POLICY RESEARCH

Before discussing new strategies for preserving NOAH, it was necessary to understand the current strategies and policies that either directly or indirectly influence these properties. The following section will report on local, state, and federal programs currently available to support the preservation of Detroit NOAH properties, and the section will conclude with a discussion of policy case studies from other large cities.

Existing Preservation Efforts in Detroit

Targeted Strategies to Preserve NOAH

In 2018, the City of Detroit created the Preservation Action Plan (the Action Plan), which is a five-year plan laying out strategies to preserve 10,000 units of affordable housing by 2023. This document is the most comprehensive document on affordable housing preservation for the City. The Action Plan described two primary points of concern with regard to NOAH properties in Detroit: rising market rents and the obsolescence or deterioration of aging units. Recognizing that the goals of the Action Plan were set to be achieved in 2023, we interviewed representatives of the Housing and Revitalization Department (HRD) about their progress on the strategies they had set forth.

Detroit Housing for the Future Fund (DHFF)

By far the most targeted approach to NOAH preservation occurs through the Detroit Housing for the Future Fund (DHFF), a part of the Affordable Housing Leverage Fund which was created as a result of the 2018 Multifamily Affordable Housing Strategy. The DHFF, operated by LISC Detroit, provides four products to assist NOAH property owners and those who wish to purchase NOAH properties, as well as developers of new affordable housing. Table 12 provides a summary of the available programs, their requirements, and the benefits they provide.3

According to representatives of DHFF and LISC, there has been high demand for both loans and for their preferred equity product. Funding is limited, however – the original $58 million designated for early implementation has almost been completely exhausted. The Capital Needs Assessment Grant has not been utilized as frequently as LISC expected, but a new city initiative offers Capital Needs Assessments (CNA) to NOAH owners for free, and this project has been more widely utilized. The free CNA program will likely overtake the grant program based on information provided to us by the DHFF and LISC.

Loans offered by the DHFF are available not only to NOAH owners, but also to developers of affordable housing and purchasers of NOAH properties. This means that the loans are not specifically designated for preservation of NOAH. As a result, there has been wider utilization of the loans by more experienced developers rather than NOAH owners. The team at LISC has done some targeted outreach to less experienced NOAH landlords to offer opportunities to receive loans. However, high demand for such products has led to limited outreach to ensure NOAH owners utilize DHFF loans.