Mich. Comp. Laws § § 125.677
Rent schedule; policy of state; basis; limitation.
Operative Text
Sec. 27. (1) It is hereby declared to be the policy of this state that each commission shall manage and operate, or cause to be managed and operated, its housing projects in an efficient manner so as to enable it to fix the rentals for dwelling accommodations at the lowest possible rates consistent with its providing decent, safe, and sanitary dwelling accommodations, and that no commission shall construct or operate any project for profit. To this end, the commission shall fix the rentals for dwellings in projects at no higher rates than it finds to be necessary in order to produce revenues which, together with all other money, revenues, income, and receipts from whatever sources derived available for such purposes, will be sufficient to do the following: (a) Pay, as they become due, the principal of, premium, if any, and interest on the bonds or notes issued for such project. (b) Meet the cost of and provide for administration, operation, and maintenance of the projects, including the cost of any insurance on the projects or on bonds issued for the projects, and for the creation and funding of a reserve for replacements and capital improvements related to the projects. (c) Create, during not less than the 6 years immediately succeeding its issuance of any bonds, a reserve sufficient to meet the largest principal and interest payments which will be due on the bonds in any 1 year thereafter and to maintain such reserve. (d) Make payments in lieu of taxes of an amount as may be imposed pursuant to section 11a by the incorporating unit, which sum, if any, shall be paid to the incorporating unit and other taxing units in proportion to the amount of taxes levied by that incorporating unit and the other taxing units in the year in which the payment in lieu of taxes is imposed. (2) After bonds issued for a project have been retired, the rentals fixed by the commission pursuant to subsection (1) may include an amount not greater than the maximum annual principal and interest that had been due on bonds issued for the project. The rental receipts attributable to this subsection may be used by the commission for any purpose for which bonds or notes may be issued under this act or to secure bonds or notes issued by the borrower pursuant to this act for other projects of the commission.
MCL § 125.677 et seq., Section 27 establishes that Michigan housing commissions must set rents at the lowest rates that still allow them to cover necessary costs — including bond debt service, administration, maintenance, insurance, reserves for replacements, and payments in lieu of taxes — without generating profit. The provision prohibits commissions from charging more than what is needed to meet these defined financial obligations. After any project bonds are fully retired, commissions may collect an additional amount up to what the maximum annual bond payment had been, and those funds may be directed toward other eligible housing purposes under the act.
Plain English — not legal advice.
Housing commissions operating under MCL § 125.677 et seq., Section 27 are expected to conduct regular financial analyses to ensure that rent schedules are set no higher than what is genuinely necessary to cover debt obligations, operating costs, reserve requirements, and any applicable payments in lieu of taxes. Compliant commissions document the specific revenue needs that justify each rental rate and avoid structuring rents to generate surplus profit. Once project bonds are retired, commissions that choose to collect the additional allowable amount under subsection (2) typically track and apply those receipts only to purposes authorized by the act.
General guidance for property managers — not legal advice for your specific situation. Consult an attorney for advice on your case.
Under MCL § 125.677 et seq., Section 27, tenants living in state-commissioned housing projects have a statutory basis to understand that their rents are legally required to be set at the lowest rates sufficient to cover defined project costs — not to generate profit for the commission. If a tenant believes a commission is charging rents that exceed what the law permits, general enforcement paths may include raising the issue with the relevant local housing commission, contacting a tenant-rights organization familiar with public housing law, or consulting with an attorney who handles housing matters. Reviewing the commission's publicly available financial records or rent-setting documentation may help clarify whether the rates align with the requirements of this provision.
General guidance for tenants — not legal advice for your specific situation. Consult a tenant-rights organization or attorney for advice on your case.
Generated October 13, 2026 — auto-generated, not yet human-reviewed. See /transparency for methodology.
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