By Linda Little & Adam Hollier
Detroit is on the brink of a housing crisis. The signs are there: record inflation rates; skyrocketing housing prices that outpace home valuations—making it difficult to secure mortgages; exponential increases in rental rates coupled with the end to eviction moratoriums. According to the US Census Bureau (www.census.gov), Detroit’s median household income of $32,498 is a little over half of the state median income of $59,234 making housing unaffordable for not just the 39% of people living in poverty, but a growing working population unable to find adequate housing. Too many Michiganders are working full time jobs and can’t afford to buy or rent a home. An increasing number of individuals and families are slipping into homelessness…and the safety net is not able to help them.
At the same time, our great city is truly experiencing a renaissance. Some have dubbed Detroit the best city to invest in the United States due to its booming growth, thanks to the leadership of city and county government, the business community and support from state government. We see home values the highest they have been in our city’s history in some communities. Our school district is elevating in fiscal health and student achievement—a big draw for companies to recruit workers in the city. Construction crews are hard at work with brownfield and greenfield developments for hotels, corporate headquarters and “affordable housing” projects.
The term “affordable housing” is a misnomer, it does not mean accessibility or an option for the people truly in need. A Detroiter making the median income will bring home roughly $1,800 per month. The average rental rate in Detroit is around $1200/month, nearly 70% of take home pay. The math simply doesn’t add up especially when housing costs should not exceed 40% of income. This affordability mismatch makes housing solutions impossible for essential workers and low income families, a growing segment of the homeless population.
Why does this disparity exist? Redlining and systemic racism blocked new housing development for half a century. The boom of housing produced over the past decade has largely been focused in key targeted areas. In simple terms, for Legacy Detroiters the growth of the housing market has outpaced the needs of existing residents. Its time for solutions grounded in meeting the needs of people who need housing the most.
We know we need more units to provide permanent supportive housing (PSH) for individuals who are homeless and a stronger emphasis on workforce housing.
In order to determine how much PSH and workforce housing is needed, we must start to accurately count people who are homeless. The current definition requires you to have had no home for a full 365 days continuously. A night on a friend’s couch or a warm bed at the church would start your clock over and make you ineligible for PSH. There are already thousands on a waiting list for PSH and subsidized housing. Currently, there is no way to accurately track people outside of emergency shelters, such as those who sleep in their cars or on a friend’s couch.
Next, we must fix the average median income (AMI) standard that keeps so many people housing insecure because they are spending as much as 70%, of their income on rent. For Detroit, this formula includes AMI from suburban cities to determine the rental rate for affordable housing. Inclusion of surrounding suburbs with substantially greater income levels steeply skews the AMI denominator to determine rental rates in Detroit.
Lastly, we must provide essential workers options to become homeowners. In today’s housing market, essential workers are being left behind. There is an increasing population of working individuals and families turning to emergency shelter because they simply cannot find alternative housing or have worn out their welcome on a friend or family member’s sofa. Everyone can agree that no child can perform at their best after a rough night of sleep in the back seat of a car. People who work full time should be able to build wealth and stability for their families through home ownership.
This growing problem needs solutions fast. This is a call to action for the public and private sectors to come together to meet this moment to ensure that housing is truly affordable for everyone. Let’s continue the conversation on Mackinac Island.
Linda Little is the President and CEO of Neighborhood Service Organization and Hon. Adam Hollier is a Michigan State Senator for District 2.
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