City of Detroit Releases $203 Million Affordable Housing Plan

Detroit Mayor Mike Duggan and Detroit City Council Members Mary Waters, Latisha Johnson, and Angela Calloway announced a seven-point, $203 million affordable housing plan on July 21. The plan will increase housing services to Detroit residents with the greatest needs, rehabilitate affordable homes, streamline the approval process for affordable housing development, and provide down-payment assistance to new homeowners.

“We are excited to hear the City’s announcement regarding affordable housing,” said Ruth Johnson, public policy director of Community Development Advocates of Detroit. “Our over 200 members are experiencing and have been addressing the systemic issues underlying Detroit’s housing and eviction crises and long-standing disinvestment and displacement issues. We look forward to working with the City and other community stakeholders to develop and implement effective services, solutions, and supports.”

The plan will use $20 million in “American Rescue Plan Act” State and Local Fiscal Recovery Funds (SLFRF) to create a new Detroit Housing Services division, which will operate a hotline for people at risk of housing displacement or homelessness and implement a comprehensive homelessness diversion program. The hotline is expected to be operational by October 2022. These efforts build on the city’s existing database that connects renters with affordable housing options. In addition, the plan will fund at least six Detroit Housing Network neighborhood service centers for present and aspiring homeowners. Nonprofit providers will operate these service centers and provide housing counseling, foreclosure prevention resources, and other programs.

The Detroit Housing Commission (DHC) will acquire 10 to 12 vacant apartment buildings, rehabilitate them, and lease their units at affordable rates to extremely low-income renters. DHC will allocate $20 million from the sale of the Brewster-Douglass site, formerly the home of Detroit’s largest public housing complexes until their demolition in 2014, to financing and leveraging opportunities for this initiative. DHC is currently considering four buildings with 10 to 20 units each. After four to six months of evaluating potential sites, construction on the properties is expected to begin in the spring of 2023.

The plan will also use $3 million in SLFRF to launch a Detroit Land Bank affordable home program. Detroit Land Bank Authority (DLBA) will sell 20 to 50 of its homes to local community development organizations, which will use city subsidies to rehabilitate the homes. These homes will be rented for at least 10 years to low-income renters with incomes that are 50% and 60% of Area Median Income (AMI), with renters being given the option of buying their properties and becoming homeowners. The City of Detroit estimates that home repairs will begin in the spring of 2023 and the first homes will become available for residents in the winter of 2023.

The Detroit City Council and Detroit Housing & Revitalization Department will collaborate to streamline the approval process for housing developments that include affordable units (targeted to renters making 60% of AMI or below). Currently, the approval process for affordable housing development has at least nine steps. The plan also directs $132 million in state and federal funds to construct 1,600 new affordable homes, with 250 of these homes designated as permanent supportive housing for people transitioning out of homelessness.

The plan allocates $13 million in SLFRF to launch a down-payment and homeowner assistance program, which will help 600 Detroit renters transition into homeownership. One-third of these renters will receive support, including capital improvements and homeownership counseling, to purchase the homes they are currently renting. Two-thirds of participants will receive down-payment assistance to buy homes that they are not currently renting.

The plan directs $5 million in SLFRF to bring more than 1,000 rental homes into compliance with city code. These resources will be divided among three programs. One program will rehabilitate vacant second-floor units in commercial areas and transform them into affordable housing. The other programs will provide property management and improvement training to small-scale landlords. After completing the training programs, landlords can apply for matching grants to renovate their properties and ensure compliance with the rental code.

Finally, the plan directs $10 million in SLFRF to provide self-sufficiency support to Detroiters facing rising rents. These resources will be invested in the city’s Detroit at Work program, which helps residents gain access to job placement and educational opportunities.

To explore other jurisdictions that are allocating SLFRF to housing programs, visit NLIHC’s State & Local Fiscal Recovery Funds database