Mayor Announces New DDA Fund to Build More Affordable Housing in Downtown Detroit

If the board of the Downtown Detroit Development Authority (DDA) votes on Wednesday, January 11 to approve final guidelines for a new financing tool for qualifying projects within the DDA boundaries, hundreds of new deeply affordable housing units could be constructed in the city’s rapidly developing downtown over the next few years, Mayor Mike Duggan announced earlier this week.
The shift occurs at a time when there is still a strong demand for multi-family housing Downtown, as seen by the low vacancy rate of 5.9%, which is down from a 12.1% vacancy rate in 2020. Since the DDA was established in 1976 at Mayor Coleman Young’s urging, the loan program would be the first time it specifically targeted financial help for downtown affordable housing, if approved.
“We have a clear vision to create a city, including our downtown, where Detroiters of all income levels can afford to live side by side in the same buildings as people of much higher income,” said Mayor Duggan, who Chairs the DDA and appoints board members. “This new fund gives us the ability to make downtown living accessible to Detroiters of all income levels.”
Under City ordinance, residential housing developments that receive discounted city land or direct support from the City of $500,000 or more are required to set aside 20% of the units for residents earning no more than 80% of the area median income.  

Under the DDA program, loans would be available to developments where at least 20% of the residential units will be reserved for households making between 50% and 70% of the area median income.  That translates to a household income between $31,350 and $43,890 for an individual or $44,750 and $62,650 for a family of four.   The DDA’s new incentive would apply only to developments located in the DDA’s downtown development area that offered rents for residents earning incomes below that level. 

In order to be eligible for a loan, the development must:

  • Be a multi-unit residential development within the DDA footprint that will include at least 10 affordable housing units
  • Set aside at least 20% of its units for residents earning between 50% and 70% of AMI

The maximum loan amount would be $200,000 per affordable unit, determined on a sliding scale, with larger loans offered to developments that makes units available to residents of lower income levels as follows:

Rent Affordability Target                  Loan Amount

80% AMI                                              No loan available 

70% AMI                                              20% of Hard Construction Costs

60% AMI                                              30% of Hard Construction Costs

50% AMI                                              40% of Hard Construction Cost

“This new tool will allow us to create more affordable housing units at lower rents than we could achieve without it,” said Kenyetta Bridges, Executive Vice President of the Detroit Economic Growth Corporation, which staffs the DDA board. “We also are fortunate to have developers who are prepared to use this new loan program immediately to help them reduce rents on these units.”

First Projects

The DDA board also will vote to approve the first-ever loans under the program, in the aggregate amount of $23,765,000, using the new tool for three mixed-income residential projects to be developed by a joint venture between the Related Companies and Olympia Development of Michigan.  Those projects will deliver a combined 139 units of deeply affordable housing at 50% AMI. Providing units at 50% AMI means that an individual living in one of the units would pay about $850 in monthly rent at a time when market rate is closer to $2,400.

Project Total Units 50% AMI Affordable Units
2250 Woodward 287 58
2505 Cass 131 27
408 Temple 261 54


“Although these residents will be paying much lower rents, thanks to this program, they will enjoy the same amenities as those paying market rate, which is the beauty of mixed income housing,” said Bridges.  

Loans may be forgivable based on residency

Another aspect of the DDA’s new loan parameters is a pathway to having portions of the loan forgiven based upon occupancy in the affordable units by existing Detroit residents. 

“A unique element of this loan program is that developers would give preference to existing residents of Detroit. A portion of the loan may be forgiven where the developer demonstrates that the affordable units are being rented out to someone who has been a resident of Detroit for at least three years,” said Bridges.  “That’s a new approach in Detroit we are very proud of.”

Julie Schneider, Director of the city’s Department of Housing & Revitalization applauded the DDA’s announcement.

“The need for quality affordable housing in Detroit is only going to grow as the market rises and rents along with it,” Schneider said. “This new tool means that we can create more deeply affordable housing units than we could without it because we won’t have to use some of our more traditional tools, such as low-income housing tax credits and various HUD funds, for downtown projects. Instead, we can use those resources to create other affordable housing in neighborhoods across the city.”

The DDA is governed by its Board of Directors who are appointed by the Mayor subject to the consent of Detroit City Council.


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