Mayor, Council members announce transformational PILOT Fast Track to speed next $1 billion in afford

Mayor Mike Duggan and Detroit City Council members proposed a Fast Track PILOT ordinance to speed up affordable housing projects by 6-9 months. The ordinance offers 15-year property tax reductions for developers who commit to affordable rents, making it easier to build new housing and revitalize vacant buildings. Sponsored by Councilmembers Durhal, Sheffield, Waters, and Young, the plan aims to add $1 billion in affordable housing to combat rising rents. The ordinance will be introduced to City Council on September 24th, with approval expected by the end of the year.“We have built or preserved $1 billion in affordable housing units in the last 5 years, but the way our population is growing and rents are rising, we have to build another $1 billion to keep long-time Detroiters from priced out of the city,” Mayor Duggan said. The Fast Track PILOT ordinance will allow us to do that.”
The Fast Track PILOT Ordinance is sponsored by 4 key councilmembers:
• Councilman Fred Durhal who has taken the lead in developing the Fast Track process
• Council President Mary Sheffield, who has led on the issue since her sponsorship of the trust fund
• Councilmember Mary Waters, who championed the creation of the Housing Services Division
• Councilmember Coleman Young, whose sponsorship of JumpStart cut evictions in Detroit
The Problem: Bureaucratic Obstacles Delay or Prevent New Affordable Housing
A housing developer cannot afford to rent property to low-income residents at below-market rates without a source of funds to subsidize those lower rents. Historically, state law raised two huge barriers to property tax or NEZ abatements that have made it very difficult for new housing:
1) The tax breaks were limited to 12 years. Construction typically needs to be financed over 30 years.
2) In most cases state law required 5 separate hearings and/or approvals at the State and local levels, typically taking 8 -10 months.
These recent examples show how long it can take to get from the abatement application to the start of construction:
• Violet T. Lewis Village - 3 years
• Preserve on Ash - 3 years
• 7850 E. Jefferson - 4 years
• Dreamtroit - 5 years
The Ribbon, one of the first residential new construction developments in East English Village in the past decade, will soon open its doors to residents earning no more than 80% of the area’s median income, albeit six months behind schedule. Developer Eddie Carrington faced some of the same delays many affordable housing developers experience under the current system, which would not occur under the city’s proposed new ordinance.
The Solution: PILOT Fast Track ordinance
Michigan Public Act 239 went into effect last year, allowing an easier and faster way to use PILOTS help subsidize new affordable housing in Michigan. A PILOT is a “Payment in Lieu of Taxes”. The new legislation allows a city to cancel all property taxes for affordable housing projects and substitute a smaller payment to local government. The legislation has two huge advantages over the old law:
1) It allows 15-year tax breaks, with a possibility of a 15-year renewal, making it much easier for builders to get 30 financing to build new housing.
2) It eliminates the requirements of multiple legal hurdles at the state and local level.
Councilmember Fred Durhal immediately went to work with the Mayor to develop an ordinance that would be the model for Michigan in cutting approvals from 8-10 months down to 1-2 months if developers agree upfront to 15 years of reduced rent for tenants. “This is our first real tax break for low to moderate income renters in this city and it was important to make it as easy as possible for our residents who need it the most,” Durhal said.
Home values in Detroit have risen significantly for 7 straight years, building record wealth for homeowners, but burdening renters. Council President Mary Sheffield, who sponsored the city’s original Inclusionary Housing Ordinance, joined in sponsoring Fast Track: “We know housing in Detroit is going to keep getting more expensive for those who can least afford it, and Fast Track will help us make sure there are affordable housing options for all Detroiters,” Sheffield said.

How PILOT would work
PILOT is available currently, but only on a limited basis on certain projects that incorporate federal funding. The PILOT ordinance would significantly expand access to the tool. If approved by City Council, it would allow city property tax rates on affordable housing developments to be tied to rent levels, as opposed to property value.
The PILOT tool would provide tax reductions on a sliding scale, based on the depth of rent affordability each project offers: The deeper the affordability, the deeper the tax cut. In exchange for the automatic tax reduction, developers would commit to offering units at rents affordable to households earning as little as 30% of AMI or less, and no more than 120% of AMI.
Estima

[@topneg1]

It amazes me they got the money for everybody but the people that been here forever

[@2eaglesfly]

Please vote that man out!

[@ahopefiend1867]

Great news! I work in downtown Detroit and business is booming there. This housing would help support the overall economy as well which means it can be self-sustaining.

[@cityofdetroit]

Agree! A thriving downtown Detroit is a positive sign for the city's overall economic health. We love to see the city making strides in attracting and supporting businesses and residents alike.

[@APRIL-gj9mr]

Millions still available and being “rationed” over the years from the American Rescue Plan but funding is never available for multigenerational homeowners of 40+ year native Detroiters. These pilot programs and American Rescue Plan funds should ALSO reward and assist multigenerational homeowners that have stayed in Detroit, instead of just incentivizing people to move into Detroit with $35,000 to purchase a new home and increasing units for renters.

[@toddhayes3506]

Great Job God Bless Detroit 🎶 🎉

[@davidcoleman8062]

Everyone got there palms greased.🤑🤑🤑🤑🤑🤑🤑

[@wandachandler8810]

No body want v to live east what the hell

[@bleuface100]

Detroit need to be doing more….. the entire city need a makeover, beginning with all the vacant land. 💯

[@paradigm5545]

real helpful chief

[@cityofdetroit]

Detroit has been making strides in revitalizing vacant land! Over 21,000 vacant side lots have been returned to neighboring residents for just $100 each. This empowers homeowners to create gardens, neighborhood parks, and play spaces, fostering a sense of community. The city is further investing in beautification with $28.5 million allocated for property cleanouts and alleyway activation, and another $16.5 million for block club and Neighborhood Beautification Grants, funded through ARPA (American Rescue Plan Act) resources. Read more here: detroitmi.gov/sites/detroitmi.localhost/files/2024-04/COD-DetroitsPlaybook_0.pdf

[@Runningwolf432]

Yeah we are the project like so many times before...

[@JoelLittle-mm8ed]

Look at those gatekeepers, the mayor should be giving them trophies

[@Leslie-t3e]

Durhal kisses the mayor's A

[@philipbell5448]

As long as the housing is not subsidized by the gov't. It might work. As soon as he mentioned Obamas name, I lost my optimism.

[@salemdesigns65]

They're building for the "illegals" not for those that needed housing in the last 20 years. Since the bankruptcy, a lot has been "established" yet not in the favor for those that had lived through it. Where's the money coming from for this anyway?

[@StephenowIII]

Hope the ppl keep the homes up thats y Detroit looks half dead.

[@wandachandler8810]

Make 8 mile better

[@JoySummer-qi9tu]

🕵️