KeyBank contributes millions to Detroit affordable housing fund
Detroit Mayor Mike Duggan on Wednesday announced a $10 million contribution to the Detroit Housing for the Future Fund from Cleveland-based KeyBank.
The Fund aims to foster affordable housing projects by covering some of developers’ costs with grants and low-interest loans. Developers then agree to put a rent cap on those units.
Duggan announced the fund in the fall of 2020, along with a $75 million goal. Since then, the city has raised $65 dollars from private donors, and spent more than $12 million on six new affordable housing projects.
Duggan has set a goal of preserving the 10,000 existing affordable housing units in Detroit, and adding another 2,000.
“So if folks are pushed out of a neighborhood, there’s another quality option for them staying right here in the city of Detroit, because we want to keep everybody here,” he said.
Duggan acknowledged that truly low-cost housing is increasingly hard to find in Detroit. The city, a bastion of home ownership for decades, is now a majority-renter population.
Tahirih Ziegler is a Vice President with the Local Initiatives Support Corporation in Detroit, which manages the fund. She said they’re ”targeting housing instability for residents who have households under $50,000. We think that housing these residents that need deeper affordability are our primary customers.”
Some housing advocates have been critical of Detroit’s definition of “affordable housing,” a federal determination which uses regional Area Median Income guidelines to determine affordability. But that regional figure can differ significantly from Detroiters’ median income, which is only around $34,000 a year.
Ziegler also noted that housing and construction costs have soared since the start of the COVID-19 pandemic, making it even more difficult to convince developers that truly affordable housing is a worthwhile investment.
“That $65 million today doesn't quite have the same value as it did in 2018 when we started this work,” Ziegler said. “So it's imperative that we raise additional funds to ensure we meet the housing goals and the housing demands of the city."