KALAMAZOO, Mich.>> For years, when Michigan politicians talked about the state’s housing problem, they were referring to a surplus: too many run-down houses, stripped of valuable copper, sitting empty and blighting neighborhoods.

Now the message has flipped. In her State of the State address this year, Gov. Gretchen Whitmer lamented the housing shortage and landed one of her biggest applause lines with, “The rent is too damn high, and we don’t have enough damn housing. So our response is simple: ‘Build, baby, build!’ ”

If you want to know what the housing crisis for middle-income Americans looks like in 2024, spend some time in Michigan. The surplus-to-shortage whipsaw here is a mitten-shaped miniature of what the entire country has gone through.

I’ve been writing about housing and the economy for two decades, and have watched as the nation’s housing market has made the journey from boom to bust to deficit. There are lots of reasons this happened, but they center on a big one: the late-2000s housing bust, which the country has never fully recovered from. Or as Ali Wolf, chief economist at Zonda, a data and consulting firm, put it: “The Great Recession broke the U.S. housing market.”

At first, rapidly rising housing costs seemed like a regional problem. It made sense that places like San Francisco, which was already expensive, would be in crisis. Much of the rest of the country was still affordable, however, so high-cost “superstar cities” were seen as an exception instead of a warning.

Now California’s problem is everywhere. Double-income couples with good jobs are priced out of homeownership in Spokane, Wash. Homeless encampments sprawl in Phoenix. The rent is too damn high in Kalamazoo.

The housing crisis has moved from blue states to red states, and large metro areas to rural towns. In a time of extreme polarization, the too-high cost of housing and its attendant social problems are among the few things Americans truly share. That and a growing rage about the country’s inability to fix it.

So a few weeks ago I flew from California to Michigan. I spent most of my time in Kalamazoo County, a region of 261,000 people in the southwest part of the state.

Like Detroit, Kalamazoo got walloped by a foreclosure crisis in the early 2010s that left many of its neighborhoods with overgrown lots where ramshackle houses had been bulldozed. Its housing problems first appeared among lower-income families, then climbed steadily up to those considered solidly middle class.

As affordability problems have moved up the income ladder, both Kalamazoo County and the state have expanded their aid programs to include households that had previously made too much money to qualify for subsidized housing. It’s part of a nationwide shift in which housing assistance has moved from an anti-poverty focus to what is increasingly looking like a middle-class support program. Those ideas now permeate Vice President Kamala Harris’ housing plan, which calls for assistance both for first-time homebuyers and developers who build housing for them.

The idea of a truly free housing market, where private developers work to satisfy the demands of families that acquire homes through their own grit, has always been a fiction. From the GI Bill to government-backed mortgages to the generous tax breaks afforded homeowners and developers, housing is one of the most subsidized sectors of the economy.

Even with all that, housing costs have ballooned so much that governments of all sizes have decided that a broader and more direct form of aid is needed. They are putting money into private developers and expanding subsidies to middle-class families that make more than six figures. These initiatives are frequently wrapped in euphemisms, like “workforce housing,” that suggest middle-income assistance is conceptually different from welfare for the poor.

It isn’t; it’s just a different shade of the same problem. Which is that Americans’ wages have fallen so far behind the cost of living that each day more and more families find they simply cannot afford a place to live.

The lure of a place like Kalamazoo

Economic migration used to mean moving to a fast-growing city for a better-paying job. Now, finding shelter has become so onerous that housing costs are one of the major reasons people move, leaving good job markets for places with a lower cost of living, according to economists Peter Ganong and Daniel Shoag.

Willa DiTaranto can tell you why that is only a partial solution.

DiTaranto and her husband, Jim, moved to Kalamazoo eight years ago. They had been living in Philadelphia and paying $1,300 a month in rent plus $1,000 a month in student loans. Then they had a baby. They wanted to buy a house and have more children but couldn’t afford a place in any of the neighborhoods they liked. They started looking out of state.

Jim DiTaranto, a physician assistant, was making about $90,000 a year in Philadelphia, and could earn just more than six figures in Kalamazoo, where health care workers were in demand. According to a cost-of-living calculator Willa DiTaranto found online, his new salary would be worth something like $170,000 in Kalamazoo.

Putting it all together, the DiTarantos decided it made sense to move to Kalamazoo, a city Willa DiTaranto had visited as a child. In 2016, they paid $170,000 for a three-bedroom house. Later, they were able to buy an investment property. A well-timed relocation enabled them to go from landless renters to landlords.

“It felt like such a big fresh start,” DiTaranto said. “We found out we were pregnant with our second child the day before our offer got accepted. If we were still living in our rental house in Philly it would have been scary. Instead it was really exciting.”

When the DiTarantos arrived in Michigan, housing was already a huge issue in many of the nation’s highest-cost cities. And there were signs that housing problems were migrating with them.

In 2015, the year before the DiTarantos arrived, Kalamazoo County residents passed a new tax to help homeless families find permanent housing. But in the years since, the county had a harder time finding affordable places to relocate the families, and the rents for families it was able to help were rising so fast that the program had to direct more money toward keeping them housed.

During the COVID-19 pandemic, the coastal affordable-housing problem went national. The ability to work from home turned cities like Boise, Idaho, into some of the nation’s hottest housing markets, while ultralow interest rates fomented a buying and refinancing boom that raised prices even further.

Kalamazoo County’s home prices have risen around 40% since the pandemic, and rent prices even further. In 2020, residents voted to replace the 2015 homeless housing tax with a bigger and broader program. This time the fund, called Homes for All, which takes in about $8 million a year, would help the poorest of the poor while also encouraging developers to build homes for middle-class people like teachers and government workers.

Since they moved to Kalamazoo, the DiTarantos’ home has doubled in value. And last year, after their third child entered school, Willa DiTaranto went back to work. She took a position with the Kalamazoo County Housing Department, where her job is to figure out how to make housing more accessible for families that weren’t lucky enough to buy when hers did.

“As a homeowner I’m like, ‘Woo-hoo my value is going up,’ ” she said. “And then I’m trying to solve the reverse problem, which is nobody can afford a house.”

The final stop in the housing crisis

For decades, it was possible to live comfortably in Kalamazoo if you were middle class. When I say middle class, I don’t mean the $150,000-a-year professionals who call themselves middle class in New York, but someone like Barbara Tackett-Denney, a 67-year-old home health aide whose household income is $65,000 a year, right around the median for Kalamazoo.

Tackett-Denney lives with her husband, Henry Denney. His job, working in a factory that makes parts for hospital beds, accounts for most of the couple’s income. Until recently, the Denneys lived in a two-bedroom apartment in a century-old duplex with electrical wiring so unreliable that Tackett-Denney had to coordinate with neighbors on who was going to use what appliances when.

The rent, though, was only $630 a month.

They had enough left over to make two car payments, eat at restaurants regularly and never stress over the cost of a movie ticket. They were even able to save.

The Denneys had lived in the same place for a decade and hadn’t noticed the steep rise in local rents. When their landlord told them that he was selling the building, they found nothing they could afford.

The problem for the Denneys and millions of other renters is that they are searching for homes that were never built.

In the years leading up to the Great Recession, homebuilders were starting about 2 million homes a year. That number plunged during the crisis and never fully rebounded. Builders have since started an average of about 1.1 million new homes a year — far below the 1.6 million needed to keep up with population growth.

The nation’s housing shortfall is now between 1.5 million and 5.5 million units, depending on the estimate.

That deficit makes everything tighter. And it means that whenever there’s a jump in housing demand — like when millennials entered the housing market in large numbers in the early 2010s — it sparks against the metal of an underlying lack of supply.

More housing is the solution. And for the past decade a growing movement has pushed both red and blue states to loosen the building, zoning and environmental regulations that make housing more difficult and costly to build. Since 2018, states including California, Oregon and Montana have passed laws that allow for duplexes and small apartment buildings in formerly single-family-home neighborhoods.

Looser zoning and land use laws will be central to any lasting solution to the nation’s housing crisis, especially in urban areas. In Kalamazoo, new downtown apartments and townhouses helped revive its urban core.

Still, much of the nation’s housing shortage has little to do with a lack of high-density housing in cities. It’s also that builders aren’t putting up suburban subdivisions at the rate they once did.

For one thing, developers everywhere find it harder to raise money, and homeowners find it harder to get loans. That’s because banks and the government, in a quest to prevent another housing bubble, have raised lending standards and made mortgages harder to get.

Builders have also become more cautious since the 2008 crisis. Many moved away from off-the-shelf (“on spec”) homes, and now they prefer that customers pay for properties before they’re built.

Land developers have also cut back.

Which is to say that the results of big changes that cities and states have made will play out over decades.

Homes like the Denneys’ former duplex are what housing wonks call “naturally occurring affordable housing,” which is a polite way of saying places that are cheap because they are old and not very nice. They’re a huge piece of the affordability puzzle.

What has happened in Kalamazoo and elsewhere is that many of these older, cheaper units have either fallen into uninhabitable disrepair or been sold to investors who rehab them and raise the rents. Rehabs like that are necessary especially in Michigan, where close to half the housing stock was built before 1970. But because so little has been built since 2009, there is less “new” old housing to replace places that are naturally affordable, and the market pushes renters into much more expensive homes.

Thus, after weeks of searching for a new place, the Denneys landed in a $1,500 three-bedroom in a manufactured home. They no longer eat out, save or go to the movies, because so much more of their money goes to rent.

For all its housing price inflation, Kalamazoo is still so much cheaper than other parts of the country that it was recently named one of America’s most affordable cities for professionals. A darker way of putting it is that Kalamazoo is the final stop in the housing crisis. And that’s the problem with being a place where people move to feel richer: Those who get priced out have no place left to go.