Editor’s note: The email version of today’s newsletter incorrectly used a photo of Brandon Reed from the Michigan Black Business Alliance instead of Chase Cantrell, executive director of Building Community Value, who spoke during public comment about fast track tax breaks.

Welcome back. I’m still Malachi Barrett.

The council approved a new ordinance that reforms rental compliance, lead safety and tenant escrow regulations.

City officials said the changes will improve the quality of housing and increase compliance with city laws.

Landlords must obtain a certificate of compliance before allowing the property to become occupied and collect rent. Certificates last three years and can be extended.

The city has struggled to enforce compliance with blight tickets. Only 10% of rental homes have currently passed required inspections.

Council Member Mary Waters said the ordinance was in response to the death of Ca’Mya Davis, an 11-month-old who fell through the floor of a Detroit home and drowned in standing water.

Reforms are meant to make it easier for good landlords to provide safe, quality housing while holding bad landlords accountable. The ordinance takes effect on Jan. 1, 2025 and will be rolled out next spring.

Council Member Latisha Johnson was the lone no vote.

Johnson, whose late brother was exposed to lead as a child, worried that lead inspections would be less effective under the changes. Similar concerns were raised in past discussions.

Andrea Taverna, director of policy and implementation for the mayor’s office, said the ordinance ensures a review of housing conditions and lead safety for every rental property.

Visual inspections of lead paint would be followed with dust wiping tests. The city is also planning lead testing in census tracts with high lead levels.

She said the city is following best practices used in other cities to reduce lead exposure, and cited endorsements from the Get the Lead Out Detroit Coalition and other groups.

“The biggest thing the administration can do to be more proactive in lead prevention is having a functional rental inspection system that gets into homes and identifies the risks,” she said.

Lyke Thompson, director of the Center of Urban Studies at Wayne State University, argued that visual inspections are unreliable and are “likely to lead to more children being lead poisoned.”

The ordinance streamlines the inspection process and cuts an annual fee for landlords from $1,000 to $150. The inspection process would focus on 15 key health and safety issues that address home conditions and lead safety.

Lead paint inspections are required for properties built before 1978. Dust wipe samples are collected from the bedroom and living room and tested by a laboratory.

When a child under age six has an elevated blood lead level, an emergency order is triggered requiring a risk assessment and inspections.

Council Member Gabriela Santiago-Romero said she plans to amend the ordinance to require lead testing across the entire city within six years.

Tenants of a property that lacks a certificate of compliance can pay rent into an escrow account set up by the city. Renters can keep the money in their escrow account if the landlord doesn’t obtain compliance or fix violations.

The escrow program was expanded to include tenants in multi-family housing. Responsibility for the program will transfer to the housing department.

The ordinance also prohibits landlords from retaliating against tenants that identify compliance issues or enter an escrow program. Landlords can’t terminate leases to avoid compliance. 

The ordinance increases civil fines for various violations. The city can file a lien against the property if a landlord doesn’t pay fines within 30 days.

City officials are also empowered to order a building to be vacated if it’s found to be uninhabitable.

Matt Kreis, general counsel with the Center for Community Progress, said the city’s compliance is too complicated and costly for landlords working in good faith, while bad landlords easily evade enforcement.

Kries said the city has overly relied on using blight violations to promote compliance. He said a new approach is needed to rental regulations.

Taverna said the new policy is “as close to a win-win as I’ve seen in my career” and will “result in a stronger rental landscape for the city.” 

Council Member Scott Benson said there’s a large number of residents who don’t have legal leases. The housing department is using federal pandemic funds to train landlords on compliance, reducing lead hazards and other best practices. A fiscal impact report showed the city will need to hire three additional inspectors and three staff members to manage the escrow program by fiscal year 2027.

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What page are we on?

Today’s notebook covers the Oct. 29 formal session. Council Member Angela Whitfield-Calloway was absent.

Dig into the agenda, read Detroit Documenter notes or watch the recording for more details.

The council is canceling its Nov. 5 formal session to recognize Election Day.

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Surf these headlines I’ve been reading: 

• New garden on Belle Isle is finally finished 
• Belle Isle Advisory Committee to discuss proposal for saving boathouse 
• Duggan isn’t raising money for mayor in 2025 
• Interim police chief ‘confident’ he’ll get the permanent job
• Thanedar aide files age discrimination lawsuit

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Three new parks over I-75? 

It’s the end of the beginning for a long process to cover parts of I-75 with new public spaces. 

The Downtown Detroit Partnership, Michigan Department of Transportation and city of Detroit received federal funds to study a highway cap over I-75 between Third Street and Brush Street. 

After Tuesday’s council meeting I visited the third, and likely final, public feedback meeting of 2024. Design meetings will continue into 2025. 

The plan is nowhere near complete, but residents saw a concept for three caps over key intersections. 

Three caps are proposed around Grand River, Woodward, and the John R/Brush area, each tailored to different community needs. 

Amenities under consideration include outdoor fitness stations, playgrounds, charging stations, seating and pavilions, food retailers, public art installations. The cap areas will be varying sizes comparable existing parks like Grand Circus and Campus Martius. 

The project aims to improve pedestrian and bicycle routes, create new parks and recreation space and repair historic planning decisions that harmed Black neighborhoods.

It will likely align with other efforts to reconfigure I-375 and investments like the University of Michigan Center for Innovation and District Detroit. 

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Fast track tax breaks approved

The City Council unanimously approved a new ordinance to speed up the process of providing tax incentives to create affordable housing.

Instead of paying property taxes, qualifying developers will pay service charges based on rental rates. Developments must be certified with the city and in compliance with rental regulations.

A developer must provide affordable housing for up to 15 years.

Dozens of developers and representatives of nonprofit organizations voiced support for the ordinance. They said it will help smaller developers finance projects for low-income residents and prevent displacement.

“If you’re listening to us and you are a small or minority developer, we are creating a tool for you,” said Council Member Fred Durhal III.

Durhal, who championed the ordinance, said it will create more housing for middle-income working people who struggle to pay rent.

Housing projects in renovated vacant buildings can receive a tax break if rent is affordable for someone earning 120% of the area median income for the Detroit metro area. That equals $2,160 for a one-bedroom unit and $2,592 for a two-bedroom unit.

Larger tax breaks are available to new housing projects and rehabilitated vacant structures that offer deeper levels of affordability. Developers are required to invest at least $15,000 per new unit to receive the tax discount.

Tax discounts are available for housing that offers units that are affordable for people earning 80% or less of the area median income. That equals $1,440 at most for a one-bedroom unit and $1,728 for a two-bedroom unit.

The ordinance defines “persons of low-income” as those earning 80% or less of the area median income, which is $69,120 for a family of three and $53,760 for a single person.

A 2023 market study by the city found a growing number of low-income households are cost burdened.

Projects that offer rent at up to 60% of the area median income can receive an even larger discount. That equals $1,080 at most for a one-bedroom unit and $1,296 for a two-bedroom unit.

Council members said Detroit needs more housing for the lowest-income residents who earn 30% of the area median income. That’s $20,160 for a single person and $25,920 for a family of three. 

Chase Cantrell, executive director of Building Community Value, said the new subsidies will help small-scale developers who want to keep rent low for their neighbors.

Sonya Mays, founder of Develop Detroit, said nonprofit developers are facing challenges with high costs and property taxes, necessitating support from the city.

Matt Corbin, with the Central Detroit Christian Community Development Corporation, said it can take more than a year to receive tax breaks. Speeding up the approval process will greatly improve the pace of new housing development, he said.

“Without some type of incentive for the smaller guys there’s just no way to get it done,” he said.

Activists with Detroiters for Tax Justice expressed concerns that the automatic approval will cut the public out of the process and reduce the council’s oversight. They argued that public involvement isn’t “red tape” to cut through.

Santiago-Romero previously said that council members will be notified within a week of projects being awarded a tax break.

“We’re not in the dark about who is going to be awarded and what those projects look like,” she said at a previous meeting. 

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One-time housing programs boosted 

Two housing programs funded with federal American Rescue Plan Act have a future, for now. 

The council approved two contracts adding $1.7 million to the Down Payment Assistance Program and two contracts adding $3.2 million to the Renew Detroit Home Repair Program.

One provides $25,000 grants to first-time home buyers.

The other covers the cost of window and roof repairs for 2,000 low-income seniors and disabled homeowners.

Housing and Revitalization Department Director Julie Schneider said the funding will keep both programs running for the time being. It’s unclear whether additional money can be found to make them permanent once federal pandemic funds run out. 

The City Council plans to review spending of ARPA funds in a special meeting on Nov. 7. 

City officials said $57 million in pandemic funding needs to be obligated for specific uses by December.

That includes $39 million for affordable housing contracts and $18 million in other contracts that have largely been approved already by the council.

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Wages hold back bus system progress    

Comparatively low bus driver wages remain a major obstacle to improve public transportation in Detroit.

Michael Staley, director of the Detroit Department of Transportation, gave a presentation this week on performance metrics for the city’s bus system.

He said “the biggest issue” facing DDOT is making wages competitive.

Persistent issues with late arrivals, made worse in evening hours and on weekends, is directly tied to the number of drivers and buses on the street.

Roughly a quarter of buses are late in the morning, and late buses become more common in the evening hours and weekends.

Staley said DDOT driver wages – ranging from $19 to $26 per hour – fall behind what drivers with the Suburban Mobility Authority for Regional Transportation are paid. SMART operators earn $26 to $32 per hour.

“We have to make sure our wage and benefit package is competitive going forward,” he said.

Wages were increased by $3 per hour at the start of the year, on top of increases for attendance bonuses. At the time, transit advocates worried it may not be enough.

Contract negotiations with the Amalgamated Transit Union are expected to start at the end of the year, Staley said.

Inconsistent scheduling and a lack of childcare were other reasons bus drivers quit, Staley said. Recent hires have been more likely to leave.

Staley said the department is behind on replacing old buses but has increased its inventory of parts needed to repair buses.

DDOT buses averaged roughly 249,000 riders per week from April through June, with more than 1 million riders each month.

Detroit added 150 operators this year and lost 97 operators total from April through the end of September. Staley said the department needs 515 transit operators. 

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Chickens, ducks and bees

The City Council is expected to vote in November on a long-awaited ordinance allowing residents to raise chickens, ducks and honeybees.

Council Member Pro Tem James Tate Jr. said the ordinance has been a decade in the making. It would legalize licenses for limited types of urban livestock and create regulations for animal shelters, waste management and pest control.

The initiative is part of a broader movement toward urban agriculture in Detroit. The city currently has around 2,300 urban gardens and farms.

An unknown number of residents are already keeping animals illegally. Tate said the goal is to decriminalize the practice and promote sustainable food systems.

“The dirty little secret is there are so many people within the city of Detroit who are doing it without any issue at all,” he said.

(Screenshot: City of Detroit)

If approved, livestock could be kept on residential lots, educational institutions, restaurants, urban farms and gardens. Animals could only be slaughtered at licensed facilities.

A license from the city’s Animal Care and Control Division would be required, with a proposed fee of $50. Licenses may be denied or revoked for prior violations.

There are limits on the number of animals that can be kept, depending on the type of land use. Homes can keep eight ducks while urban farms can keep 12 ducks, for example.

Ducks and chickens must be housed in secure coops with certain conditions, including a pool for ducks.

Honeybee hives can be placed on the rooftops of buildings, but not single-family homes, and can’t be within 10 feet of public spaces.

Feed must be stored securely, and a manure management plan is required to prevent contamination of nearby properties and waterways.

There’s no proposed limit on the number of licenses, but the city expects 1,400 households would obtain one within the first decade.

Tate said there’s been strong support from the city’s urban farming community. The city received 76 advocacy letters from urban farmers and residents.

However, some opposition exists, particularly in Southwest Detroit’s 48217 area, where residents cite concerns about air quality and enforcement capabilities.

Residents who called into a public hearing on Monday said they want more autonomy over their land. Brightmoor resident Tiffany Pilsen said she sells eggs to neighbors and has provided a positive benefit to the community.

“I can guarantee you my chickens are quieter than dogs,” she said.

Kimani Jeffrey, a staffer with the City Planning Commission, said roughly 20 cities created similar animal keeping ordinances.

“This is happening in some of the most dense cities such as New York,” Jeffrey said, and animals are already being kept in Detroit’s “high-end neighborhoods and places that are experiencing vacancy.”

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Tax abatements calculated 

The city approved $843 million in tax abatements for 171 projects from 2017 to 2023, according to a new report from the Citizens Research Council of Michigan.

That’s larger than what the city was given in federal pandemic relief ($827 million).

The City Council approved tax breaks with the expectation of creating $7.5 billion in new investment and 24,000 new jobs.

The CRC report is the last of three examining Detroit’s use of tax incentives for the council. 

The previous report found many Detroiters don’t benefit from controversial tax capture practices that move money from schools and city services into downtown projects.

Detroit uses a variety of temporary tax breaks established under state law to grow city income taxes and property taxes in the long-term.

Researchers found it’s tough to judge the effectiveness of tax abatements. Tax breaks helped rehabilitate vacant buildings but the “cost” of jobs created is high.

For example, commercial redevelopment projects received $145,000 in tax incentives for each new job created.

Tax abatements helped increase income tax revenue, which has grown 40% since 2010 when adjusted for inflation. Property tax revenue dropped by half compared to 2010.

The report advocates for cutting the city’s operating millage.

Detroit’s property tax burden caused mass foreclosures between 2010 and 2020. Revenue from an amusement tax, which requires state law changes, could offset a minor reduction of the property tax rate.

Most projects approved for tax breaks from 2017 to 2023 are located downtown, midtown and along the riverfront. 

City Council Districts 5 and 6 contain half of all vacant commercial property and nearly three-quarters of all vacant industrial property.

The report advocates for more public involvement in tax abatements, which are discussed behind closed doors for much of the process. It suggested adding more community representatives to boards under the Detroit Economic Growth Corporation.

Researchers called for better tracking of job and revenue increases expected by the city. This would improve the ability to create “claw back” provisions that revoke tax breaks if developers don’t meet projections.