The Paletz Law Blog

Just in time for Halloween, Bad Michigan Housing Policies Are Contributing to ‘Ghost’ Apartments and ‘Zombie’ Mobile Homes

When you combine two-plus years of eviction moratoriums, an inflationary economy that is causing financial harm to tenants, increased government regulation, and skyrocketing interest and insurance rates together, you get a formula scarier to our housing sector than any costumed teenager coming to your door for candy – “Ghost rentals.” And not unlike that spooky paranormal apparition, these empty rentals could be in your neighborhood now and you wouldn’t even know it. Unfortunately, in a state needing more affordable housing, this isn’t helping.

This scary “Ghost” epidemic is hitting our state hard right now. Let’s start with the dearth of available mobile homes on lots across Michigan. The owners of the manufactured housing communities cannot refurbish, re-rent, or sell many of these homes because the Michigan mobile home title process has been destroyed through changes made by the Secretary of State. What was once a streamlined title procedure has now been uprooted and replaced by a convoluted policy leading to hundreds of these now “zombie-like” homes being unoccupied and unimproved, and in desperate need of these being brought back to life.

From a public policy perspective, there has to be some movement by the state for reform of the Michigan mobile home title process before this problem becomes untenable. Michiganders need housing and mobile homes are an affordable option. Plus, in the aggregate, increasing the number of rental units, whether they be manufactured homes, stick-built homes, or apartments, is good for a state struggling to offer enough affordable places for residents to live in.

We also need more new construction to help the lack of affordable housing in the state. However, many builders and investors have shut down plans for affordable multi-family housing developments and single-family homes because of the construction, labor and material costs, as well as interest and insurance rates.

Add all this to the fact that Michigan has had recent protests and legislation asking for state-mandated rent control and the timing couldn’t be worse. In New York, which has become the nation’s hub of rent-control madness, housing laws enacted in 2019 have restricted the amount landlords can recoup from renovating rent-regulated apartments — even if the previous tenant had been there for 50 years. There are currently one million rent-controlled and rent-stabilized apartments in the city, resulting in at least 40,000 “Ghost apartments” left empty by landlords in one of the tightest rental markets in the country, according to the New York Post.

As the state of Michigan considers the same, amidst a deafening roar of housing advocates pushing rent control narratives, I can tell you, as someone who works in the housing space every day, that I agree that Michigan is suffering from a definite lack of affordable housing. However, a significant impact on the housing market is the law of supply and demand and I continue to be a proponent of when you increase housing supply, you help address this issue. To do this, you need a ton of incentivized people to put their capital in new or renovated housing units. An increase in supply would bring rents down across the state.

The Bottom Line: Forced, regulated, and state-mandated rent control would deter investment and promote more “Ghost houses” to disappear from the available housing market.  I can’t say it better than actor Bill Pullman did when trying to define ghosts in 1995’s Casper movie.  “You can call them ghosts, if you’d like, or as I like to call them, “the living-impaired”. I call upon those in the Michigan legislature to resist the pressure and work with those who literally have the keys to housing solutions – property owners.