After all the foreclosures, evictions and Wayne County auctions, 52% of Detroiters are now renters. City-wide rents have risen about 25%, now averaging $800 a month while downtown rents for studio apartments start around $1400. With more than a third of Detroiters living at or below the official poverty line, finding a place to live has become increasingly difficult. The Urban Institute revealed that nearly 60% of Detroit renters are considered “rent burdened,” meaning they spend more than 30% of their income on housing.
According to a 2016 study by Detroit’s Housing and Revitalization Department, fewer than 25% of the rental units available are affordable to extremely low-come households. The study concludes that Detroit “lacks adequate units affordable to households with an income under 30 percent Area Median Income.”
What is the Area Median Income? Usually the area is defined as Metro Detroit, where the AMI is $48,000 for a single person, but for Detroiters it is only $28,000—a 71% difference!
What are the options for low-income individuals and families? There are three:
- Public Housing: These are units run by the Detroit Housing Commission. But there are only 3,340 of them and they have an occupancy rate of 95%. The waiting list, which is currently closed, contains 5,760 applications.
- Housing Vouchers: These Section 8 vouchers are a rental subsidy that can be applied to any unit where the landlord is willing to accept it. Nationally 2.2 million Section 8 vouchers have been issued. The problem is that 65% of the time landlords turn people with vouchers away so even with a voucher, a low-income individual or family may not be able to find a safe, affordable housing. The Detroit Free Press stated that as of April 2018 only 140 vouchers had been issued in the city. The waiting list for the program, with 6,000 names, has been closed since April 2014.
- Affordable Housing: These are units built through the Low-Income Housing Tax Credit (LIHTC), which provides developers with tax subsidies in exchange for having a certain number of “affordable” units. After 15 years the building’s owner can exit the program by applying to state officials. “Saving Decent Affordable Housing in Detroit,” a study by the University of Michigan reports that between 2016 and 2022 approximately 7,000 homes and apartments under LIHTC will pass the 15-year mark.
In reality low-income options aren’t very available. In fact they are contracting, particularly for downtown buildings. For example, in March 2013 management the 1214 Griswold building informed more than 100 low-income seniors, many with disabilities, that they had a year’s notice (as is necessary under the Section 8 program) to move as the building would be renovated. Today that building, The Albert, has luxury apartments.
Starting in 2019 United Community Housing Coalition, which has a low-income housing placement program for Detroiters, will lose 90% of its placement funding.
The City of Detroit has responded to this crisis of affordability by announcing a fundraising campaign to raise $250 million to rescue 10,000 set-to-expire units and create an additional 2,000.
Reviewing the limited options for affordable housing, you can see how these programs cater to real estate developers and landlords rather than to the low-income population that needs safe and affordable housing.