Detroit gives tax breaks to keep affordable housing

Image 1 of 3

Any Detroiter knows the magic of this new renaissance happening, is most pronounced downtown - and in certain neighborhoods and has started to balloon across the city.

The objective is avoiding the dreaded "g-word" - gentrification. Ultimately as rents rise, will some people's fortunes fall.

"We can't grow the population of the city without retaining every resident who is here and wants to stay," said Arthur Jemison.

FOX 2 sat down with Jemison, the director of Detroit's Housing and Revitalization Department, to understand how the city plans to tackle keeping the city a place that's affordable to live in - while it grows.

"I think what we're trying to do is identify every property where we could execute a preservation strategy effectively," said Jemison. "Taking steps to make sure that the steps to make it affordable either because they are regulated or just in the market. We are taking steps to make sure that the regulations that require units to remain affordable continue for another 30 years."

The city actually has a list Jemison says, there are about 20,000 regulated affordable housing units in Detroit. About half will expire in the next five to seven years.  So they're scratching some of their items off the list so to speak, by making deals to keep affordable housing that was set to expire.

Here are two examples:

Forty Davenport - you might remember as Milner Arms Apartments, is getting a face lift.

The city made a deal with the developer to contribute 450,000 to rehabbing the $12-million project and is giving it some tax breaks also called tax abatements.

This will make sure residents who qualify pay a one-time 5 percent increase in rent. But after that, the deal is, rates will not increase more than one percent per year.

Average affordable rents in the building is about $600.

Cathedral Tower Apartments -  was also targeted by the city, because of expiring affordable housing units. But a deal here also preserved all of the affordable housing. 

"We're going to make sure we use every instrument in our toolbox to make sure that you preserve all those units and we are going to provide resources to you to make sure those resources are preserved and continue to serve affordable households.

The tools also include not just the city money, but federal housing, urban development funds, and state money as well.

But right outside of Cathedral Towers where the city is working on preservation, some Detroit residents still feel like finding an affordable place to live in midtown and downtown is tough.

"Some of them are really expensive," said Natalie Turner, "Like $800 or more for just a one bedroom (unit), especially to find a real nice apartment. You really just have to find one in your budget that hopefully is roach free."

The city says it's doing what it can. In 2017, about 750 units went into the preservation process but the question is, is it enough?

The city decided that if a developer wants discounted land or receive subsidies from the city, they have to make 20 percent of their project affordable housing. It is a way to insure that every Detroiter has an opportunity to stay in the city - if they want."