Mayor Mike Duggan during his recent State of the City address announced plans to establish a $250 million multifamily affordable housing fund that sets two major goals for the city. First, to preserve 10,000 existing affordable housing units in neighborhoods across the city. Second, to develop 2,000 new affordable housing units in the City’s coordinated neighborhood planning areas.
The Affordable Housing Leverage Fund will be comprised of $50 million in grant funds, $150 million in low-interest borrowing, and $50 million in public funds from expected Federal and City funds for affordable housing over the next five years.
“The preservation and creation of affordable housing is the cornerstone of our growth strategy,” explained Mayor Mike Duggan. “Affordable housing offers stability for the city’s low-income residents and provides options to households at a range of incomes in all neighborhoods. This is what we are talking about when we say that we are building one city for all of us.”
The document from Detroit’s Housing and Revitalization Department details the city’s strategy to guarantee equitable development as Detroit’s housing market continues to recover in the wake of decades of disinvestment.
Goal No. 1 is to preserve 10,000 existing affordable housing units through the expansion of initiatives that already have helped to preserve 1,772 units of affordable housing across the city since 2015. Preservation and maintaining the affordability of an existing unit over time, are critical to retaining the city’s existing population and ensuring future affordable housing options for all Detroiters. The targeted residential units for preservation are at risk because of expiring low-income housing tax credits and deteriorating conditions, especially in neighborhoods that have seen improved market conditions.
The plan will preserve units by engaging owners of regulated and “naturally occurring affordable housing” to make sure they are ready to extend their affordability requirements and rehabilitate and extend the life of their existing affordable housing. The City will also prioritize and target the approximately 3,500 most at-risk units for investment. To do this, the City will seek a preservation community development financial institution (CDFI) partner with HRD and create the pipeline of preservation units.
The plan will also continue and expand initiatives that have helped to develop 852 units of new affordable housing since 2015. The Housing and Revitalization Department will work with the Planning and Development Department to identify vacant city-owned parcels and existing buildings for rehab in the designated neighborhood planning areas, as well as preservation targets within those neighborhood planning areas for redevelopment.
The Mayor has charged the Housing & Revitalization Department and City partners like the Detroit Housing Commission with the job of implementing the plan, starting with the creation of the Office of Policy Development and Implementation.
“We have had a chance to observe and speak with leaders from Washington D.C., Chicago, and San Francisco and learned how they have had to make major investments in affordable housing after the real estate market grew and missed some opportunities to include affordability in their revitalization,” said Arthur Jemison, who is Detroit’s Director of Housing & Revitalization. “With a strategy and fund of this kind, we hope to learn from their efforts and invest in affordable housing now.”
The City will also continue its work with the Detroit Housing Commission to make that organization a high-performer and a Moving-To-Work Housing Authority. With those milestones, housing authorities have been able to create project-based rental assistance benefits or their equivalent, serving households earning below 60 percent of Area Median Income range. The City will also work to create more permanent supportive housing to support ending chronic homelessness in.