Housing Policy & Development

Housing remains one of the most significant barriers to economic growth in our region. In Q1, we’ve seen a surge in legislative activity, including:

• A package of zoning reform bills (“Housing Readiness Package”)
• Introduction of the proposed MI Home incentive-based housing program
• A proposed state-level housing tax credit announced during the State of the State

These proposals reflect both growing urgency and differing perspectives on how to address housing supply and affordability challenges.

Energy Policy

Energy legislation continues to have direct implications for reliability and cost—particularly in the Upper Peninsula.

Key items we are tracking include:

• Legislation to allow continued use of RICE natural gas generators through their useful life
• Proposals to count these systems toward clean energy goals
• A bill introduced to repeal portions of recent statewide energy laws

Given the U.P.’s unique energy landscape, these discussions are critical to maintaining stable and affordable energy access.

Continue reading here for a summary of the issue and how you can provide input to help balance climate, energy, and rising costs.

Property Tax Policy

Property tax reform is expected to be a major focus in the House this year, with several proposals under discussion:

• Potential elimination of certain state property taxes through expanded sales taxes
• Changes to how property taxes are recalculated after a home sale (uncapping)
• Requirements for school millage elections
• Targeted relief proposals, including tax breaks for seniors

These conversations could have significant implications for both local government funding and development feasibility.

Commercial Rehabilitation Act Renewal

The Commercial Rehabilitation Act is a key redevelopment tool that supports investment in existing buildings and downtowns.

We are closely monitoring efforts to renew and potentially update this program, recognizing its importance in:

• Supporting adaptive reuse projects
• Encouraging private investment
• Revitalizing underutilized properties

Interstate Medical Licensure Compact (IMLCC)

Access to healthcare workforce remains a critical issue for our region.

Legislation has been introduced in both chambers to:

• Maintain Michigan’s participation in the Interstate Medical Licensure Compact
• Remove the current sunset provision

This tool has been important for physician recruitment and flexibility, particularly in rural and border regions like the Upper Peninsula.

State Budget (FY 2026)

The State of Michigan’s proposed $88.1 billion budget includes several items relevant to economic development:

• Continued funding for business development and community revitalization programs
• Ongoing investment in housing through MSHDA
• One-time funding for strategic site readiness
• No proposed funding for the Going Pro workforce training program
• Baseline funding for the Office of Rural Prosperity without additional grant support

Budget discussions are ongoing, with final adoption expected later this year. Revenue projections indicating a potential shortfall are also influencing these conversations.

Additional Issues We’re Monitoring

In addition to the priorities above, LSCP is tracking a range of other policy discussions that may impact our region:

• Job creation and economic development tax tools
• Short-term rental regulations
• Childcare regulatory reform
• Liability standard updates
• Healthcare-related legislation
• Statewide economic development strategy proposals
• Organizational and structural changes to state economic development entities