As development in Detroit continues at a steady pace, one of the more vexing questions is how to provide quality affordable housing to low-income renters. As construction costs continue to rise, baking in affordability into a development can be a challenge.
But several recent apartment openings show that it is possible, especially with the right kind of public-private partnerships, philanthropic support, and subsidies.
Here’s a roundup of all the recent affordable housing news.
For years, many second-floor residential units in the mixed-use buildings along West Vernor Highway remained vacant. The Southwest Detroit Business Association saw an opportunity to renovate those units, some of which are also on Springwells Street, and offer them at an affordable rate.
SDBA secured a $135,000 grant from The Kresge Foundation and worked with building owners to make the necessary repairs to 12 of those units. The grant covered about $8,500 per apartment, and the owners typically pitched in much more.
In a Detroit Free Press article about program, one landlord is leasing a one-bedroom for $750 a month.
“As you get closer to Corktown, some market forces may take over and incentivize the owners enough to do it on their own,” Greg Mangan, a real estate advocate at SDBA told the Detroit Free Press. “But over here, I think you still need some of that extra assistance.”
SDBA is looking to expand the program beyond the initial pilot stage.
An old North End apartment building with a long path to restoration is finally open and accepting tenants. The St. Rita Apartment at 35 Owen Street was constructed in 1916 and went vacant in the early 2000s. It was even on the city’s demolition list in 2008.
But after a $7.2 million redevelopment, the building’s 26 one-bedroom units will be exclusively reserved for “extremely low-income” renters—households making 30 percent or less of the area median income, or about $17,040 per year. Veteran tenants will get preference.
Rent will be based on income, and could range from $0 to $771 per month. According to the Detroit Free Press, “Those low rents are possible through the Project Based Voucher program that is administered by the Michigan State Housing Development Authority using federal funds. The building has no time limits for residency or any special house rules for tenants.”
Financing was put together through millions of dollars in low-income housing and historic tax credits, a $250,000 grant from the Home Depot Foundation, and $176,638 put up by the developer, Detroit Central City Integrated Health.
Thanks to years of disinvestment, Gratiot Avenue past Eastern Market has long stretches of vacancy. A new housing development looks to reverse that trend.
Work was recently completed on a $9.5 million mixed-use affordable housing development near the I-94 freeway. Crain’s Detroit Business reports that the 9100 On Gratiot Building will have 36 units, a mix of one and two bedrooms, with rates based on income.
The project was a partnership between MHT Housing Inc., one of the state’s biggest low-income housing developers, and the place-based nonprofit developer Detroit Catholic Pastoral Alliance. It was funded through federal low-income housing tax credits.
The Detroit Housing Commission’s new Project Based Voucher Program not only subsidizes rent for tenants, but those who live in the same unit for over a year are automatically eligible for a Section 8 voucher. That means that even if the tenant moves, they still retain the voucher.
All the units at 9100 On Gratiot have already been filled. O’Connor Real Estate is leasing the 10,000 square feet of commercial space.