In a decisive move to address Detroit's affordable housing crisis, Mayor Mike Duggan, paired with City Council members, unveiled a groundbreaking ordinance poised to significantly streamline the development of affordable housing projects. The proposed Payment In Lieu of Taxes (PILOT) Fast Track Ordinance, is a plan to expedite project approvals by six to nine months, a stark contrast to the current timeline plagued with delays.
"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, highlighting the urgency for change. This information was reported by the City of Detroit's official website.
The issue at hand stems from the onerous bureaucratic processes currently stalling the creation of affordable housing. The need for multiple hearings and approvals at state and local levels, which can span 8 - 10 months, has long been a bottleneck for developers. This initiative sponsored by Councilmembers Fred Durhal, Mary Sheffield, Mary Waters, and Coleman Young, is set to combat this by allowing property tax reductions for developers who commit to 15-year affordable rent agreements. Notable examples provided by the City of Detroit show multi-year gaps between abatement application and construction start dates, emphasizing the need for this streamlining.
The proposed solution, the PILOT Fast Track ordinance, would replace arduous property taxes with more manageable payments, fostering a more viable environment for building affordable housing. The legislation allows 15-year tax breaks and a potential renewal of the same duration, mitigating financial uncertainty. "The need for affordable housing in our city is urgent and ongoing, so we must implement a lasting solution rather than depend on one-time or uncertain funds," Councilman Fred Durhal told the City of Detroit's news service.
Compliance with the new ordinance would entail a developer's commitment to 15 years of affordable renting, obtaining proper certifications of compliance, and passing annual audits to uphold the lower-rent agreement. The City of Detroit intends to conduct quarterly reviews on the PILOT program's effectiveness, with oversight by the City Council.
The draft ordinance is scheduled to be presented to the City Council on September 24, as confirmed by Mayor Duggan. The aspiration is for the PILOT to pass by the end of the year, enabling developers to apply in early 2025, and paving the way for effortlessly accessible affordable housing in Detroit.
