Detroit — Mayor Mike Duggan announced with nonprofit and banking leaders Tuesday the launch of a nearly $50 million fund with the goal to create affordable housing in Detroit.
The Detroit Housing for the Future Fund is a public-private partnership that already has a committed $48 million in private capital to create affordable housing, with JPMorgan Chase contributing $15 million and the Kresge Foundation contributing $10 million, officials said. The goal is to eventually direct $75 million in private capital for that purpose.
It’s part of the city’s efforts to preserve 10,000 units of existing affordable housing and develop 2,000 units of new affordable housing.
“In too many cities in this country the residents who have stayed get forced out,” Duggan said during a press conference Tuesday. “Either they literally have their low-income housing taken away from them or the rents go up so high that people have to move out of the neighborhood they may have lived in for years.
“In the city of Detroit we do not believe in that principle. We don’t think anybody should have to be pushed out in order to bring new residents in. The city used to house 1.8 million people and now we have 700,000. If we do this right, we can bring jobs and businesses back while protecting those that stayed here during the down times.”
To date, of the 4,000 affordable housing units that have had low-income housing subsidies expire in the city, all have been renewed, Duggan said. He added that nearly 1,000 new units have been built.
“We’re nearly halfway to our goal which we set out,” he said.
The funding will help close the financing gap for developers to build new or preserve existing affordable housing units in the city, officials said. Local Initiatives Support Corporation will manage the fund.
“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,” said Maurice A. Jones, LISC president and CEO. “The [Detroit Housing for the Future Fund] 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.”
JPMorgan Chase’s commitment of $15 million includes $12.5 million in low-cost loans and a $2.5 million philanthropic investment. Flagstar Bank, Citizens Bank and First Independence Bank have committed a total $15.5 million in low-interest lending. The Kresge Foundation has committed a loan guarantee of $10 million.
Peter Scher, head of corporate responsibility for JPMorgan Chase said Tuesday that he’s proud to stand with Detroit leadership. He said the country is at an important moment right now.
“We see the impact that COVID, this pandemic is having on our most vulnerable communities,” he said. “We see the calls for racial justice in response to far too many senseless murders of Black citizens. We see the pleas to finally address the systemic racism that has held too many people back for far too long, and what’s clear is this is a moment that requires all of us to reflect and summon our own resolve to do even more, to do more to create a just and equitable society. Each of us as individuals and each of us as institutions to do even more. And business needs to be an important part of that equation. We need to help address these longstanding issues of racial equity and access to capital and opportunity that we see throughout our country.”
Developer Sonya Mays, president and CEO of Develop Detroit, said the Detroit Housing for the Future Fund allows her team to double their ability to preserve affordable housing.
“There are several communities that we have wanted to make long-term affordable and just did not have the right financing tools,” she said. “This new fund is filling a very important gap for us and for those that believe in affordable housing for all.”
The Detroit Housing for the Future Fund is the privately funded portion of the Affordable Housing Leverage Fund, an initiative the city announced in 2018 as part of its affordable multifamily housing strategy. The Affordable Housing Leverage Fund is a $250 million initiative involving federal and state funds as well as corporate and philanthropic investment.
To date the City of Detroit has made a $50 million commitment as part of the initiative and has committed $12.2 million toward the development of 424 affordable housing units. The Affordable Housing Leverage Fund also has a goal to direct $75 million in investment through the Michigan State Housing Development Authority.
Duggan on Tuesday also pushed for voters to approve in November Proposal N, would stabilize 8,000 vacant but structurally sound houses and demolish 8,000 structures that can’t be saved.
“We need to pass Proposal N because we’ve got 8,000 vacant houses in the city that need to be turned back into someone’s home and bring our neighbors back into our neighborhoods,” he said. “Hopefully on November third the voters will do that as well.”
Developers can learn about the fund at www.detroithousingforthefuturefund.org.