Federal Low-income Housing Tax Credits Help Develop New Apartments in Detroit

Federal Low-income Housing Tax Credits Help Develop New Apartments in Detroit

By Dennis Archambault

The complexity of developing low-income housing cannot be underestimated. The social and financial engineering that is necessary to make a project work is extremely difficult. A recent project to convert an abandoned school into 138 units of affordable housing for extremely low-income people required vision, humanitarian values, fiscal savvy, and government support — the latter which has been in short supply. It also requires $38 million in federal low-income housing tax credits. This will ensure that qualified renters will pay rents ranging from $470 to $940.

Few low-income housing developments are as simple as a developer buying land, hiring an architect, assembling contractors, and scheduling a dedication with the mayor. They can take years and often many setbacks. An essential component is a federal housing administration that realizes the value and necessity of these properties.

The recently announced housing development at old Matthew’s school in Detroit (https://www.freep.com/story/news/local/michigan/detroit/2022/06/23/detroit-housing-developments-low-income-tax-credits/7709325001/) is not only a residential building, but it will have an integrated physical and mental health center.

At a time when Detroit City Council is debating tax incentives for the Hudson’s block development downtown, it’s appropriate that there is no debate over the appropriateness of $38 million in tax incentives. That’s the role of government – fill gaps that enable private developers to complete their deals.  People familiar with these developments know they wouldn’t occur without them. And without these developments, hundreds of people would be looking for homes.

Dennis Archambault is vice president of Public Affairs for Authority Health.