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Mayor launches city’s largest-ever affordable housing fund with JPMorgan Chase, LISC & others
Mayor Mike Duggan joined leaders from Local Initiatives Support Corporation (LISC) and JPMorgan Chase today to celebrate the launch of the Detroit Housing for the Future Fund (DHFF), a public-private partnership aimed at directing $75 million in private capital to affordable housing in Detroit. The Detroit Housing for the Future Fund launches with an initial capitalization of $48 million, anchored by a $15 million commitment from JPMorgan Chase and a $10 million guarantee from The Kresge Foundation.
The DHFF aims to address housing instability in the city by filling the funding gap that limits developers’ ability to preserve and create much-needed affordable housing. Developers often have difficulty bridging the funding gap between redevelopment costs and the income they will receive from tenants. This fund will provide developers and owners of affordable housing with streamlined access to financial tools that are specifically designed to address housing challenges in Detroit neighborhoods.
“We’ve seen the mass displacement of longtime, lower-income residents that occurred in places like Washington, DC, Brooklyn, Philadelphia and others because as they redeveloped, they didn’t have a plan to preserve affordability and protect these residents,” said Mayor Mike Duggan. “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.”
This Fund represents the privately funded portion of the larger affordable housing initiative announced as part of the City’s Affordable Multifamily Housing Strategy in 2018. The City of Detroit made a $50 million commitment as part of the initiative and has committed $12.2 million to date into the development of 424 units of affordable housing. The Affordable Housing Leverage Fund also includes the goal of directing $75 million in investment through the Michigan State Housing Development Authority.
$48 Million committed, goal is $75M
JPMorgan Chase announced a commitment of $15 million to the fund, including $12.5 million in low-cost loans and a $2.5 million philanthropic investment. An additional $15.5 million in low-interest lending has been committed by Flagstar Bank, Citizens Bank, and First Independence Bank. The Kresge Foundation has committed a loan guarantee of $10 million. Previously announced commitments totaling $17.5 million were made by Blue Cross Blue Shield of Michigan, Fifth Third Bank, Flagstar Bank, TCF/Chemical Bank, Ford Motor Co., Penske Corp. and Huntington Bank. Since 2014, JPMorgan Chase has committed $200 million to Detroit’s economic comeback and helping Black Detroiters achieve economic mobility, from boosting minority-owned small businesses, creating and preserving affordable housing and improving access to home ownership and job training to prepare residents for the future of work.
“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. “We are proud to work with Mayor Duggan and LISC to address the serious challenges of affordability and unlock opportunity for more Detroiters as part of our $200 million commitment to Detroit’s recovery. We hope our investment will bring other organizations to the table to invest in this city’s future.”
How the DHFF will work
The DHFF will be managed by LISC, which for more than 30 years has been dedicated to helping revitalize the city’s neighborhoods by working with local leaders to invest in housing, health, education, public safety and employment. The organization is part of the Local Initiatives Support Corp. network, which is the largest nonprofit community development financial institution in the country.
“Affordable housing is essential for creating vibrant communities that are home for Detroiters of all walks of life,” said Tahirih Ziegler, executive director of LISC Detroit. “The affordable housing shortage is one of the biggest issues facing our city right now, and the time to address it is now. We are incredibly thankful to the corporate partners who stepped up to help us and answered our call as we work together to make a better, more equitable Detroit.”
“To catalyze opportunity throughout Detroit’s neighborhoods, it is vital that we bridge capital gaps so that local developers and nonprofits can build high-quality homes that people can afford,” added Maurice A. Jones, LISC president and CEO. “The DHFF is helping open new doors for hundreds of families and, in the process, creating community assets that fuel jobs, nearby businesses, improved health, safe streets and long-term growth. The ripple effect is enormous.”
The Duggan administration has made affordable housing a top priority as it works to help Detroiters stay in their homes amid increasing rents. 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.
“Housing is a foundation for stability in a person’s life. Ensuring that Detroiters have access to housing that is quality, safe and affordable is one of our department’s biggest goals,” said Julie Schneider, deputy director of the Housing & Revitalization Department, who has led the development of the fund. “The Detroit Housing for the Future Fund will be a key piece to tackling inequality and housing instability in our city. I would like to thank LISC and the fund’s corporate givers for helping us work toward a better Detroit for all Detroiters.”