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Detroit to launch $250 million affordable housing fund, strategy

Photograph of Downtown Detroit
Detroit skyline

With real estate prices climbing steadily in some parts of Detroit, Mayor Mike Duggan is putting out more details about his plan to guarantee some affordable housing remains in the city.

Duggan first laid out the plan in his state of the city address last week. 

It revolves around a $250 million Affordable Housing Leverage Fund, and a plan to preserve 10,000 affordable housing units, and create another 2,000 new ones, between 2019 and 2023.

Arthur Jemison, Detroit’s director of housing and revitalization, says the city’s efforts will focus on “multi-family housing” in ten neighborhoods across the city, and especially on preserving current affordable housing units in resurgent areas where landlords may be tempted to raise rents.

“Creating more rental assistance like that, through preserving existing rental assistance contracts is critical, because that’s the way we’re able to target the population that’s here,” said Jemison.

The Duggan administration says the strategy primarily aims to help “those who stayed” — low-income families who stuck it out in Detroit through the city’s worst times.

Jemison says it’s also about laying the foundation for dense, mixed-income neighborhoods. “We want to concentrate growth in areas that are strong, to retain people and also attract new people,” he said.

The housing fund is still very much in the works. Jemison says the city has identified $50 million in federal grants and other funds, and hopes to raise another $50 million from philanthropic organizations. The remaining $150 million should come from partner financial institutions in the form of low-cost loans, according to the plan.

The focus will be on extending federal tax credits that are set to expire in current subsidized units, mostly  apartment buildings. The program will need to work with the Detroit Housing Commission on that and “preserving existing rental assistance contracts is critical, because that’s the way we’re able to target the population that’s here,” Jemison said.

Duggan’s office says there are currently 23,000 such units across the city, and the 10,000 number comes from the number of units whose federal affordable housing subsidies are set to expire by 2023. These tend to be affordable units for truly low-income families, Jemison says, with incomes at 60% of Area Median Income (AMI) or below.

As real estate becomes more valuable, especially in Detroit’s downtown and midtown areas, many building owners have evicted residents from affordable units as they aim to rehab buildings for higher-income tenants. Low-income senior housing has been especially hard-hit.Evictions across the city as a whole are also on the rise.

As for defining “affordable” units overall, Jemison says the city will use an 80% AMI measure for that. Some housing experts think that number is likely too high to be “affordable” in the city’s target areas for many low-income families in Detroit, where the median income is around $26,000 a year.

Sarah Cwiek joined Michigan Public in October 2009. As our Detroit reporter, she is helping us expand our coverage of the economy, politics, and culture in and around the city of Detroit.
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