Following through on a key campaign promise and an issue that she has championed since joining city government, Detroit Mayor Mary Sheffield issued her third executive order, this time, steering more financial contributions toward affordable housing.
Sheffield signed the order on Tuesday, March 24, at the LaJoya Gardens housing development, directing that 100% of proceeds from the sales of city-owned commercial properties will go toward the Affordable Housing Development and Preservation Trust Fund, which provides gap financing, low-interest loans and grants to developers to help keep units affordable.
Detroit’s inclusionary housing ordinance, which Sheffield spearheaded as a City Council member in 2014, currently requires 40% of proceeds to be deposited into the trust. The new order goes into effect July 1, which is the start of the new fiscal year.
The order more than doubles annual proceeds to the trust to about $4 million, as opposed to slightly less than $2 million a year to aid affordable housing development. The trust fund also supports construction, rehabilitation and preservation of housing units.
“The need for affordable housing in Detroit is greater and so is the potential of the Trust Fund,” Sheffield said in a statement. “Directing 100% of commercial property sale proceeds to the Trust Fund is one of the many ways my administration is going to increase our capacity to build more affordable housing.”
Sheffield said 70% of funds must go toward units at 30% of the area median income (AMI) or below, which is “the greatest need of housing” in Detroit. The remainder of fund expenditures will support housing projects providing units to households making 50% or below of the AMI, according to the city. The median household income is about $39,209, according to U.S. Census Bureau figures.
“We also know that doing affordable housing is difficult. There are types of partners that you need, various different types of funding that is needed to make these projects work. And the Affordable Housing Preservation Trust Fund is just another tool to ensure the gaps are filled, to ensure that affordable housing is built in the city of Detroit,” Sheffield said.
LaJoya Gardens was among several housing projects to benefit from the trust fund, using a $1.1 million investment.
The new apartment building includes 42 units of new affordable housing at 4000 Vernor Highway, in southwest Detroit, with rents reserved for households earning at or below 30%-80% of the area median income.
Julie Schneider, director of the city’s Housing and Revitalization Department, said stable, affordable housing is the cornerstone of people’s lives and commended Sheffield for her commitment to boosting availability in Detroit.
Affordable housing “takes a lot of work. You don’t just call something affordable housing, you have to make sure the rents being offered are affordable to a range of households, of a range of incomes. And you do that by making investments, often public investments, that require long-term contracts to keep that affordability in place over decades,” Schneider said.
Nora Rodriguez, a LaJoya Gardens resident, said she was hunting for an apartment but couldn’t find a space fitting her needs, especially as a mother who had a baby last month. At the last minute, she found an opportunity to move into LaJoya Gardens and said she could not have asked for anything better.
“It has safety, it’s innovative, the architecture is really nice, it’s really good because it’s right by the parks for the babies,” Rodriguez said, adding that her baby “is thriving and he’s safe” with a safe space to live in. “From somebody that lost so much, I gained so much again from getting all the gifts from my community.”
Other projects that received help from the trust fund include:
- The Residences at St. Matthews, an adaptive reuse of a former Catholic school on Detroit’s east side providing 25 units of permanent supportive housing for individuals facing homelessness, and 21 units of affordable housing for households with incomes at or below 30%-80% AMI.
- The Hive, an under-construction affordable housing building on Gratiot Avenue near Eastern Market, which will offer 78 units for households with incomes at or below 30%-80% AMI.
Units receiving aid from the trust fund are to remain affordable for at least 30 years from the date construction is completed. Priority is given to proposals that are “likely to be affordable in perpetuity, either by deed restriction or the nature of the developer,” according to the city.
Dana Afana is the Detroit city hall reporter for the Free Press. Contact: dafana@freepress.com. Follow her: @DanaAfana.