Housing Development Using Tax Increment Financing

The need for diverse options of affordable housing has become increasingly relevant for the economic development community, especially in Michigan. Private companies seek communities that have a healthy inventory of homes when making location decisions, but today’s market has not been able to keep up because housing costs have increased faster than incomes.

The guidebook not only serves as a guide to the development process but helps when making the case to investors and local leaders for housing needs in a community. Terms, examples, checklists, and estimating tools will guide users through the process.

OVERVIEW

The Need for Housing
This section outlines the affordable housing issue in Michigan and how the Tax Increment Financing Act (PA 381 of 1996) can be a part of the solution.

The Development Process
This section covers who you need on your development team for a successful project, the predevelopment stage, measuring feasibility (includes a case study), and why some deals "don't pencil."

The Tax Increment Financing Process
This section provides a practical explanation of how the incentive works, how to use it, finding redevelopment sites, recognizing eligible costs, how brownfield TIF works, how to get a brownfield plan approved, and evaluating the project.

Download Community Home Solutions Using Tax Increment Financing Guidebook

Attachments
I. Due Diligence Checklist
II. Proforma
III. Tax Increment Revenues Estimating Tool
IV. Pros and cons of combined and separate BRA/LBA

UPDATE: Click here for an update from MSHDA on Tax Increment Financing for housing from September 2023. MEDA is looking at updating our Guidebook to include the new legislation.

This guidebook was funded by a grant from the Michigan Land Bank Authority and was developed by a workgroup made up of individuals from Acosta Real Estate & Development, Envirologic, Fishbeck, Habitat for Humanity Northeast Michigan, Habitat for Humanity of Michigan, Housing Next, Housing North, InnovaLab Development, Lake Superior Community Partnership, Michigan Community Capital, Michigan Economic Developers Association, Michigan Land Bank Authority, Michigan State Housing Development Authority, Michigan State University (MSU) Extension of Washtenaw County, National Development Council, Northern Homes Community Development Corporation, Renovare Development, and Shiawassee Economic Development Partnership.

Disclaimer
The content of this guidebook is not a substitute for your own due diligence, analysis, calculations, and judgement. Where calculations and valuation tools are provided, they are intended for general illustration and education only. Any pre-defined values offered are generic and must be amended according to your own market research. We do not endorse any outputs calculated. As such, we will not be liable in respect of any damage, expense or any other loss you may suffer arising out of such information or any reliance you may place upon such information.