Mayor Duggan and KeyBank announce $10M commitment to preserve and create affordable housing

Mayor Duggan and KeyBank announce $10M commitment to preserve and create affordable housing

  • The LISC Detroit-managed Detroit Housing for the Future Fund launched last year and has now raised $65.5 million of its $75 million goal.
  • DHFF helps close financing gap for developers building new or preserving existing affordable housing units in the city.
  • Sixth DHFF project, The Weber, representing 44 units of affordable housing, also announced.

DETROIT – LISC Detroit and Detroit Mayor Mike Duggan announced today a $10 million investment from KeyBank Community Development Lending and Investment (CDLI) toward the creation and preservation of affordable housing in the city through the Detroit Housing for the Future Fund (DHFF).  

The DHFF, which was announced by Mayor Duggan in 2020, represents the largest single private commitment to affordable housing in Detroit’s history. The DHFF is a private investment fund managed by LISC that is committed to investing private capital into affordable housing projects in need of gap financing to move the developments forward. With a sixth project also announced today, DHFF projects representing about $40.7 million in total development costs, with a combined DHFF investment of more than $12.7 million, have been approved since the fund’s launch in the fall of 2020. Together, the deals represent the creation or preservation of a combined 224 units of affordable housing in neighborhoods across the city. The DHFF is a part of the larger Affordable Housing Leverage Fund, which is an initiative of the City of Detroit’s Housing & Revitalization Department.

“KeyBank is committed to the communities we serve. This investment is a key part of our efforts to create more strategic partnerships with Community Development Financial Intuitions across the nation and build on the success of our National Community Benefits Plan,” said Derek Reed, vice president of KeyBank CDLI. “We are proud to help LISC Detroit and the City of Detroit with their shared goal of creating and preserving affordable housing, and to making sure that no one is left behind as Detroit continues its latest renaissance.”  

“Leading change for the better and being a responsible corporate citizen is at the heart of KeyBank’s purpose in Detroit and all of the communities we serve,” said David Mannarino, KeyBank Michigan Market president and commercial sales leader. “We look forward to continuing to support affordable housing and community development projects, small business and home lending in low- and-moderate income communities, and philanthropic efforts targeted toward education, workforce development and creating safe, vital neighborhoods.”

The Duggan administration has made affordable housing a top priority as it works to help Detroiters stay in their homes amid increasing rents as the city’s turnaround continues. The administration set a goal of preserving 10,000 units of existing affordable housing and the development of 2,000 units of new affordable housing through multiple public and private housing initiatives including DHFF. As of today, nearly 1,300 new affordable housing units have opened or are under construction in the city while nearly 5,700 existing affordable units either have had their affordable rents extended for another 15 to 30 years or are in the pipeline to have them extended.

“We are seeing major progress in neighborhoods across the city, but we have to ensure that all Detroiters can benefit from our city’s comeback, especially those who stuck with the city during its toughest times,” said Mayor Duggan. “KeyBank’s generous commitment helps ensure that all Detroiters, no matter their income, will have the opportunity to live in quality housing and in any neighborhood they choose.”

That commitment to community lines up with one of KeyBank’s main missions. KeyBank has a long history of lending, investing and providing charitable support in Detroit and Michigan. Since 2017, KeyBank has invested more than $152 million in its Michigan Market through its National Community Benefits Plan. Highlights include:

  • A $300,000 grant to Michigan Ability Partners to support homeless veterans.
  • $17.4 million in financing through KeyBank Community Development Lending & Investment for Selinon Park Apartments in Portage, a 75-unit affordable housing complex targeted to serve people with special needs or those experiencing or at risk of homelessness.

“The affordable housing shortage is one of the biggest issues facing our city right now,” said Tahirih Ziegler, Midwest Program vice president of LISC. “KeyBank’s $10 million contribution will go a long way in helping us to make a more equitable Detroit and provide quality affordable housing for Detroiters. LISC believes that all Detroiters, regardless of their economic means, deserve to live in quality affordable housing and that affordable housing is key to ensuring Detroit remains a place for all.”

Sixth DHFF project announced

In addition to the $10 million investment by KeyBank CDLI, LISC Detroit also announced today the sixth project to tap the fund.

The Weber Apartments, a currently vacant historic apartment building at 655 Hazelwood St. in the Piety Hill neighborhood, will be completely renovated. The Weber, built in 1927, will feature 44 units and be 100 percent affordable housing, with six apartments at or below 50 percent area median income (AMI) and the remainder at or below 80 percent AMI. This translates to rents between $750 and $1,200 a month for one-bedrooms.

The developer, Hazelwood Partners LLC, received a $2.9 million loan through DHFF for the $4.4 million project. The renovations are expected to be completed late this summer.

Weber1
The historic Weber Apartments, at 655 Hazelwood, will receive a $4.4 million renovation. All 44 of its apartments will be offered as affordable housing thanks to the Detroit Housing for the Future Fund.

 

Weber2
The Belnord, at 324 Hendrie in Midtown, will receive a $2.9M renovation. The project will wrap up this year. 29 apartments will be offered as affordable housing thanks to the Detroit Housing for the Future Fund.

 

How DHFF works

Developers, especially housing developers, often have difficulty finding capital to finance gaps in development or redevelopment costs. The DHFF helps fill that gap by providing access to capital and financial products specifically designed to address the challenges affordable housing developers face.

The DHFF invests in the preservation of regulated and naturally occurring affordable housing (NOAH) units throughout the City to keep them affordable, as well as the development of new mixed-income and affordable housing in targeted multi-family housing areas. The DHFF primarily finances housing that is affordable to households at or below 60 percent of area median income (AMI), but will give priority to projects with lower incomes in order to direct the funds where the need is greatest. For example, 60 percent of AMI for an individual is $33,600, and $48,000 for a family of four.

The fund also has a mission of helping minority developers participate in the city’s turnaround through the Developers of Color Predevelopment Matching Grant Fund. This is a key goal because developers of color are currently underrepresented in the Detroit’s growth and revitalization efforts. By helping finance their developments, LISC Detroit are not only creating affordable housing but equity in development. Developers can go to www.detroithousingforthefuturefund.org to apply or learn more about the DHFF and Developers of Color Fund.

About KeyBank

KeyBank's roots trace back nearly 200 years to Albany, New York. Headquartered in Cleveland, KeyCorp is one of the nation's largest bank-based financial services companies, with assets of approximately $187.0 billion at September 30, 2021. Key provides deposit, lending, cash management, and investment services to individuals and businesses in 15 states under the name KeyBank National Association through a network of more than 1,000 branches and approximately 1,300 ATMs. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade name. For more information, visit www.key.com. KeyBank is Member FDIC.

About LISC and LISC Detroit

LISC Detroit is a local organization founded in 1990, within the Local Initiatives Support Corporation network that includes 38 offices in urban areas across the country as well as a rural office that serves more than 44 states. National LISC, founded in 1980, is the largest national community development financial intermediary, combining corporate, government, and philanthropic resources to help community-based organizations revitalize their neighborhoods. LISC’s mission is that every low-income community has the chance to thrive. LISC equips struggling communities with the capital, strategy and know-how to become places where people can thrive. Working with local leaders we invest in housing, health, education, public safety and employment — all basic needs that must be tackled at once so that progress in one is not undermined by neglect in another. Sharing our expertise of 41 years, we bring together key local players to take on pressing challenges and incubate new solutions. With them, we help develop smarter public policy. Our toolkit is extensive. It includes loans, grants, equity investments and on-the-ground experience in some of America’s neediest neighborhoods. For investor inquiries and more information, visit www.liscstrategicinvestments.org/detroit-housing-for-the-future-fund.