City introduces $203M affordable housing plan to protect Detroiters from rising rent

Detroit — City leaders unveiled a $203 million affordable housing plan Thursday that takes steps toward addressing housing insecurity and protecting Detroiters from rising rent costs.

Detroit Mayor Mike Duggan joined three new city councilmembers – Mary Waters, Angela Whitfield-Calloway and Latisha Johnson – to outline the seven-step plan.

The city plans on renovating vacant apartment buildings and Detroit Land Bank Authority homes to produce affordable units, provide mortgage down-payment assistance and establish a new housing-services division. Many of the projects are expected to be funded with a portion of the city’s $826 million share of American Rescue Plan Act funds.

Thursday's announcement was held in front of a vacant city-owned apartment building built in 1929 on Tyler near Davison and Linwood, one of the multifamily structures that the housing commission is considering renovating.

The $203 million investment is solely for 2022 and does not include future annual allocations for affordable housing and preservation in Detroit, city housing officials said.

Duggan touted the collaborative plan Thursday saying he believes they've developed "one of the most compressive strategies for providing affording housing in the country."

“Despite the progress we have made, we needed to do more to address the need for quality and deeply affordable units," Duggan said. "This plan represents a true partnership between the City Council, this administration and our community partners to get more affordable housing to Detroiters faster while improving the safety and quality of existing rental properties in the city."

True affordable housing hasn't been within reach because the area median income  is too high, Waters said. Median family income is $80,000 for Wayne County; 60% of the area median income would be $39,000 for a two-person household or $49,000 for a family of four.

“Providing housing at 30 to 60%  of [area median income] will be a relief for citizens. With the addition of a hotline for housing needs, the city will now be a resource, a one-stop shop, for all housing needs," said the at-large councilwoman.

Whitfield-Calloway, who represents District 2, has been advocating housing needs as a crisis in the city and said she is proud of the plan they've jointly developed.

“Housing is undoubtedly a human right. Ending chronic housing insecurity has been a cornerstone of my legislative platform because Detroit has spent too long in the throes of housing precarity," she said.

7 pieces of plan

1. Detroit housing services ($20 million in American Rescue Plan Act funds)

A central Detroit Housing Services division will be established to include a network of at least six Neighborhood Housing Services centers run by nonprofit providers that will serve as one-stop-shop resources to connect current and future Detroit homeowners with a range of programs, including housing counseling and foreclosure prevention services.

The hotline will offer assistance for those looking to avoid housing displacement, as well as emergency response for those facing immediate homelessness and connections to housing resources. 

2. Detroit Housing Commission apartment building rehabs ($20 million in Detroit Housing Commission funds)

The Detroit Housing Commission will use $20 million from selling the Brewster-Douglass site to acquire 10 to 12 vacant apartment buildings in neighborhoods across the city, rehabbing them and then leasing units at 30% the area median income.

“We know that many for-profit developers aren’t tackling these smaller buildings of 20 or 30 units, so this initiative will restore these neighborhood eyesores that dot our city into beautiful, deeply affordable housing,” said Sandra Henriquez, CEO of the DHC.

3. Detroit Land Bank affordable home program ($3 million in ARPA funds)

This initiative will begin with 20 to 50 Detroit Land Bank Authority-owned homes that will be sold to local community development organizations, which will use city subsidies to rehab the properties. The properties will then be rented for at least 10 years at 50% to 60% area median income, with the option for the renter to buy the property.

“We know that many Detroiters need options beyond the small apartments traditionally offered as affordable units, and using Land Bank houses gives families flexibility and room to grow," said Tammy Daniels, land bank chief executive officer, in a statement.

4. More affordable housing and expedited approval process ($132 million in ARPA and state and federal funds)

The City Council will work with the Detroit Housing and Revitalization Department to streamline the process for council to approve affordable housing developments that include units to be rented at 60% area median income or below. The current process often requires nine steps or more to get the nine-member council approval.

The plan also calls for the funding of 1,600 new affordable housing units across at least 30 individual developments, with 250 of the units designated as permanent supportive housing with a range of services available to Detroiters who are transitioning out of homelessness.

5. Down-payment and homeowner assistance programs ($13 million in ARPA funds)

This program will help 600 Detroiters who currently renting become homeowners through a down-payment assistance program. A third of those helped will receive funding and support to transition to owning the homes they are now renting through capital improvements and homeownership counseling. The remainder will receive down-payment assistance to buy homes that they aren’t currently renting.

6. Programs to bring more than 1,000 rental units into compliance ($5 million in ARPA funds) 

Through a suite of programs, $5 million in funding will be used to bring rental units into compliance with rental codes. A second-floor rental rehab program will transform vacant second-story apartment units located in commercial corridors into affordable housing. Property management and improvement training programs will be offered to small-scale landlords, who will then be eligible to apply for matching grants to renovate their properties and bring them into compliance with the rental registration ordinance.

7. Self-sufficiency support for those facing rising rents ($10 million in ARPA funds)

With rents increasing as demand for housing in the city increases, the City of Detroit’s Detroit at Work program can help residents through immediate placement in good-paying jobs or in “earn to learn” programs, including literacy and GED programs.

“In our mission to secure this future for all residents, we must deploy all available tools and launch innovative strategies to increase our supply of affordable housing, repurpose vacant properties, and help residents fulfill their dreams of homeownership," said Julie Schneider, director of the city's Housing and Revitalization Department. "The $203 million affordable housing plan harnesses public funding and the collective power of partnerships to fulfill this mission.”

srahal@detroitnews.com

Twitter: @SarahRahal_