Detroit's new $203M housing plan will renovate vacant buildings, offer down payment help

Detroit officials announced a broad $203 million plan Thursday that aims to stabilize housing for city residents. 

Detroit City Council members joined Mayor Mike Duggan and nonprofit leaders to introduce the plan, which includes a range of programs, from renovating Detroit Land Bank Authority properties to offering down payment assistance to 600 Detroiters.

"We built a lot of affordable housing, we've converted a lot of vacant land bank homes, we've preserved every affordable unit we have, but there is no question, affordable housing is a more urgent issue than it has been in this city in many decades," Duggan said during a news conference in front of a city-owned building in the Dexter-Linwood neighborhood.

The building, which has been vacant for about a decade, is slated to become subsidized housing as part of the plan. 

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Many of the programs are backed by federal pandemic recovery aid the city received last year. The funding for the plan is through this year, Duggan said.

"There's going to have to be at least $500 million of public money over the next three years and a lot of private money to go with it," he said. 

The city of Detroit worked with Detroit City Council members Mary Waters, Angela Whitfield-Calloway and Latisha Johnson to develop the plan. During City Council meetings, residents had raised many housing concerns. 

"Affordable housing is more than a buzzword. It is the very livelihood for thousands of we Detroiters," said Whitfield-Calloway, who represents District 2. 

At-Large Councilmember Waters said one of the housing developments will be named after Ca'mya Davis, an 11-month-old who drowned in a flooded Detroit basement after falling through a hole in the floor. Davis' mother, Waters said, felt she had nowhere else to live. 

"We have a sacred duty to protect our babies, as we protect the health, safety and welfare of all the people of Detroit," Waters said. 

She said it's important for Detroiters to have housing available at their income levels. 

Sandra Henriquez, CEO of the Detroit Housing Commission — which is renovating 10 to 12 vacant buildings into subsidized housing — said she constantly gets emails from residents asking about housing options. 

"We're filling a niche that larger developers don't want to touch. ... They don't see it as profitable. So for us, this is filling in the neighborhood and helping to jumpstart redevelopment and revitalization of neighborhoods," she said. 

Julie Schneider, director of  the city of Detroit's Housing and Revitalization Department, called the plan "a comprehensive approach to housing stability" that seeks to connect residents with resources while also supporting the creation of new developments amid rising construction costs.

Affordable housing is an ongoing concern in Detroit. 

Roughly one-third of Detroiters missed at least one housing payment in the past year and about 39,000 households are spending more than half of their income on rent and mortgages, according to a survey of city residents conducted last year by the University of Michigan. 

That figure exceeds what the federal government considers affordable. The U.S. Department of Housing and Urban Development says that families spending more than 30% of their income on rent and utilities may have trouble paying other bills, whether that's food or medical care. 

Housing itself is also scarce. The Detroit, Warren and Dearborn areas alone need about 100,000 affordable rental units for extremely low-income households — or a family of four earning $27,750 — according to the National Low Income Housing Coalition. 

Here's a rundown of what the plan will include: 

• $132 million in American Rescue Plan Act (ARPA) and state and federal dollars will  fund 1,600 new housing units across 30 developments, 250 of which will be permanent supportive housing for Detroiters transitioning from homelessness. Many of these projects have already been announced. Rent prices at the income-based housing may range from roughly $850 to $500, said Donald Rencher, the city of Detroit's group executive for Housing, Planning and Development. The city of Detroit's Housing  and Revitalization Department, working with Detroit City Council, aims to "streamline" the process for approving affordable housing developments. 
• Twenty to 50 properties owned by the Detroit Land Bank Authority will be sold to local community development organizations tasked with rehabilitating them. They will then be rented for at least a decade  to those at 50% to 60% of the area median income. That translates to a three-person family earning between $40,300 and $48,360. The work will be backed by $3 million in ARPA funds. Repairs are slated to start in spring 2023 and the first homes may be available in winter 2023.
• $13 million in ARPA funds will go toward down payment assistance for 600 Detroiters, a third of whom will get dollars to own the homes they are currently renting. That may look like helping Detroiters with land contract agreements, Rencher said. The remaining residents will get the help to buy homes they aren't renting. The program is expected to launch in the fall. 
• A new Detroit Housing Services division, funded by $20 million in ARPA dollars, will serve as a central spot for residents to access housing help, such as housing counseling and foreclosure prevention assistance. It will include at least six neighborhood housing service centers run by nonprofits. A new hotline, slated to be available in the fall, will help Detroiters facing displacement or immediate homelessness. 
• The Detroit Housing Commission plans to renovate 10 to 12 vacant apartment buildings — using $20 million from the sale of the Brewster-Douglass site to Bedrock, which was finalized at the end of 2019— that will be set aside for a family of three making $24,180. The housing commission has identified four buildings so far, Henriquez said. Construction is expected to begin in the spring of next year.
• $5 million in ARPA dollars will be used to bring more than 1,000 rental units up to code. One program will renovate vacant second-story apartment units within commercial corridors into housing while another initiative will be for smaller landlords to get matching grants in order to bring their properties into rental compliance. A recent report from the University of Michigan's Poverty Solutions initiative found that about 6% of Detroit’s approximately 87,000 rental properties had a certificate of compliance, as of March 15. 
• $10 million in ARPA funds will go toward the city's Detroit at Work program helping residents with immediate job placements or GED and literacy programs. 

Lisa Johanon, interim director of Central Detroit Christian Development, said her organization has houses in line that are "shovel ready" now that this funding is available. 

Detroit received $826 million in ARPA dollars — the fifth largest amount among American cities. Of that, $400 million was set aside to address budget shortfalls, while the remaining $426 million was designated for community investments, such employment and job creation, blight remediation and home repairs. 

Nushrat Rahman covers issues related to economic mobility for the Detroit Free Press and Bridge Detroit as a corps member with Report for America, an initiative of The GroundTruth Project. Make a tax-deductible contribution to support her work at bit.ly/freepRFA.

Contact Nushrat: nrahman@freepress.com; 313-348-7558. Follow her on Twitter: @NushratR. Sign up for Bridge Detroit's newsletter. Become a Free Press subscriber.