City secures $12.1M to ensure 486 affordable housing units jeopardized by rising construction costs will be completed

City secures $12.1M to ensure 486 affordable housing units jeopardized by rising construction costs will be completed

• Hundreds of badly needed affordable units already in various stages of development or construction were at risk of stopping or scaling down due to escalating construction costs.
• Supplemental Low Income Housing Tax Credit awards from MSHDA ensure these affordable units will be finished and made available to lower-income Detroiters.

DETROIT – Almost 500 units of badly needed new affordable housing in the city that were at risk of not being completed due to rising construction costs will now get built, thanks to $12.1 million worth of additional support the City of Detroit helped secure from the Michigan State Housing Development Authority (MSHDA), Mayor Mike Duggan and state officials announced today. 

Six major housing developments in the city were at risk of either being put on hold or scaling back the number of affordable units from what they had originally planned. To cover those surging construction costs, the City and the developers requested additional Low Income Housing Tax Credits (LIHTC) from MSDHA, which had previously supported these developments with earlier LIHTC awards.

“One of the most urgent needs in our city right now is for more units of affordable housing to make sure every Detroiter has a quality place to live at a price they can afford,” said Mayor Duggan. “Just as we all see rising costs at the grocery store and gas pump, construction companies that build affordable housing are being faced with higher construction costs. We are deeply grateful to our partners at MSHDA and Governor Whitmer’s administration for recognizing the importance of these projects and supporting them so that they can move forward.”

The six projects that can now proceed thanks to this additional funding are:

                                                                         Affordable          Value of supplemental

Project                                                            units                      LIHTC allocation

7580 E. Jefferson                                                 150                             $2,027,756

Brush Watson                                                      160                             $3,781,907

Left Field                                                                 48                             $3,390,559

Ruth Ellis Clairmount Center                            42                             $691,900

Anchor at Mariners Inn                                       44                             $1,372,800

La Joya Gardens                                                    42                             $876,474

TOTAL                                                                  486                         $12,141,397

The announcement comes at a time when the need for affordable housing units is increasing in Detroit.  

"Like nearly every urban core across the country, Detroit is in the midst of a housing crisis disparately impacting our most vulnerable residents. The crisis is being exacerbated by rising construction material and labor costs so today's announcement and efforts of MSHDA and Governor Whitmer's administration through $12 Million in Low Income Housing Tax Credits to address the problem is welcomed news and will directly improve the quality of life for thousands of Detroiters," stated City Council President Mary Sheffield. "While I am continuing to focus on reducing the need for affordable housing by ensuring residents can make a living wage and prosper, I remain cognizant of the realities of our housing crisis and I am committed to solving the problem." 

The LIHTC tax credits are an invaluable tool in helping the city provide affordable housing options for residents. Last week, Mayor Duggan and Councilmembers Latisha Johnson and Mary Waters joined with MSDHA officials to announce LIHTC credits to allow 183 units of deeply affordable housing to be built across four city neighborhoods.  Over the past five years, state LIHTC awards have helped the city to build or preserve the affordability of nearly 2,000 affordable housing units across Detroit. 

“MSHDA and the Whitmer administration know that these supplemental awards are necessary in order to keep affordable housing development moving by filling in the funding gaps created by increased construction cost and supply chain issues," said MSHDA Rental Development Director Chad Benson. “We also know that there is an urgent need for more affordable housing in our state, so MSHDA is doing what it can to get see these projects through to the finish line.”

American Community Developers (ACD) is building the largest of these projects, Brush Watson in Brush Park. The development is planned to have 160 out of 308 units as affordable housing, more than 50 percent. Under City ordinance, developments that receive financial support through the city are required to reserve 20 percent of the units for individuals earning below the area median income (AMI). All of the affordable units at Brush Watson will range from 30 percent to 80 percent AMI. Thirty-eight units will be at 30 percent to 50 percent AMI, considered deeply affordable, with rents as low as $503 a month for a one-bedroom.

“These projects were at risk given the increase in construction costs,” said Jerry Krueger, president of ACD.  “It would have been devastating if we had not received the additional assistance. We are so grateful for the support we received from MSHDA and the City, so that we can keep our promise to set aside half of the units in this new development as affordable housing.”

Completion of these 486 units will help get the City closer to its goal of building 2,000 new units of affordable housing and preserving another 10,000 existing affordable housing units that were or are at risk of converting to market rate.

“MSHDA has remained a key partner in our goal of building a Detroit where everyone can afford to live in quality housing,” said Julie Schneider, director of the Detroit Housing & Revitalization Department. “We thank MSHDA for helping all of these projects continue to move forward and bring 486 more units of affordable housing at a time of such great need.”

Other projects receiving supplemental awards are:

• Anchor at Mariners Inn, which will provide 44 units of permanent supportive housing for formerly homeless individuals. Expected to break ground by the end of the year.
• Ginosko Development’s 7580 E. Jefferson project, which will bring 150 units at or below 60 percent AMI to the Strategic Neighborhood Fund’s Islandview/Greater Villages community. Expected to break ground later this year.
• La Joya Gardens, an SNF project in Southwest Detroit that will bring 53 units of housing, including 42 units as low as 40 percent AMI. Expected to break ground later this year.
• Left Field, an ACD development at the former site of Tiger Stadium, adding 48 units of highly sought-after affordable housing to Corktown. Expected to break ground next month.
• The Ruth Ellis Clairmount Center in Piety Hill, which will provide safe haven and 42 housing units for at-risk LBGTQ+ youth. Expected to open this fall.

“I am thankful that Mayor Duggan, his administration and MSHDA recognize the important need to combat rising housing costs in the city of Detroit,” said Amin Irving, president and CEO of Ginosko Development. “The reality is that overcoming the complex barriers to safe, healthy, affordable and accessible housing for all requires coordinated action and new approaches.

“Mayor Duggan’s affordable housing plan, along with MSHDA’s supplemental LIHTC funding, sends a clear message that affordable housing matters.”