The city of Detroit is partnering with a number of community developers, service providers, and other experts as part of its effort to improve the stock and preserve existing affordable housing.
The initiative, called the Preservation Partnership, formalizes the process launched with the city’s Multifamily Affordable Housing Strategy in 2018. Mayor Mike Duggan vowed to raise $250 million to preserve around 10,000 affordable units across the city.
The partnership is comprised of six organizations, each with a different role. Enterprise Community Partners, an affordable housing financer, will lead the team and plan implementation; United Community Housing Coalition, a housing assistance organization, will provide tenant representation; and Cinnaire and CHN Housing Partners, community development financial institutions, will assist developers looking to manage affordable housing. Other partners include Data Drive Detroit, Elevate Energy, and Community Investment Corp.
The new partnership will continue to identify at-risk properties ahead of when they’re set to expire, then work with the owner to develop plans to maintain their affordability.
“Here’s the problem: rents in the city continue to rise, which means these deals get harder to make every year because the incentives to remove low-income folks get more profitable,” Duggan said at a press conference announcing the partnership. “We said, ‘To save [more affordable units], we need a little help.’”
Many Low-Income Housing Tax Credits (LIHTC) are tied to 15 or 30-year timeframes, after which the building owner can opt not to renew and replace the affordable units with market rate ones. The city identified around 10,000 affordable units set to expire by 2023. Duggan said it’s gotten long-term commitments from owners to preserve affordability for about 4,000 of those units.
Funds to support the program will come from a range of sources: the city’s Affordable Housing Leverage Fund, Michigan State Housing Development Authority tax credits, HUD home funds, and more.
Donald Rencher, director of the city’s Housing and Revitalization Department, said many of these owners may want to keep the properties affordable, but don’t know how to access resources or have the funds to make necessary repairs. “How do we connect them to buyers, to subsidies, and walk them through the process,” he said.
He added that while there’s a range of incomes that qualify as affordable, most of the units are for those making between 30 to 60 percent of the Area Median Income (around $15,000 to $30,000 per year).