$38M in tax incentives will turn former Detroit classrooms, 3 other projects into affordable housing

A former Catholic school that's been vacant for more than a decade in Detroit's Morningside neighborhood is slated to become housing in the next few years.

The development is one of four projects that received $38 million in federal low-income housing tax credits — the largest Detroit has gotten — over 10 years, city and state officials announced Thursday at the old St. Matthew School. 

The tax incentive will help create 183 units of housing, with rent prices ranging from $470 to $940 a month for a one-bedroom. They will be set aside for a Detroiter making $37,620 or less, or a two-person household earning no more than $42,960. 

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"We have a brewing affordable housing problem in this city," said Mayor Mike Duggan. "Property values have come up dramatically in recent years and if you're a homeowner, that's great news. You have built far more wealth. But if you are a renter, you found that the neighborhood you are living in has gotten much more expensive." 

The two-story St. Matthew School, next to St. Matthew Catholic Church, will see entire classrooms turned into apartments, said Paul Propson, CEO of Catholic Charities of Southeast Michigan, the nonprofit spearheading the renovation. 

There will be 46 units and half of the tenants will not pay more than 30% of their income on rent — regarded as the federal benchmark for housing affordability. That's possible through a combination of statewide housing vouchers and a newly created city "rental subsidy reserve," a $500,000 fund for developers to use in order to keep rents affordable. The city subsidy covers seven units for 15 years. The remaining apartments will be for a Detroiter making $37,620 or less. 

The project's price tag is about $17 million. Construction is expected to begin in 2023 and be completed in 2024, Propson said. 

The development will provide permanent supportive housing for those who are homeless, said Donald Rencher, group executive of Planning, Housing and Development. 

It will also have on-site health care and mental health care services for residents and the community, officials said. 

"There's a strong correlation between stable housing, health and the social determinants of health," said Dr. Douglas Apple, chief clinical officer of Ascension Michigan. 

Three other developments also received the federal low-income housing credit and will be new construction projects that are currently vacant lots.  

Most units at the former Wilbur Wright School campus on Rosa Parks Boulevard and Calumet will be set aside for a Detroiter making less than $37,620. Twenty units, out of 60, will be at market rate. Construction is slated to wrap up in 2024. The project will cost about $16 million. 

Work at the Greystone Senior Living project in Midtown Detroit — totaling about $12 million — is expected to wrap up by the end of 2023. The development will include 49 units for a one-person household making less than $37,620. 

The 48-unit Orchard Village Apartments in the Old Redford neighborhood is scheduled to be completed in 2024. The apartments will also be for a resident making $37,620 or less. The development cost is about $14 million. 

“I think it's important to make sure that we have socioeconomic diversity within our neighborhoods," said Council Member Latisha Johnson, who represents the city's 4th District. 

The federal Low Income Housing Tax Credit program, administered by the Michigan State Housing Development Authority, is meant to spur and preserve affordable rental housing for developers.

Nushrat Rahman covers issues related to economic mobility for the Detroit Free Press and Bridge Detroit as a corps member with Report for America, an initiative of The GroundTruth Project. Make a tax-deductible contribution to support her work at bit.ly/freepRFA.

Contact Nushrat: [email protected]; 313-348-7558. Follow her on Twitter: @NushratRSign up for Bridge Detroit's newsletterBecome a Free Press subscriber.