A collaboration between public and private bodies has raised $48 million for affordable housing development and bolstering equity among minority residents in the city.
Building on a partnership from previous years, the city of Detroit is bolstering more avenues for keeping housing costs down for low-income earners with a goal of raising $75 million in private capital for affordable housing.
"Housing is much bigger than housing," said Maurice Jones, CEO, and president of the Local Initiatives Support Corporation.
One of the largest builders of affordable housing in the country, Jones said they'll be offering an array of opportunities to aid developers to finance housing investment. That includes low-interest loans, permanent loans, grants for minority developers, and assistance with capital needs.
"(We're trying) to fill niches in the market to get preservation work done here," he said.
Additionally, JPMorgan Chase is committing $15 million and the Kresge Foundation is adding $10 million into the Detroit Housing for the Future Fund (DHFF).
“What you’re seeing here today is a historic commitment by the city and its partners to make sure we are building a city where Detroiters of all income levels can afford to live in any neighborhood they wish,” said Duggan.
At the core of Detroit's systemic housing problems is a widening gap between the money that developers must make on renting out housing and the available income Detroit residents have to pay that rent.
As more income goes to housing, less money becomes available to pay for all of life's other amenities. The COVID-19 pandemic has likely increased those pressures.
Sonya Mays, who leads Develop Detroit says this is the biggest barrier in her effort to keep housing affordable. Which is why the new money will aid her efforts, making development and preservation faster.
"This new fund allows us to double our capacity for preservation," she said.
Since 2018, the city has embarked on an effort to preserve 10,000 affordable units and build 2,000 more. So far, it's committed $12.2 million of a $50 million promise, building 424 new units.
JPMorgan intends to offer $12.5 million in low-cost loans and an additional $2.5 million in philanthropic investment. Other banks are also offering more than $15 million in low-interest loans as well.
“Housing is foundational to Detroit’s revitalization, yet access to quality, affordable housing is out of reach for too many residents, particularly Black Detroiters,” said Peter Scher, Head of Corporate Responsibility, JPMorgan Chase.
However, the groups are still in need of $27 million in additional capital. Jones asked if any other groups were interested in joining the partnership to contact them.
The LISC will manage the fund. Any developers who want to learn more about opportunities for acquiring a loan can go to detroithousingforthefuturefund.org to learn more.