City of Detroit Unveils $203M ARPA Fund Affordable Housing Strategy

The city of Detroit has announced a $203-million affordable housing plan that officials state will take major steps toward addressing housing insecurity using several new strategies, many funded by the city’s share of the American Rescue Plan Act funds.
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The new seven part plan is expected to open up opportunities for Detroiters to have better access to higher-quality affordable housing. // Stock Photo
The new seven part plan is expected to open up opportunities for Detroiters to have better access to higher-quality affordable housing. // Stock Photo

The city of Detroit has announced a $203-million affordable housing plan that officials state will take major steps toward addressing housing insecurity using several new strategies, many funded by the city’s share of the American Rescue Plan Act funds.

The plan was created over several weeks of meetings between Detroit Mayor Mike Duggan; city councilmembers Mary Waters, Angela Calloway, and Latisha Johnson; and Detroit housing staff. It includes seven new initiatives to increase the quality and accessibility of affordable housing.

The plan will convert long-vacant apartment buildings and land bank homes into affordable rental housing and provide additional housing support resources, mortgage down-payment assistance to increase home ownership, rapid placement for good-paying jobs, and more.

The $203 million investment is for 2022 alone and is on top of affordable housing initiatives already announced in the past and does not include future annual allocations for affordable housing and preservation in Detroit.

“We’ve been working tirelessly to create and preserve affordable housing in this city for years and prevent large-scale displacement of residents, as seen in other major cities,” says Duggan. “Despite the progress we have made, we needed to do more to address the need for quality and deeply affordable units.

“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. I believe the plan we have developed is one of the most comprehensive strategies for providing affordable housing in the country.”

Here is a look at the seven pieces of the plan:

Detroit housing services — $20 million in ARPA funds

A central Detroit Housing Services division will be established bringing a range of services to Detroiters most at-risk and in greatest need. This new division will 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 full range of programs, including housing counseling and foreclosure prevention services.

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

“The new Housing Services division will be building internal capacity to assist residents directly, and also working with our nonprofit partners to get more resources into the hands of more people who need them,” says David Bowser, associate director of housing and neighborhood services for the city’s Housing Revitalization Department (HRD).

“HRD is dedicated to not only creating and preserving affordable housing, but guiding Detroit residents to housing resources, addressing homelessness and the housing issues that could lead to homelessness, and making sure that residents are connected to the tools and assistance programs available to them.”

Detroit Housing Commission apartment building rehabs — $20 million in DHC funds

The Detroit Housing Commission (DHC) will use $20 million from selling the Brewster-Douglass site on acquiring 10 to 12 vacant apartment buildings in neighborhoods across the city, rehabilitating them, and then leasing units at deeply affordable rates of 30 percent area median income (AMI).

“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,” says Sandra Henriquez, CEO of the DHC.

Detroit Land Bank affordable home program — $3 million in ARPA funds

This initiative will begin with 20 to 50 Detroit Land Bank Authority (DLBA)-owned homes that will be sold to local community development organizations (CDOs), which will use city subsidies to rehab the properties.

The properties will then be rented for at least 10 years at 50 percent to 60 percent AMI, rates that are considered deeply affordable, with the option for the renter to buy the property and become a homeowner.

“The DLBA is excited to partner with the city and CDOs on this creative opportunity to add deeply affordable housing in Detroit’s neighborhoods,” says Tammy Daniels, CEO of the DLBA. “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.”

More affordable housing and expedited approval process — $132M in ARPA, state, and federal funds

The Detroit City Council will work with the HRD to streamline the process for council to approve affordable housing developments that include units to be rented at 60 percent AMI or below. The current process often requires nine steps or more to get Council approval. In addition to speeding up the process, the plan 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.

Down-payment and homeowner assistance programs — $13 million in ARPA funds

This program will help 600 Detroiters who currently rent 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.

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 so that Detroit renters get the quality units that they deserve and that the City requires. A

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.

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’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.

The HRD is on track to hit the Duggan administration’s goal of preserving 10,000 units of existing affordable housing and developing 2,000 units of new affordable housing. Since 2015, there have been more than 6,500 affordable units preserved and 1,400 that are new construction, with a vast majority of those being below the deeply affordable rate of 60 percent AMI. Of those units, 96 percent of the affordable preservation projects and 70 percent of new construction affordable units were at 60 percent AMI or below.

“Our ultimate goal is to ensure housing stability and security for all Detroiters, from homeowners and prospective homebuyers to renters to our most vulnerable residents, those experiencing homelessness,” says Julie Schneider, director of HRD.

“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. The $203 million affordable housing plan harnesses public funding and the collective power of partnerships to fulfill this mission.”

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