Taking on the Affordable Housing Crisis

CCF staff and dignitaries with the ceremonial “shovelful” at a groundbreaking ceremony for the Van Dyke affordable housing project.

By Rodd Monts

The rhetoric of the 2022 election season has made clear — even to the most casual observer —that Republicans and Democrats have some intractable differences of opinion when it comes to hot-button issues. However, one thing that both sides clearly agree on is that Michigan is suffering an affordable housing crisis that threatens to leave many families struggling to find a place to live. It is a void that certainly could be filled by some of the region’s Chaldean-owned development companies.

Earlier this year, Governor Gretchen Whitmer and Republican legislative leadership reached an agreement to use $100 million in federal American Rescue Plan funds on economic development initiatives as part of a budget agreement to fuel the Revitalization and Placemaking (RAP) program. Just last month, Whitmer announced the doling out of $83.8 million to fund RAP projects in 22 statewide affordable housing and community development projects. There is still a sizable amount of funds left for future RAP projects, presenting opportunities for eager developers. And there are also opportunities for investments to be made outside that particular program.

The good news is that leaders in the community are investing in affordable housing for residents, including many newcomers to the region.

The Chaldean Community Foundation (CCF) is an active part of that mix, according to Luke Bonner, senior economic development advisor for the city of Sterling Heights. CCF has a $30 million mixed-use development in the city that includes 135 affordable apartments and 9,000 square feet of retail space along the North Van Dyke corridor.

Another Chaldean developer, Steve Abouna, won approval of his site plan to create an affordable development called New Alqosh, named after a Christian settlement in Northern Iraq. Bonner said that the project currently awaits final approval on a tax credit deal from the state housing authority.

“Because Sterling Heights is a ‘Welcoming Community,’ there are a number of immigrants and refugees in the area who are in need of housing,” Bonner said in a statement to the Chaldean News. “In addition, the gap between income and housing costs has grown across metro Detroit, continuing to fuel the demand for affordable housing. Evidence of this need is supported by the influx of projects in the affordable housing project range consisting of pilot projects and micro units.”

According to Gov. Whitmer’s office, Michigan faces a shortage of 160,000 units of affordable housing. The shortage has led to higher prices for low-income residents in metro Detroit and elsewhere, and it presents a major barrier for many Michiganders. The administration reports that prior to the COVID-19 pandemic, 18 percent of homeowners and 48 percent of renters were paying more than a third of their income on housing, which is a recipe for disaster. That was only worsened by the economic strain that most suffered through the pandemic.

Michigan is not an outlier. Based on data from the National Low Income Housing Coalition, about 11 million households in the U.S. have extremely low income — that is, below 30 percent of a given region’s median income. NLIHC estimates that there are only about 4 million units of housing available that those 11 million could afford.

Adding to Michigan’s already dire situation is the state’s aged housing stock — 47 percent of all residential units were built before 1970. In short, Michigan has too many houses that too few can afford, and those who can afford them lack the disposable income needed to invest in the type of upkeep that will allow them to see their asset (the main asset for the vast majority) appreciate.

The administration said in a recent release that the “housing shortage and affordability issues disproportionately harm marginalized communities, making it harder for them to pay the bills and put food on the table, especially as prices go up on everyday expenses because of inflation. Investing in housing will grow Michigan’s economy by creating good-paying construction jobs and expanding options for our workforce and small businesses.”

Promising developments

Macomb County’s population grew by over 40,000 individuals from 2010 to 2020, according to the U.S. Census Department. Bonner said that Sterling Heights is seeing a boon in overall housing development, with the addition of subdivision units, condos and market rate apartments coming online.

“The shortage in Sterling Heights comes in the form of new affordable housing,” Bonner said.

He added that a key challenge is that the process to secure financing and tax credits can be narrow and take a significant amount of time. Which may explain why the region’s Chaldean developers are not as active in the affordable housing market as one might expect. The Chaldean News contacted multiple developers in the region and learned, while all were substantial players in more lucrative development projects, few were involved in affordable housing construction. Still, the door is open.

In Detroit, for instance, where Mayor Mike Duggan announced earlier this year the launch of a $203 million affordable housing plan, Chaldean developers are being encouraged to invest. Housing insecurity is a major challenge in the city, with rising property values and soaring rents. All of this is unfolding while 33 percent of Detroiters live in poverty, according to Census data.

Roberto Torres, director of immigrant affairs and economic inclusion in the Department of Housing and Revitalization said the city has supported the Arab American Chaldean Council in the development of its community center and housing initiatives. Additionally, Torres said that they have intentionally invited Chaldean developers into forums where they could learn about affordable housing development opportunities and city priorities, meet key officials, and encouraged them to invest and build in Detroit. Now the opportunity in the state’s largest city, and elsewhere in the region, simply needs to be realized.