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Council approves housing law amid gentrification fears

Christine Ferretti
The Detroit News

Detroit — The City Council on Tuesday unanimously approved long-awaited affordable housing measure to push back against perceived gentrification in the city.

The “inclusionary housing” ordinance, proposed by Councilwoman Mary Sheffield, will require developers to set aside a certain percentage of affordable residential housing units for low- and moderate-income residents. The move, Sheffield said, helps ensure all Detroiters can take part in the city’s recovery.

“The gentrification that we see in New York, D.C., Chicago and Boston is not welcome in Detroit,” Sheffield said.

The ordinance will require developers for projects of $500,000 or above, who are receiving certain government subsidies and/or discounted land from the city to make 20 percent of their residential housing units affordable.

The proposal sought to have a minimum of 10 percent of the units earmarked for households at or below 80 percent of the average median income. Another 5 percent would be at 60 percent or less; and the remaining 5 percent would be for individuals at or below 50 percent of the average median income.

But the administration put forward an amendment, noting Sheffield’s proposal prescribed income tiering that was indifferent to the source of funding a particular project may receive. The changes, ultimately approved by council, further break down the tiers, taking into account the various funding sources — some of which may require even deeper subsidies, officials said.

“Making a law of this kind is a milestone for our city,” said Arthur Jemison, the city’s housing director, after the vote. “It’s going to be a huge statement about the priority of affordable housing and the work we do.”

Sheffield, during a news conference alongside fair housing advocates ahead of the council’s formal session, said Tuesday is the culmination of more than three years of work on the law, her first proposal since taking office.

“The city of Detroit is at a critical crossroad in its history, and as we embark on one of the most ambitious economic development periods since the 1920s, it is imperative that government do its fair part to ensure that true and equitable housing opportunity is available to all Detroiters of all economic levels,” Sheffield said in front of the Spirit of Detroit statue outside City Hall.

Before council approved the measure, dozens of supporters and a handful of concerned developers turned up at public comment to speak about the plan.

David Howell, director of real estate for Midtown Detroit Inc. was among those pushing for the amendment on Tuesday, saying he appreciated Sheffield’s effort but he and other developers believed the original terms of the affordable housing proposal will “not promote or expand it” in Detroit.

But those in favor, countered that the plan is only a first step and ultimately doesn’t go far enough.

“Affordable housing is a human rights issue,” said Aaron Handelsman of the Detroit People’s Platform. “It’s time to put an end to corporate developers putting their business above the human interests and basic human needs of our working Detroiters.”

The ordinance also establishes the Detroit Affordable Housing Development and Preservation Fund. The fund will be dedicated toward addressing the needs of those with incomes at levels at or below 30 percent of the average median income as well as shortfalls in home repair grant funding for seniors.

Sheffield on Tuesday said the fund is being seeded with $2 million in surplus funds.

Under the ordinance, affordable rental or lease units would remain affordable for 30 years.

The housing ordinance also establishes penalties for violating the rules. If developers fail to meet the terms, they will have 60 days, or more based on circumstances, to come into compliance or face monetary penalties.

The council on Tuesday also unanimously approved a Notification Ordinance designed to protect seniors and residents in low-income and subsidized housing from being displaced if affordability is set to expire.

As part of the package, Sheffield said she’s also urging the city’s administration to put in place an executive order requiring all projects receiving tax abatements to set aside 20 percent of the units as affordable.