City’s new PILOT ordinance unlocks massive wave of affordable housing development; 2,400 units approved, applications for 6,000 more in approval process

• Payment In Lieu Of Taxes (PILOT) ordinance passed by City Council in Oct. 2024 gives affordable housing developers a fast track to secure financing by reducing tax burden

• Approval process for tax breaks used to take up to 1 year; with PILOT it's less than 60 days on average with a goal of 30 days

• Total investment for 8,000+ planned PILOT affordable units exceeds $1.2 billion

• Owner of vacant apartment building in Dexter-Linwood will bring it back to life as 34-units of affordable housing thanks to a projected 95% reduction in property tax burden under PILOT

The City of Detroit is about to undergo an unprecedented wave of affordable housing development, thanks to the power of the Payment In Lieu of Taxes (PILOT) Fast Track ordinance passed nearly a year ago by City Council, Mayor Mike Duggan and members of Council announced today.

Since the PILOT was enacted, more than 2,400 units of new and preserved affordable housing, representing nearly $0.5 billion of investment, have been approved. Among the 47 projects approved for PILOT, 38 will offer units at restrictions averaging at or below 60% of Area Median Income (AMI), while 8 will have restrictions averaging 61-80% AMI, and 1 is a "workforce housing" project with restrictions averaging 81-120% AMI. An astounding 6,000 more units are currently going through the expedited approval process, which is typically less than 60 days, compared to up to a year or more under previous methods. Those 6,000 units represent another $1.1 billion in affordable housing development.

Mayor Duggan joined with councilmembers, developers and community members to make the announcement in front of a vacant building in the Dexter-Linwood neighborhood that will be brought back to life as 34 new units of affordable housing, thanks to a 95% savings in projected property taxes under PILOT. Dexter-Linwood has seen a significant rise in private investment since the completion of the City's new $8.5 million streetscape along Dexter Avenue.

"We knew that creating a fast approval process to give developers and automatic reduction in their property taxes in exchange for a commitment to affordable housing would speed up development in Detroit," Mayor Duggan said. "Nowhere in America will you see the pace of affordable housing development move faster than here in Detroit."

Below is a breakdown of PILOT projects that have been approved and are in the approval process:

How PILOT Works

The PILOT program allows developers of affordable housing to receive an automatic property tax reduction in exchange for keeping rents affordable for low- and moderate-income Detroiters for at least 15 years. Projects that offer deeper levels of affordability receive greater reductions in their property tax burden. Having that predictability helps developers secure other sources of equity and financing to more quickly get shovels in the ground.

When City Council approved the PILOT ordinance by a unanimous vote, it authorized the Department of Housing & Revitalization (HRD) to administratively review and approve applications, rather than require Council approval for each. This has helped to reduce the time needed for city approvals - which could take up to one year for other tax incentives - to less than 60 days for HRD to approve a PILOT application.

For projects seeking PILOT for rehabilitation of occupied buildings, developers must also agree to a Tenant Retention Plan that protects existing residents, ensuring they can stay and benefit from the improvements to the property.

Since the ordinance was passed, the City has used the PILOT tool to incentivize several types of developments:

• Ground up construction new affordable housing

• Renovation of vacant properties into new affordable housing units

• Rehabilitation of existing multi-unit housing that previously did not guarantee affordable rents

Dexter-Linwood project an example of "The Power of the PILOT"

The Mayor, members of City Council and affordable housing developers shared the news in front of 3045 Cortland in the Dexter Linwood neighborhood. The building, built in 1928 and vacant since 2018, will be brought back to life thanks to the PILOT program. The $6 million redevelopment will feature 34 residential units with a mix of one-bedroom and two-bedroom apartments, and one studio unit. These units will have an affordability of 80% AMI. Each unit will include central air conditioning and heating, new appliance, in-unit washer and dryer and more.

All units will be affordable under the PILOT, thanks to a 95% reduction in projected property taxes it made possible, which is larger for projects that redevelop buildings that have been vacant at least five years.

3045 Cortland City Taxes without PILOT: $188,995 (est)

3045 Cortland City Taxes with PILOT: $11,774 (est)

In order to make up that cost difference if the PILOT did not exist, it would average out to an additional $433 per month in rent for each apartment.

Sophie Zembra, Owner and Managing Director of Wize Detroit, moved to New York City from France 10 years ago. In 2024, she relocated to Detroit to focus on redevelopment. She's passionate about renovating historic buildings and fell in love with not only the history of Detroit, but the resilience of the communities. Zembra says her vision for the Cortland property wouldn't be possible without the PILOT program.

"This building has such a special place in the neighborhood's history, and I've always believed it could be a place where Detroiters build their futures again," said Sophie Zembra, Owner and Managing Director of Wize Detroit. "The PILOT program made that possible. Without it, bringing this property back to life and offering truly affordable homes simply wouldn't have been financially feasible. Thanks to this tool, we're not just renovating a building - we're helping strengthen a community."

Zembra is also using the PILOT program for the Rohns Apartments, another historic, vacant building that will be transformed and include 17 residential units, 15 of those will be two-bedroom apartments, and two one-bedroom apartments restricted at 120% AMI.

Recent PILOT approvals include:

• The Residences at St. Matthew (District 4), delivering 46 units, including 25 PSH units on a long-vacant site

• Midblock (District 5), a major 170-unit new construction project

• Occupied rehabilitation of previously market-rate properties planning to start PILOT next year, including Cass Willis (72 units), Manning Manor (80 units), Porter-Junction Apartments (10 units), 98 W Hancock (10) units, among others

• Major rehabilitations like GoodHomes Detroit, and West Euclid Gateway are ensuring long-term affordability in historic neighborhoods.

"The PILOT ordinance represents what happens when we center policy around people. In less than a year, it has already delivered more than 2,300 affordable housing units for Detroiters, proving that when we provide the right tools, we can create real change," said City Council President Mary Sheffield. "This ordinance is about ensuring that families, seniors, and working people have a safe and affordable place to call home in the neighborhoods they love. I am proud to stand with my colleagues and our community in advancing progress, people, and prosperity for all Detroiters."

"The Fast-Track PILOT ordinance is proof that smart, people-driven policy can create shared success for our residents, our neighborhoods, and our development community alike," said Councilmember Fred Durhal (D7). "By reducing barriers and accelerating approvals, we're bringing more affordable housing while keeping projects financially viable - a vision delivered through partnership, purpose, and a belief that opportunity should live on every block of our city."

"The PILOT program is essential to making affordable housing financially feasible in Detroit," said Julie Schneider, Director of the Housing & Revitalization Department. "By leveraging this tool strategically, we're helping developers deliver more affordable units, preserve historic buildings, and support deeply affordable housing in neighborhoods that need it most."

Resources Available to Developers Through PILOT

Through the program, developers have access to comprehensive support and resources to streamline participation, enhance compliance, and reduce administrative burden. Key resources include:

• Tenant Retention & Income Verification Tools: This includes landlord and tenant guides, retention plan templates, income verification forms, and sample tenant communications-critical for occupied rehabs and ensuring compliance with affordability commitments.

• Virtual Office Hours: HRD holds regular virtual office hours (first and third Thursdays, 1-3 pm) to address developer questions in real time.

• Staff Liaison Support: Each application is assigned to a reviewer who can guide developers through procedural requirements, clarifications, and compliance matters.

• Training Recordings & Modules: Archived training modules to help new or repeat participants get up to speed on program policies and expectations

You can find all these resources on the PILOT website.

About HRD

The mission of the Housing and Revitalization Department (HRD) is to finance, underwrite, and administer housing and community investments that enhance the quality of life for the citizens of Detroit. Through HRD and the City's partners in housing, including the Detroit Housing Commission, the City of Detroit is committed to ensuring that every Detroiter has access to safe, decent, and affordable housing. HRD directs the strategy, deployment, and management of the City's housing policy and U.S. Department of Housing and Urban Development entitlement funding. HRD makes strategic investments in the City's existing housing stock and new development to ensure long-term population and physical growth of Detroit. Residents looking for affordable housing can visit homeconnect.detroitmi.gov.