The first project backed by a$75 million private investment fund, created two years ago to help developers build more affordable housing in Detroit, opened Wednesday near the Boston Edison neighborhood.
City officials joined developers at The Charlotte, a formerly vacant three-story building from the early 20th century. The renovated apartment building has 28 units with rent prices that start at $725 for a studio apartment to $1,400 for a two-bedroom apartment.
The redevelopment — which cost $3.19 million — joinssix other projects in the Detroit Housing for the Future Fund pipeline. Developers were able to get a $2.55 million loan through the fund, managed by the Detroit branch of the Local Initiatives Support Corporation.
The Detroit Housing for the Future Fund launched in September 2020 and offers developers low-interest loans, private grants and other financial tools to build affordable housing.
“As we prepare for life post pandemic, there are many Detroiters who were housing insecure before the pandemic who are further set back … by the event and becoming even more vulnerable, and creating long-term affordable housing is foundational to ensuring healthy places for families to thrive and grow,” said Camille Walker Banks, executive director of Detroit LISC at a Wednesday news conference in front of the Charlotte.
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She said the fund has supported 269 units that are completed or in progress, with 246 units set asidefor people who earn less than 80% of the area median income. In the metro Detroit area, that translates to $64,480 annually for a three-person household as of April 2022.
“There were questions about whether or not this would be successful, questions about whether or not leveraging private capital for the mission of affordable housing worked. I think we’ve answered those questions. It’s working. Money is flowing out to the communities that need it,” said George Ashton, president of LISC Fund Management.
Developers who want to tap into the fund have to commit to at least 80% of the area median income (AMI), but the “sweet spot” is between 40% to 60% AMI (or a three-person household making between $32,240 to $48,360), Banks said.
Earlier this week, developers started renovations for another project on Mound Road with a loan from the fund.
Julie Schneider, director of the City of Detroit’s Housing and Revitalization Department, said that the goal of the fund was to expand the ways affordable housing was created, that wasn’t dependent on scarce federal funding. Every year, the city gets about $5 million to $7 million from the U.S Housing and Urban Development, but it costs about $350,000 to develop an affordable housing unit, she said.
Mayor Mike Duggan said the apartment sat empty for a decade.
“Every single time we take one of these vacant apartment buildings and turn it into affordable housing, we’ve strengthened the entire neighborhood,” Duggan said. The city, he said, is cataloging vacant apartments buildings that officials believe are salvageable.
Seven years ago, the building at 10210 Second Ave. at Glynn Court was run down and on the city’s demolition list, said Adam Noel, one of the developers of Charlotte Detroit LLC.
“When we looked at it, we realized that this was probably too big of a project for us. But after a couple of years and some hard work in getting our hands dirty and learning how this is done, we’ve continued to build our group and our rolodex of great high quality contractors to rebuild this project, for this community,” Noel said.
Now, the building touts a new roof and windows, along with granite countertops, new appliances and on-site laundry facilities. Currently, 21 units are available, Noel said. For more information, got to timelesspropertiesdetroit.com or check Zillow.
Cheryl Anderson, a 22-year-old Wayne State University student who also works full time, is among the building’s first tenants.
Anderson grew up on the east side of Detroit, near 7 Mile and Schoenherr, and thought she would have to move somewhere far to start her life, to find a place that was nice and affordable, she said.
“Even within the city of Detroit, you have so many homes that are like outdated or overpriced and this building specifically is neither one of those,” said Anderson, who moved in last month.
She pays about $950 a month on rent for her new one bedroom. Previously, she was paying about $750 in the downtown area for a studio that needed updating, she said.
“Since I moved into this building, it’s been a peace of mind for me,” she said.
A shortage of affordable housing in Detroit has become a crisis, experts say.
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 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.
Affordable housing options are also limited across the state.
Michigan needs more than 200,000 affordable rental units for extremely low income households, or a family of four earning $27,750, according to the National Low Income Housing Coalition. The Warren and Detroit area alone needs about 100,000 units. Seventy-one percent of extremely low-income families have a “severe cost burden,” meaning they spend more than half of their income on housing costs.
Nushrat Rahman covers issues related to economic mobility for the Detroit Free Press and BridgeDetroit 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.
Read More:First project supported by Detroit housing fund opens
2022-10-05 21:19:28
