Supportive-housing advocates press Legislature for $25 million appropriation after state pilots show high retention and cost offsets

Supportive‑housing providers and state officials asked the House Appropriations Subcommittee on Human Services for a $25 million appropriation for FY 2026, saying previous state investments produced high housing retention and reduced public costs.

Catherine Distel Tilrath of the national nonprofit Corporation for Supportive Housing told the panel the program pairs affordable housing with intensive case management for people who are chronically homeless and have disabling conditions. “Supportive housing at its core is really affordable housing paired with supportive services,” Distel Tilrath said, summarizing why providers argue the combination improves outcomes.

The request follows two recent state allocations: a $6 million FY 2023 appropriation and a $20 million FY 2024 supplemental allocation. Distel Tilrath said the FY‑23 funds supported programs that served 470 supportive‑housing residents at a reported 98% housing‑stability rate, and that 82% of those residents maintained or increased income while in the program. She said the FY‑24 funding is expected to serve roughly 2,000 additional residents once MDHHS announces final grantees, and that a $25 million FY‑26 appropriation is estimated to serve about 3,125 residents overall.

Becca Binder of Northwest Michigan Supportive Housing, which serves five rural counties centered on Traverse City, described how case management and rental subsidies operate in a rural, scattered‑site model. Binder said her program owns six properties with 28 units but relies mostly on leased units with local landlords and on travel‑intensive case management. She credited state SSTF (Supportive Services Transformation Fund) allocations with improving outcomes: “This is preventable,” Binder said of deaths and harms associated with prolonged homelessness, and she described local outcomes after receiving MDHHS funds: 57% of people in her program gained or increased income in the previous year and program retention rose to about 96% (up from about 92% before the MDHHS funds).

Ashley Halliday Schmack, director of the Northwest Michigan Coalition to End Homelessness, said the SSTF funds allowed programs to operate at the evidence‑based 15:1 client‑to‑case‑manager ratio and helped leverage local investments. She said combined regional commitments from Grand Traverse County and the city of Traverse City will serve at least 10 additional households next year and stressed the life‑and‑cost savings from housing: “Supportive housing, when fully resourced, works. It saves lives and it saves money,” she said, citing a five‑year randomized study shared by the Corporation for Supportive Housing showing large reductions in arrests, jail days and ER visits and an approximate $7,000 per person annual cost offset.

Yaro Brown and Kent Wood, representing Housing North, framed supportive housing within broader regional housing shortages. Brown said the 10‑county Housing North region needs about 31,000 homes by 2027 and has built roughly 4,000 so far (about 11% of the target). He described zoning and capacity barriers in rural communities—single‑family zoning, limited municipal staff, community opposition—and urged state support for gap financing and capacity building to increase supply and voucher‑accessible units.

Duane Haywood, senior deputy director for the Economic Stability Administration at the Michigan Department of Health and Human Services, described statewide program delivery and recent investments. He told the committee MDHHS administers about $60 million in federal and state homeless grants (71% federal, 29% general fund), provides more than 1,000,000 nights of emergency shelter annually, and supports rental assistance for more than 2,700 people. Haywood reported more than 31,000 people experienced homelessness in Michigan in 2024 and summarized providers and state partners involved in the response. He highlighted newer items such as an Emergency Housing Fund for families linked to child welfare and the supportive‑housing pilot that funds case management and leasing efforts.

Committee members asked about timelines and measurement. Binder said her program’s retention and income outcomes refer to fiscal year 2024 (Jan. 1–Dec. 31, 2024). Committee members and MDHHS staff discussed opportunities to align supportive‑housing case management with Medicaid reimbursement and other benefit systems; MDHHS said it would follow up with more detailed information.

The hearing did not produce committee votes on funding. The only formal action recorded earlier in the meeting was the committee’s approval of the April 15 minutes on a motion from Representative Edwards with no objections.

Why it matters: Supportive housing is a targeted, evidence‑based intervention for people with long durations of homelessness and co‑occurring disabilities. Proponents at the hearing argued that targeted state appropriations for services and subsidies both improve individual outcomes (housing retention, income and health) and reduce downstream public costs (incarceration, emergency medical care). Opponents were not recorded at the hearing; committee members asked for follow‑up on data, Medicaid alignment and program durations.

Ending: Supportive‑housing providers asked lawmakers to include a $25 million line item in the FY‑26 budget to expand services statewide and to build provider capacity to bill Medicaid where possible. MDHHS and nonprofit partners said they would provide the committee follow‑up data on program timelines, Medicaid‑billable services, and more detailed cost studies.