City begins next $1B investment in affordable housing at groundbreaking for Preserve on Ash in North Corktown

• Mayor recently touted $1B in affordable housing investment since 2019; Preserve on Ash I puts Detroit on journey to next $1 billion
• Phase 1 of Preserve on Ash will bring 69-unit development with 48 affordable housing units; Phases 2-3 to add nearly 100 more units
• Development is first funded with $30 million HUD Choice Neighborhoods grant that will create and preserve nearly 600 units of affordable housing in Greater Corktown

Mayor Mike Duggan and The Community Builders, along with City, State and Federal officials, joined funders and Corktown residents today to break ground on Preserve on Ash I, bringing more affordable housing to one of the city's fastest growing neighborhoods.

The new development marks the first groundbreaking for what will be nearly 600 new and preserved units of affordable housing in Greater Corktown, made possible thanks to a $30 million Choice Neighborhoods grant the US Department of Housing & Urban Development awarded to the city of Detroit in 2021. The City had sought the highly-competitive grant anticipating the rising rents that would be coming to Corktown as a result of Ford's revitalization of Michigan Central Station and other major investments in the area.

"As Detroit comes back, we are building the city in a way that includes Detroiters of all income levels who stayed, rather than pushing them out," said Mayor Duggan. "In the past five years, we have invested $1 billion in affordable housing, and the Preserve on Ash marks the beginning of the next $1 billion we will invest into more affordable housing over the next five years. We are deeply appreciative to HUD, The Community Builders and all of our partners who are making this project possible."

Preserve on Ash I (POA I) will include 69 total mixed-income housing units across five buildings, and more than 5,800 square feet of retail space. 48 of the units in Phase I are rent and income restricted at or below 30% to 60% AMI. 22 units will also have project-based vouchers from MSHDA, so that rent payments will be based on household income.

POA I is part of a multiphase development strategy, led by The Community Builders, a leading nonprofit housing organization, to bring a total of 160 new construction, mixed-income rental units through to the North Corktown area north of I-75. Preserve on Ash phases II and III are expected to start construction next year.

"As a leader in neighborhood transformation for sixty years, we are thrilled to join Mayor Duggan, partners and neighbors to break ground on Preserve on Ash I," said Bart Mitchell, president and CEO of The Community Builders. "The Preserve on Ash development will increase quality affordable housing, expand resident opportunity, and spark economic investment in Detroit's oldest neighborhood as part of the Greater Corktown Choice Neighborhoods Initiative. The start of construction is an exciting milestone making Greater Corktown Detroit's a neighborhood of choice."

The groundbreaking comes less than two months after the historic Michigan Central's grand reopening. The campus sits less than a mile south from POA I. Ford Motor Company's revitalization of Michigan Central represents $1 billion in investment, with hundreds of employees now calling the historic train station home. As part of the city's 2018 Michigan Central Community Benefits Ordinance, Ford Motor Company invested $2.5 million into the Detroit Housing for the Future Fund (DHFF) to create and protect affordable housing in the Corktown neighborhood. DHFF invested $2.5 million in The Community Builders to move the project forward.

The project is supported with $2.77 million from the HUD Choice Neighborhoods Initiative. Detroit's Choice Neighborhoods Implementation grant will not only preserve and construct new affordable housing throughout Historic and North Corktown, but it will also provide critical neighborhood improvements, as well as TCB Community Life supportive services targeted to low-income residents in areas of health, education and economic self-sufficiency. TCB's Community Life housing stability and economic mobility package for residents includes rent reporting for credit building, escrow savings accounts and financial coaching.

"Working with trusted community stakeholders, Corktown residents, and strong development partners, the City of Detroit is making good on the promise of the Choice Neighborhoods program by revitalizing former public housing developments with high-quality homes in a growing and thriving neighborhood connected to services, resources, and opportunities," said Rich Monocchio, Principal Deputy Assistant Secretary for HUD's Office of Public and Indian Housing. "The Biden-Harris Administration celebrates the groundbreaking at the Preserve on Ash I as it will provide new high-quality affordable housing and it ensures that that no Detroit families are left behind."

The 9% Low Income Housing Tax Credit (LIHTC) and 9% gap financing from the Michigan State Housing Development Authority will support 69 units within five buildings, comprised of one-bedroom, two-bedroom and three-bedroom units. Seven units are reserved for mobility-impaired residents, and two units are for hearing or sight-impaired residents. Unit amenities include a dishwasher, refrigerator, oven & microwave, central air and in unit laundry.

"Michigan is leading the way in addressing the housing crisis by investing in new affordable homes, and at MSHDA we are doubling down on our investments in the city of Detroit," said Chad Benson, MSHDA's Director of Development. "We are committed to continuing our work with our state and city leaders on transformational projects and programs that lift up our communities and advance justice and equity for everyone in Michigan."

The Michigan Strategic Fund Board approved a $2.3 million Community Revitalization Program loan in December 2023 for the project, building upon multiple strategic investments in and around the City of Detroit as it becomes a national model for growth and development.

"The Preserve on Ash project is a great example of our Make it In Michigan economic development strategy's focus on People, Places and Projects," said Michele Wildman, MEDC's Chief Place Officer. "We are proud to provide support through the Community Revitalization Program. This project, which leverages publicly owned and underutilized land, will build upon the economic momentum in Corktown and provide new affordable and attainable residential and commercial opportunities in North Corktown."

Other funders include President Biden's American Rescue Plan Act (ARPA) and EGLE. In addition to permanent and construction financing from Bank of America.

"I am thrilled to see the $30m Choice Neighborhood Implementation grant continue to manifest itself through projects like the Preserve on Ash, a mixed-income housing development with ample retail space for a local business," said Detroit City Councilmember Gabriela Santiago-Romero. "This first phase will bring 48 desperately needed affordable housing units to Corktown, one of the City's oldest and fasting growing neighborhoods. As we continue to attract individuals and businesses to the City - and District 6 - it's imperative we ensure that anyone who wants to build a life here can do so."

DHFF, a private investment fund aimed at directing capital to creating new and preserving existing affordable housing in Detroit, is anchored by a $15 million commitment from JPMorgan Chase of the fund's total $58 million raise and a $10 million guarantee from The Kresge Foundation. DHFF is managed by LISC Fund Management, LLC, a subsidiary of Local Initiatives Support Corporation.

LISC Detroit sources and originates loans for DHFF. DHFF is a part of the larger Affordable Housing Leverage Fund, which is an initiative with the City of Detroit's Housing & Revitalization Department and the Michigan State Housing Development Authority (MSHDA). Including the Preserve on Ash, the DHFF has now invested $37 million in projects totaling 587 new or preserved affordable units in the city.

"The Detroit Housing for the Future Fund was designed for the sole purpose of expanding affordable housing options like Preserve on Ash for Detroiters" said Michael T. Pugh, LISC president and CEO. "The DHFF is a key tool helping us fight inequality and housing instability in the city. We are grateful for our corporate and philanthropic funders for helping us create a better Detroit for all."

A continued commitment to Corktown

As part of the Corktown HUD Choice strategy, the 87-unit HUD-assisted building known as Clement Kern Gardens will be razed and rebuilt. When it was built in 1985, the 9-acre site was isolated with berms and fencing, and streets were cut off. Under this plan, the street grid will be reconstructed to better connect the neighborhood. As Clement Kern is redeveloped by American Community Developers (ACD), current residents who want to stay in Corktown will be given priority to relocate to Left Field and future developments in the Corktown Choice plan - including Preserve on Ash I

Once Clement Kern is redeveloped, those residents who relocated to other affordable units can either stay in their new homes or choose to move to the rebuilt Clement Kern site. Most importantly, existing Clement Kern residents who qualify will continue to pay rent based on their income, and their housing needs and status will be prioritized throughout the Greater Corktown HUD Choice project. Work on redeveloping Clement Kern is to begin in 2025.

The plan also calls for a new economic empowerment center and outdoor learning lab to be built upon the former site of the Owen School.

"Our goal is to ensure that every resident, regardless of income, can call Corktown home and participate in its vibrant community," said Julie Schneider, Director of Housing & Revitalization at the City of Detroit. "The Corktown Choice transformation plan is our commitment to securing this future."

More than $1 billion has been invested in affordable housing in Detroit over the past five years as part of a massive effort to ensure that longtime Detroiters of all income levels can live in any neighborhood they choose. POA I will contribute to another $1 billion invested in affordable housing within the City of Detroit.

About The Community Builders

The Community Builders' mission is to build and sustain strong communities where all people can thrive. Our mission-driven businesses work with partners to develop, finance and operate residential communities, neighborhood amenities and opportunity programs for families, seniors and adults with disabilities. Since 1964, we have advanced housing equity through award-winning affordable and mixed-income communities and our pioneering Community Life model for resident success. Today, our ownership and management portfolio include over 14,000 apartment homes. Anchored by offices in Boston, Chicago, Columbus, New York and Washington D.C., we operate across 15 states.

Renderings of the Preserve on Ash development.

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