The City of Detroit released new details Monday of an ambitious plan to establish a $250 million affordable housing fund that will preserve 10,000 existing units in neighborhoods throughout the city and develop 2,000 new units within the next five years.
According to the city, the Affordable Housing Leverage Fund will be funded with $50 million of grant funds, $150 million of low-interest loans, and $50 million in public funds from expected federal and city funds for affordable housing over the next five years.
In a statement to the Free Press, Arthur Jemison, Director of Housing and Revitalization, said the Detroit City Council will need to approve some funding elements of the fund. Jemison is planning to go before the council’s Planning and Economic Development Committee on March 22.
“Funds planned to be committed by (the) city will require standard council approvals,” Jemison said. “Philanthropic funds committed do not need council approval to be invested in the developments.”
The Housing & Revitalization Department, along with other city partners like the Detroit Housing Commission, will lead the effort, starting with the creation of the Office of Policy Development and Implementation, the city said in a news release.
Mayor Mike Duggan initially announced the plan during his State of the City address last week, saying the city planned to focus efforts on preserving the city’s affordable housing stock. In the address, Duggan acknowledged that just “keeping what we have isn’t enough.”
“The preservation and creation of affordable housing is the cornerstone of our growth strategy,” Duggan said in a statement Monday. “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 targeted affordable units for preservation are at risk because of expiring low-income housing tax credits and deteriorating conditions. In his address, Duggan told the story of a Detroit woman, Stella Buchanan, who was one of several residents pushed out of the federally subsidized Griswold Apartments after a new developer purchased the property.
According to the city, rents have experienced steep growth, particularly in downtown, where much of Detroit’s redevelopment has occurred so far.
From 2005 to 2016, rents have increased by more than 37%, from an average of $746 per month to $1,020 per month. During the same time, average rents increased in the city as a whole by 26%, from $650 per month to $820.
“So we’re starting to build a different culture, 1,772 people like Stella Buchanan now know their homes are protected for anywhere from 15 to 30 years because you stayed and we’re going to make sure that you know that you’re valued,” Duggan said.
The plan would 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 also plans to target about 3,500 units considered to be most at-risk for investment. The city is hoping to partner with a preservation community development financial institution and the Housing and Revitalization Department to create the pipeline of preservation units.
The plan would also expand build upon initiatives that have helped to developed new affordable housing units. Last year, the city council approved an ordinance introduced by Councilwoman Mary Sheffield that requires housing developers who receive a certain threshold of public subsidies or discounted city-owned land in Detroit to set aside at least 20% of their units for lower income residents.
The city said Monday its Housing and Revitalization Department is working with the Planning and Development Department to identify vacant city-owned parcels and existing buildings for rehab in neighborhoods chosen as part of the “designated neighborhood planning areas.”
Tribune Content Agency