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What does “affordable” housing mean in New Detroit?

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Why low-income Detroiters haven’t benefited from the city’s housing boom

A four-story beige and brown building with a few people, cars, and bikes out front.
Rendering of Gratiot Central Commons, which offers 36 low-income units.
Detroit Catholic Pastoral Alliance

Finding affordable housing in Detroit is more challenging than you might think. That’s certainly been the case for 24-year-old Lisa.

Lisa, who wishes to remain anonymous, doesn’t make much money. She completed training at a technical school, but hasn’t found a job in her field and works at a national grocery store chain. Currently living with a friend and anxious for a home for herself and her son, she embarked on a search for affordable housing in Detroit.

It’s been, in a word, frustrating.

“Most people who are looking for low-income housing are usually in urgent situations,” says Sandra Henriquez, executive director of the Detroit Housing Commission. “The thing that they need most is probably what they have the least, and that’s patience.”

Low-income renters, even those with no criminal record or past evictions, sometimes have to wait years for affordable housing.

“There is only so much housing stock and people who get this assistance tend to keep it,” Henriquez says. “It’s a very scarce commodity, so one would have to be prepared to wait at least two years, if not longer.”

Why is affordable housing so scarce in Detroit?

When one thinks of low-income housing, they may first think of public housing. Unlike New York or Chicago, Detroit never really had tall skyscrapers of public housing units aside from the Brewster-Douglass Projects, which hadn’t been fully occupied for decades before being demolished in 2013.

There are still around a dozen public housing projects in the city. Just over half of those, about 3,300 units, are actually managed by the Detroit Housing Commission. In total, there are approximately 22,000 housing units, or 6 percent of all units, classified as affordable in Detroit.

There is also the voucher program, commonly known as Section 8. These federally controlled vouchers are administered by the state and can be used at public housing units, as well as with private landlords who choose to accept them.

With either of these programs, the waitlist is long.

“Applying for low income housing can be frustrating. We have to remain in compliance and verify those incomes,” says Tim Thorland, executive director of Southwest Housing Solutions.

There are also market-rate rentals. Detroit still has a fairly soft housing market and some units can be found fairly cheaply. “To be honest, there is no shortage of inexpensive housing in Detroit. You can find a $500 to $600 unit in the city,” Thorland says. “The biggest challenge in that price point is quality.”

Programs like Southwest Housing Solutions provides low-income housing options, but with units that are consistently renovated. Their portfolio features energy efficient newer-looking units in neighborhoods like Hubbard Farms, which is rapidly transitioning for the better.

But for most landlords, it’s a challenge to afford basic maintenance, let alone do lead and asbestos abatement, on a rental unit that only earns $600 a month per tenant.

Very few of the new rental units in Detroit are truly affordable to the city’s residents. As part of the city’s Inclusionary Housing Ordinance, residential developments subsidized with over $500,000 in city or federal funds must reserve at least 20 percent of the units for renters who make 80 percent of the area median income (AMI). But the AMI boundary is defined by the U.S. Department of Housing and Urban Development and includes wealthier suburban cities like the Grosse Pointes and Dearborn.

Someone in the 80 percent AMI bracket would make around $42,000, but Detroit’s median income is a little over $31,000 and the poverty rate is still 33 percent. That still leaves many Detroit residents severely rent burdened and paying 50 percent or more of their income on rent.

“For years, there was no economic diversity in this area,” Thorland says of Southwest Detroit. “The neighborhood was sustained by people of very limited economic means. When things get better and there’s more money flowing and more opportunity, it’s very unfair to think that the folks who put in all of the time, and money, and sweat to establish a neighborhood wouldn’t be a part of the growth of excitement of what’s going on today.”

Of the thousands of new residential units being built, only a handful offer rental rates at 60 percent AMI or lower. Projects developed by mission-oriented organizations like the Detroit Catholic Pastoral Alliance or East Jefferson Development Co. are aiming to keep their income requirements at 60 percent and in some cases as low as 40 percent AMI. Federal low-income housing is around 30 percent.

Meanwhile, the city may lose as many as 10,000 units because of expiring Low-Income Housing Tax Credits—it’s trying to raise $250 million to preserve and expand affordable offerings.

The math is complicated, and even more so because behind all of those numbers are real people. People like Lisa, and her little baby.

“Economic position, contrary to most opinion, is not a sign of motivation,” Henriquez says. “Some people can pull themselves out of poverty to wealth, but generally it is difficult and a lot of people rely on public systems that aren’t keeping pace with the public need.”