce housing as affordable to households making up to 120% of the area median income.

Allen Edwin’s new 10-year commitment would add 250 workforce units per year in addition to the 850 market-rate and for-sale units per year that the company is already or planning to build. In total, Allen Edwin now plans to build 11,000 housing units over the next decade in Michigan.

Brian Farkas, director of workforce housing for Allen Edwin Homes, told Crain’s Grand Rapids Business that the ramped-up investment would not be possible without state support.

“We’re seeing prices for all of our inputs going up year after year, and that was putting significant pressure on pro formas in different areas of the state, as far as building the houses,” he said.

The state’s housing TIF law “allows us to put a lot of pro formas and projects back in play, and it also allows us to build units for the workforce housing segment,” he added. “We’re very happy with the (incentives) climate in Michigan right now.”

MSHDA CEO and Executive Director Amy Hovey said housing TIF has helped to close the state’s unit shortage, spurring commitments like this one to build thousands of new homes.

“We’re grateful to have partners like Allen Edwin Homes who are embracing innovative solutions to help get more homes built that are affordable for working people in Michigan to purchase,” Hovey said in a statement.

Lt. Gov. Garlin Gilchrist, who joined Hovey and Farkas at the Mackinac news conference, said the tool is one way the state has been able to add nearly 22,000 units between 2023 and 2024. 

He said the program “brings together public and private sectors to address this critical need that affects every neighborhood.”

“We all have a role to play in contributing to solving this. Let’s keep getting it done together,” Gilchrist said in a statement.  

Farkas declined to attach a dollar figure to Allen Edwin’s plans to ramp up housing development, but said it represents an acceleration by almost 30% of the investment into single-family homes that it would otherwise make.

Notably, Allen Edwin has recently shifted from exclusively homeownership developments to including some rental units in various projects, including Breton Ravines in Kentwood, to qualify for the state housing TIF incentive program.

Allen Edwin will also continue using another local incentive tool, payment in lieu of taxes, or PILOT, to support its ambitious workforce housing goal. The state passed enabling legislation in December 2022 that lets municipalities adopt PILOT ordinances to foster workforce housing. Allen Edwin then used the incentive program in communities including White Cloud in Newaygo County and plans to continue that in cities that have the ordinance, Farkas said.

Allen Edwin is on pace to build more than 1,000 homes in 2025 with a focus on expanding workforce housing, Farkas said.

The homebuilder includes a map of planned or in-progress projects supported by housing TIF and PILOT incentives on its website. Among the workforce projects in the pipeline are LIV East Bay in Grand Traverse County’s East Bay Township, Oakland Commons in Portage and an expansion of the Three Meadows neighborhood in Hillsdale. Together, those three will add a total of about 330 new homes. Each of the projects will reserve 20% of the units as workforce housing.

Farkas said Allen Edwin Homes also plans a workforce housing project in Grand Rapids in partnership with Habitat for Humanity of Kent County, with more details on that to come.