The Role of Housing in Workforce Development and Manufacturing Expansion in Michigan

This article appeared in the June 2025 issue of MiMfg Magazine. Read the full issue and find past issues online.

The availability and location of workforce housing in Michigan are critical factors in the placement of manufacturing facilities — and equally vital to recruiting and retaining a skilled workforce. Like many states, Michigan faces a housing crisis. Safe, affordable housing is in short supply for working individuals and families. Addressing this challenge is essential to ensuring long-term economic growth for communities and the state as a whole.

A successful workforce housing strategy must prioritize three core elements: location, amenities and supportive public policy.

Location is Paramount

Proximity to reliable public transportation is essential. Workforce housing should be situated near transit lines that connect directly to manufacturing hubs, with minimal stops or detours. Without this connectivity, workers must rely on personal vehicles — an often insurmountable barrier for entry-level employees.

Even where transit exists, if it is not aligned with common shift schedules or results in long commute times, it fails to serve its purpose. The burden then shifts back to individuals, making stable employment more difficult to attain.

Access to childcare is another critical consideration. When childcare is distant from both housing and job sites — or when hours are misaligned with working schedules — families are forced into untenable decisions. Ideally, childcare should be integrated within workforce housing developments or positioned along public transit corridors connecting home and work.

Workforce housing should also be close to essential services such as full-service grocery stores, health care providers and other community resources. These features reduce friction in daily life and promote long-term residential stability.

Amenities and Building Considerations

Modern workforce housing must be more than four walls and a roof. Properties should include shared spaces that promote comfort, connection and well-being. As remote and hybrid work becomes more common, features such as high-speed internet and small business centers are increasingly important.

Additional amenities — such as fitness centers, pet wash stations and yoga studios — help support physical and mental health. Access to green space is essential, even in dense urban environments where rooftop gardens can provide a peaceful escape.

Individual units should offer functional design, natural light, in-unit laundry and open floor plans to meet the expectations of today’s workforce and support long-term satisfaction.

Policy Tools and Community Levers

While local governments can’t control interest rates or global supply chains, they do control key levers that influence development feasibility: zoning codes, connection fees, and property taxes.

Outdated or overly restrictive zoning — such as height limits, setback requirements and density caps — artificially inflates per-unit costs. Communities must revise these regulations to support innovative, cost-efficient housing designs.

Connection or impact fees often represent significant hard costs that can jeopardize a project’s viability. Reducing or waiving these fees for workforce housing can unlock development.

Property taxes may be the most powerful tool. Michigan offers programs like Tax Increment Financing (TIF) and Neighborhood Enterprise Zones that reduce the tax burden on rental housing. However, local adoption is critical. Too often, municipalities treat workforce housing as a revenue source rather than a public good. Because rental properties are valued based on Net Operating Income (NOI), high taxes reduce appraised value and restrict available financing — creating equity gaps that delay or derail projects.

The Path Forward

To grow Michigan’s employment base, we must grow its housing base. A thriving economy requires a broad spectrum of housing options that serve all income levels. This is not a challenge any single sector can solve alone. It will require collaboration among public, private, and nonprofit partners, supported by thoughtful policy, inclusive planning and long-term investment in people and places. 6

About the Author

Richard “Trae” Allman is Principal and Co-founder of Innovo Development Group, leading transformative real estate projects across Michigan. He brings 25+ years of experience and over $1 billion in completed developments. He may be reached at 844-546-6686 or trae@innovodev.com.

Innovo Development Group is an MMA Premium Associate Member and has been an MMA member since April 2025. Visit online: innovodev.com.